S-118
EXECUTION COPY
___________________________________________________________________________
LONG TERM CREDIT AGREEMENT
Dated as of March 31, 1998
among
AGRIBRANDS INTERNATIONAL, INC.
THE SUBSIDIARY BORROWERS AND SUBSIDIARY OBLIGORS
FROM TIME TO TIME PARTY HERETO,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS,
and
ABN AMRO BANK N.V.,
as Agent
and
CREDIT LYONNAIS CHICAGO BRANCH,
as Syndication Agent
and
THE BANK OF NOVA SCOTIA,
as Documentation Agent
TABLE OF CONTENTS
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PAGE
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ARTICLE I: DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Currency Equivalents.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II: THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Revolving Loans to the Company and the Subsidiary Borrowers. . . . . . . . . . . . . . . . 19
2.2 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.3 Method of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4 Method of Selecting Types and Interest Periods for Advances; Determination of Applicable
Margins, Interest on Advances to Purina Korea, Inc. . . . . . . . . . . . . . . . . . . . . . . 21
(a) Method of Selecting Types and Interest Periods for Advances. . . . . . . . . . . . . . . . 21
(b) Determination of Applicable Margins, Applicable Letter of Credit Fee and
Applicable Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Method of Selecting Types and Interest Periods for Conversion and Continuation of
Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(A) Right to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(B) Automatic Conversion and Continuation. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(C) No Conversion Post-Default or Post-Unmatured Default . . . . . . . . . . . . . . . . . . . 25
(D) Conversion/Continuation Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.7 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.8 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.9 Evidence of Debt; Telephonic Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.10 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee Basis; Taxes;
Loan and Control Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(A) Promise to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(B) Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(C) Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(D) Interest and Fee Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(E) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(F) Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(G) Entries Binding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.11 Notification of Advances, Interest Rates, Prepayments and Aggregate Commitment
Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.12 Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.13 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.14 Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.15 Replacement of Certain Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.16 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.17 Letter of Credit Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.18 Reimbursement Obligation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.19 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.20 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.21 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.22 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.23 Currency Disruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.24 Termination Date Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III: CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.3 Availability of Types of Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.4 Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.5 Lender Statements; Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV: CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.1 Initial Advances and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.2 Each Advance and Letter of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V: REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 Organization; Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.3 No Conflict; Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(A) Tax Examinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(B) Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.7 Litigation; Loss Contingencies and Violations. . . . . . . . . . . . . . . . . . . . . . . 45
5.8 Subsidiaries; Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.11 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.12 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.14 Assets and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.15 Statutory Indebtedness Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.16 Post-Retirement Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.18 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.19 Restricted Junior Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.20 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.21 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.22 Foreign Employee Benefit Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI: COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.1 Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(A) Financial Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(B) Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(C) Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(D) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(E) ERISA Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(F) Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(G) Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(H) Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(I) Environmental Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(J) Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.2 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(A) Existence, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(B) Corporate Powers; Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(C) Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(D) Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . 54
(E) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(F) Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . 54
(G) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(H) Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(I) Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(J) Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(K) Foreign Employee Benefit Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.3 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(A) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(B) Sales of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(C) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(D) Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(E) Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(F) Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(G) Conduct of Business; Subsidiaries; Acquisitions. . . . . . . . . . . . . . . . . . . . . . 59
(H) Transactions with Shareholders and Affiliates. . . . . . . . . . . . . . . . . . . . . . . 60
(I) Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(J) Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(K) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(L) Issuance of Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(M) Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(N) Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(O) Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(P) Hedging Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(Q) Subsidiary Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.4 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(A) Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(B) Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(C) Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(D) Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(E) Country Debt Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VII: DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.1 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS
AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(a) Termination of Commitments; Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . 67
(b) Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(c) Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.2 Defaulting Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.4 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE IX: GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.1 Survival of Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.3 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.7 Expenses; Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(A) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(B) Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(C) Waiver of Certain Claims; Settlement of Claims . . . . . . . . . . . . . . . . . . . . . . 73
(D) Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.8 Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.9 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.10 Severability of Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.11 Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL . . . . . . . . . . . . . . . . . 74
(A) JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(B) OTHER JURISDICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(C) VENUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(D) WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.14 Subordination of Intercompany Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 75
9.15 No Strict Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE X: THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.1 Appointment; Nature of Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.2 Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.3 General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.4 No Responsibility for Loans, Creditworthiness, Collateral, Recitals, Etc. . . . . . . . . 77
10.5 Action on Instructions of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.6 Employment of Agents and Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.7 Reliance on Documents; Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.8 The Agent's Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . 77
10.9 Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.10 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.12 Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE XI: SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.1 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.2 Ratable Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.3 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.4 Relations Among Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . . . . . . . . . 81
12.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(A) Permitted Participants; Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(B) Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(C) Benefit of Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(A) Permitted Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(B) Effect; Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(C) The Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.5 Dissemination of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XIII: NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
13.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
13.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE XIV: COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
EXHIBITS AND SCHEDULES
EXHIBITS
--------
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B -- [Reserved]
EXHIBIT C -- Form of Compliance Certificate
(Definitions, 4.2, 6.1(A)(iii))
EXHIBIT D -- Form of Assignment Agreement
(2.15, 12.3)
EXHIBIT E -- List of Closing Documents
(4.1)
EXHIBIT F -- Form of Officer's Certificate
(4.2, 6.1(A)(iii))
EXHIBIT G -- Financial Statements
(5.4(A), 5.18)
EXHIBIT H -- Form of Request for Letter of Credit
(2.16)
EXHIBIT I -- Form of Letter of Credit
(2.16)
SCHEDULES
---------
The information presented on each of the following Schedules is dated as of
February 28, 1998.
Schedule 1.1.1 -- Permitted Existing Contingent Obligations
(Definitions)
Schedule 1.1.2 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.3 -- Permitted Existing Investments (Definitions)
Schedule 1.1.4 -- Permitted Existing Liens (Definitions)
Schedule 2.16(b) -- Existing Letters of Credit ( 2.16(b))
Schedule 5.3 -- Conflicts; Governmental Consents ( 5.3)
Schedule 5.7 -- Litigation; Loss Contingencies ( 5.7)
Schedule 5.8 -- Subsidiaries ( 5.8)
Schedule 5.17 -- Insurance ( 5.17, 6.1(D), 6.2(E))
Schedule 5.20 -- Labor Matters; Compensation Agreements ( 5.20)
Schedule 5.21 -- Environmental Matters ( 5.21)
Schedule 6.3(F) -- Restricted Junior Payments
Schedule 6.3(H) -- Transactions with Shareholders and Affiliates
LONG TERM CREDIT AGREEMENT
This Long Term Credit Agreement dated as of March 31, 1998 is entered
into among AGRIBRANDS INTERNATIONAL, INC., a Missouri corporation, any
SUBSIDIARY BORROWERS and any SUBSIDIARY OBLIGORS (as such terms are defined
herein) which are now or may hereafter become a party hereto from time to
time, the financial institutions from time to time a party hereto as LENDERS,
whether by execution of this Agreement or an assignment and acceptance
pursuant to Section 12.3, ABN AMRO BANK N.V., in its capacity as Agent for
-------------
itself and the other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
--------------------------
1.1 In addition to the terms defined in other sections of this
Agreement, the following terms used in this Agreement shall have the following
meanings, applicable both to the singular and the plural forms of the terms
defined:
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
-----------
transactions, consummated on or after the date of this Agreement, by which the
-----
Company or any Subsidiary of the Company (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise, including,
without limitation, by surrender of or foreclosure on collateral provided by
customers or (ii) directly or indirectly acquires (in one transaction or as of
the most recent transaction in a series of transactions, including, without
limitation, by surrender of or foreclosure on collateral provided by
customers) at least a majority (in number of vote) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the membership,
ownership or other equity interests in a limited liability company or of the
outstanding partnership interests of a partnership.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
-------
of the several Loans made by the Lenders to a Borrower of the same Type and,
in the case of Eurodollar Advances and Korean Eurodollar Advances, for the
same Interest Period.
"AFFECTED LENDER" is defined in Section 2.15 hereof.
---------------- -------------
"AFFILIATE" of any Person means any other Person directly or indirectly
---------
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act) of greater than ten percent (10%) or more of any class of voting Capital
Stock (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person through ownership of Equity
Interests. In addition, each director of a Borrower or any Subsidiary of a
Borrower shall be deemed to be an Affiliate of each Borrower.
"AGENT" means ABN AMRO Bank N.V. in its capacity as contractual
-----
representative for itself and the Lenders pursuant to Article X hereof and any
--- ---------
successor Agent appointed pursuant to Article X hereof.
----------
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
---------------------
Lenders under this Agreement as adjusted from time to time pursuant to the
terms hereof. The initial Aggregate Commitment is Fifty-Five Million and
00/100 Dollars ($55,000,000.00).
"AGREEMENT" means this Long Term Credit Agreement, as it may be amended,
---------
restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
---------------------------------
principles as in effect as of the date of this Agreement in the United States.
If any changes in generally accepted accounting principles are hereafter
required or permitted and are adopted by the Company with the agreement of its
independent certified public accountants and such changes result in a change
in the method of calculation of any of the financial covenants, restrictions
or standards herein or in the related definitions or terms used therein
("Covenant Accounting Changes"), the parties hereto agree to enter into
-------------------------
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Company's consolidated financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, that no Covenant Accounting Change shall be given
-------- -------
effect in such calculations until such provisions are amended in a manner
reasonably satisfactory to the Required Lenders. If such amendment is entered
into, all references in this Agreement to Agreement Accounting Principles
shall mean generally accepted accounting principles as of the date of such
amendment except as agreed in connection with the Covenant Accounting Changes
set forth in such an amendment and together with any changes in generally
accepted accounting principles after the date of such amendment which are not
Covenant Accounting Changes.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
--------------------
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of
one percent (0.5%) per annum.
"APPLICABLE FACILITY FEE" as at any date of determination, shall be the
-------------------------
rate per annum then applicable in the determination of the amount payable
under Section 2.10(C) with respect to the Aggregate Commitment determined in
----------------
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE EURODOLLAR MARGIN" as at any date of determination, shall be
-----------------------------
the rate per annum then applicable to Eurodollars Rate Loans determined in
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE BASE RATE MARGIN" as at any date of determination, shall be
-----------------------------
the rate per annum then applicable to Base Rate Loans determined in accordance
with the provisions of Section 2.4(b).
---------------
"APPLICABLE LETTER OF CREDIT FEE" as at any date of determination, shall
--------------------------------
be the rate per annum then applicable in the determination of the amount
payable under Section 2.20 with respect to Letters of Credit, determined in
-------------
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE MARGIN(S)" is defined in Section 2.4(b).
--------------------- ---------------
"ARRANGER" means ABN AMRO Bank N.V. in its capacity as the arranger for
--------
the loan transaction evidenced by this Agreement.
"AUTHORIZED OFFICER" means any of the chief executive officer, chief
-------------------
operating officer, chief financial officer, controller and treasurer of a
Borrower, acting singly.
"BASE RATE" means, for any day for any Loan, a rate per annum equal to
----------
(i) the Alternate Base Rate for such day plus (ii) the Applicable Base Rate
Margin applicable to such Loan, changing when and as the Alternate Base Rate
changes.
"BASE RATE ADVANCE" means an Advance which bears interest at the Base
-------------------
Rate.
"BASE RATE LOAN" means a Loan, or portion thereof, which bears interest
----------------
at the Base Rate.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
-------------
of ERISA (other than a Multiemployer Plan) in respect of which the Company or
any other member of the Controlled Group is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of
ERISA.
"BORROWER" shall mean the Company, Agribrands Canada, Inc., a company
--------
organized under the federal laws of Canada, Purina Italia, S.p.A., a company
organized under the laws of Italy, Purina Espana, S.A., a company organized
under the laws of Spain, Purina Hungaria Animal Feed Production & Trading
Company, Ltd., a company organized under the laws of Hungary, and Purina
Korea, Inc., a corporation organized under the laws of the Republic of Korea,
and each of their respective successors and assigns.
"BORROWING DATE" means a date on which an Advance, is made hereunder.
---------------
"BORROWING NOTICE" is defined in Section 2.4(a) hereof.
----------------- ---------------
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
-------------
selection of Revolving Loans bearing interest at the Eurodollar Rate, a day
(other than a Saturday or Sunday) on which banks are open for business in New
York, New York and Chicago, Illinois and on which dealings in United States
Dollars and Korean Won are carried on in the relevant interbank market and
(ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York and Chicago, Illinois.
"CALCULATION DATE" means (i) with respect to any Revolving Loan or Letter
----------------
of Credit in Korean Won, the Business Day of the making of such Revolving Loan
or the issuance of the Letter of Credit with respect to Korean Won; (ii) with
respect to outstanding Revolving Loans and Letters of Credit, (x) the Business
Day on which any subsequent Loan is made or Letter of Credit is issued, (y)
the twenty-fifth day of each calendar month (or, if such date is not a
Business Day, the next succeeding Business Day), and (z) any other Business
Day selected at the option of the Agent or at the direction of the Required
Lenders; provided, with respect to any option exercised pursuant to clause
-------- ------
(ii)(z) above, without the consent of the Agent required to calculate the
----
applicable Exchange Rate, the Calculation Date selected shall not be earlier
-
than the second (2nd) Business Day following exercise of such option.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
---------------------
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases) by the Company and its Subsidiaries during that period
that, in conformity with Agreement Accounting Principles, are required to be
included in or reflected by the property, plant, equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Company and
its Subsidiaries other than with respect to the acquisition of inventory in
the ordinary course of business.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
--------------
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (howsoever designated)
of corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person, in each such case
regardless of class or designation.
"CAPITALIZED LEASE" of a Person means any lease of property by such
------------------
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
-------------------------------
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH COLLATERAL ACCOUNT" means that certain deposit account maintained
-------------------------
at all times by the Company at ABN AMRO Bank N.V. with a balance not less than
$25,000,000 at any time.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
-----------------
unconditionally guaranteed by the government of the United States or the
government of any member of the European Union; (ii) domestic and Eurodollar
certificates of deposit and time deposits, bankers' acceptances issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, or its branches or agencies or the laws of
any member of the European Union and having a rating of B or better by
Xxxxxxxx BankWatch, or rated A or better by S&P and A2 or better by Xxxxx'x;
(iii) shares of money market, mutual or similar funds having net assets in
excess of $500,000,000 maturing or being due or payable in full not more than
one hundred eighty (180) days after any Borrower's acquisition thereof and the
investments of which are limited to investment grade securities (i.e.,
securities rated at least Baa by Xxxxx'x or at least BBB by S&P) and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial,
industrial or utility companies which, at the time of acquisition, are rated
A-1 (or better) by S&P or P-1 (or better) by Xxxxx'x, or are backed by letters
of credit from banks rated B or better by Xxxxxxxx BankWatch or rated A or
better by S&P and A2 or better by Xxxxx'x; provided that the maturities of
--------
such Cash Equivalents shall not exceed 365 days.
"CASH INTEREST EXPENSE" will mean, for any period, the total Interest
-----------------------
Expense of the applicable entity actually paid in cash (including the interest
component of Capitalized Leases but excluding the arrangement fee set forth in
the letter agreement between the Agent, the Arranger and the Company dated
February 25, 1998) all as determined in conformity with Agreement Accounting
Principles.
"CHANGE" is defined in Section 3.2 hereof.
------ ------------
"CHANGE OF CONTROL" means any of the following:
-------------------
(i) any "person" or "group" (as such terms are used in Sections 13(d)
--------------
and 14(d) of the Exchange Act)is or becomes the "beneficial owner" (as defined
-----
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 20% or more of the
combined voting power of the Company's Capital Stock ordinarily having the
right to vote at an election of directors;
(ii) during any period of 12 consecutive calendar months,
individuals:
(a) who were directors of the Company on the first day of such period, or
(b) whose election or nomination for election to the board of directors of
the Company was recommended or approved by at least a majority of the
directors then still in office who were directors of the Company on the first
day of such period, or whose election or nomination for election was so
approved,
shall cease to constitute a majority of the board of directors of the Company;
(iii) the Company consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of its
property to any Person, or any corporation consolidates with or merges into
the Company, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Company is reclassified or changed into or
exchanged for cash, securities or other property; and
(iv) except as provided by Section 6.3(B)(iv) with respect to the
------------------
sale, dissolution or liquidation of certain Subsidiaries of the Company, the
Company shall cease to own of record and beneficially, with sole voting and
dispositive power, at least 80% of the outstanding shares of Capital Stock of
each Subsidiary Borrower and each Subsidiary Obligor ordinarily having the
right to vote at an election of directors or shall cease to have the power,
directly or indirectly, to elect a majority of the board of directors of each
Subsidiary Borrower.
"CLOSING DATE" means the date on which the Agent notifies the Company in
-------------
writing that all of the conditions precedent under Sections 4.1 and 4.2 have
------------ ---
been satisfied and any of the Borrowers may request Loans, and any of the
Borrowers or the Subsidiary Obligors may request Letters of Credit, under this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"COLLATERAL DOCUMENT" shall mean the Pledge Agreements, the Guaranties
--------------------
and all other security agreements, mortgages, loan agreements, notes,
guarantees, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by or on behalf of the Company
or any of its Subsidiaries and delivered to the Agent or any of the Lenders,
together with all agreements and documents referred to therein or contemplated
thereby.
"COLLATERAL" means all property and interest in property now owned or
----------
hereafter acquired by the Company which has been pledged to the Agent for the
benefit of the Holders of Secured Obligations under the Pledge Agreements.
"COMMISSION" means the Securities and Exchange Commission and any Person
----------
succeeding to the functions thereof.
----
"COMMITMENT" means, for each Lender, the obligation of such Lender to
----------
make Revolving Loans, and to purchase participations in Letters of Credit not
exceeding the Dollar Amount set forth on Exhibit A to this Agreement opposite
---------
its name thereon under the heading "Commitment" or in the assignment and
acceptance by which it became a Lender, as such amount may be modified from
time to time pursuant to the terms of this Agreement or to give effect to any
applicable assignment and acceptance.
"COMPANY" means Agribrands International, Inc., a Missouri corporation,
-------
together with its successors and assigns.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
----------------------
Exhibit C delivered to the Agent and each Lender by the Company pursuant to
----------
the provisions of this Agreement and covering, among other things, its
--
calculation of the Applicable Margins, Applicable Facility Fee, Applicable
--
Letter of Credit Fee, its compliance with the financial covenants contained in
--
Section 6.4 and certain other provisions of this Agreement.
------------
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
-------------------------------------
Information Memorandum dated February 1998 and delivered by the Agent and the
Company to prospective Lenders in connection with this Agreement.
"CONSOLIDATED EBITDA" means, for any period, EBITDA of the Company and
--------------------
its Subsidiaries on a consolidated basis.
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
------------------------
would be included under shareholders' or members' equity for the Company and
its consolidated Subsidiaries deter-mined in accordance with Agreement
Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
-----------
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
----------------------
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability
of another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or
discounted or sold with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable, including Contractual
Obligations (contingent or otherwise) arising through any agreement to
purchase, repurchase, or otherwise acquire such Indebtedness, obligation or
liability or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.
"CONTINGENT PURCHASE PRICE OBLIGATION", as applied to any Person, means
--------------------------------------
any Contractual Obligation of such Person incurred in connection with an
Acquisition pursuant to which such Person is obligated to pay additional
consideration to the applicable seller in the form of an earnout, milestone
payment, contingent purchase price payment, or other similar performance based
compensation relating to post-Acquisition financial or operating performance
of the business acquired.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
-----------------------
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
-----------------
(other than Xxxxxxx Purina Company and any company that is a subsidiary of
such company as of the Closing Date) which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as
the Company; (ii) a partnership or other trade or business (whether or not
incorporated (other than Xxxxxxx Purina Company and any company that is a
subsidiary of such company as of the Closing Date)) which is under common
control (within the meaning of Section 414(c) of the Code) with the Company;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Company, any corporation described in
clause (i) above or any partnership or trade or business described in clause
------ ------
(ii) above (in each case, other than Xxxxxxx Purina Company and any company
---
that is a subsidiary of such company as of the Closing Date).
-
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.6(D) hereof.
------------------------------- --------------
"CUSTOMARY PERMITTED LIENS" means:
---------------------------
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens imposed
by law created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all such Liens do not
--------
in the aggregate materially detract from the value of assets or property of
any Borrower taken as a whole or materially impair the use thereof in the
operation of the businesses taken as a whole, and (B) all Liens securing bonds
to stay judgments or in connection with appeals that do not secure at any time
an aggregate amount exceeding $5,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements, building
restrictions and other similar charges or encumbrances on the use of real
property which do not interfere with the ordinary conduct of the business of
any Borrower or any Subsidiary of any Borrower;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against any Borrower or any
Subsidiary of any Borrower which do not constitute a Default under Section
-------
7.1(h);
---
(vi) Liens arising from leases, subleases or licenses granted to
others which do not interfere in any material respect with the business of any
Borrower or any Subsidiary of any Borrower; and
(vii) any interest or title of the lessor in the property subject to
any operating lease entered into by any Borrower or any Subsidiary of any
Borrower in the ordinary course of business.
"DEFAULT" means an event described in Article VII hereof.
------- ------------
"DOL" means the United States Department of Labor and any Person
---
succeeding to the functions thereof.
--
"DOLLAR" or "$" means the lawful money of the United States of America.
------ -
"DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of
--------------
such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the then applicable Exchange Rate.
"EBITDA" will mean, for any period, on a consolidated basis for the
------
applicable Person, the sum of the amounts for such period, without
duplication, of (i) net sales minus (ii) cost of products sold minus (iii)
----- -----
selling, general and administrative expenses, plus (iv) depreciation expense
----
to the extent deducted in computing the amounts in clauses (ii) and (iii)
------------ -----
above, plus (v) amortization expense, including, without limitation,
----
amortization of goodwill and other intangible assets to the extent deducted in
--
computing the amounts in clauses (ii) and (iii) above, all as determined in
------------ -----
accordance with Agreement Accounting Principles. EBITDA for each Subsidiary
shall be calculated excluding the effect of any service fees paid by such
Subsidiary to the Company.
"EBITDA CONTRIBUTION RATIO" shall mean the ratio of (i) Total Debt of the
-------------------------
Company and its Subsidiaries to (ii) the sum of 100% of EBITDA contributed by
Subsidiaries in countries with a rating of equal to or better than BBB- from
S&P and Baa3 from Xxxxx'x and 50% of EBITDA contributed by Subsidiaries in
countries with a rating of lower than BBB- from S&P or lower than Baa3 from
Xxxxx'x.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
---------------------------------------------------------
Requirements of Law derived from or relating to foreign, federal, state and
---
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601 et seq., the Occupational Safety and Health
-- ---
Act of 1970, 29 U.S.C. 651 et seq., and the Resource Conservation and
-- ---
Recovery Act of 1976, 42 U.S.C. 6901 et seq., in each case including any
-- ---
amendments thereto, any successor statutes, and any regulations or guidance
promulgated thereunder, and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
-------------------
for (a) any liability under Environmental, Health or Safety Requirements of
Law, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant
into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
-----------------------------------
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site
Recovery Act" or "Responsible Property Transfer Act."
"EQUIPMENT" means all of the present and future (i) equipment, including,
---------
without limitation, machinery, manufacturing, distribution, selling, data
processing and office equipment, assembly systems, tools, molds, dies,
fixtures, appliances, furniture, furnishings, vehicles, vessels, aircraft,
aircraft engines, and trade fixtures, (ii) other tangible personal property
(other than the Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof owned by the Company or any of the other Borrowers.
"EQUITY INTERESTS" means Capital Stock and all warrants, options,
-----------------
purchase rights, conversion or exchange rights, other rights to acquire
-
Capital Stock and all voting rights, calls or claims of any character with
respect thereto (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars
-----------------
at any date means the equivalent in such currency of such amount of Dollars,
calculated on the basis of the then applicable Exchange Rate rounded up to the
nearest incremental amount of such currency as determined by the Agent from
time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time including (unless the context otherwise requires)
any rules or regulations promulgated thereunder.
"EURODOLLAR ADVANCE" means an Advance (other than a Korean Eurodollar
-------------------
Advance) which bears interest at the Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Loan or Korean
--------------------
Eurodollar Loan for the relevant Interest Period, the rate at which deposits
in Dollars are offered by ABN AMRO Bank N.V. to first-class banks in the
London interbank market at approximately (x) in the case of a Eurodollar Loan,
11:00 a.m. (London time) two Business Days and (y) in the case of a Korean
Eurodollar Loan, 11:00 a.m. (London time) three Business Days, prior to the
first day of such Interest Period, in the approximate amount of the portions
of the relevant Eurodollar Loan of ABN AMRO Bank N.V., and having a maturity
approximately equal to such Interest Period.
"EURODOLLAR LOAN" means a Loan (other than a Korean Eurodollar Loan), or
----------------
portion thereof, which bears interest at the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance or Korean
----------------
Eurodollar Advance for the relevant Interest Period, the sum of (a) (i) the
-----
Eurodollar Base Rate divided by (ii) one minus the Reserve Requirement
- -----
(expressed as a decimal) applicable to such Interest Period plus (b) the
- ----
percentage determined in accordance with Section 2.4(b) to be the Applicable
- --------------
Eurodollar Margin in connection with Eurodollar Loans.
"EXCHANGE RATE" means with respect to Korean Won on a particular date,
--------------
the rate at which Korean Won may be exchanged into Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of
the Agent in the London interbank market (or other market where the Agent's
foreign currency exchange operations in respect of Korean Won are then being
conducted) for Korean Won at or about 1:00 p.m. (local time), on such date for
the purchase of Dollars with Korean Won for delivery five (5) Business Days
later; provided, however, that if at the time of any such determination, for
-------- -------
any reason, no such spot rate is being quoted, the Agent may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.
"EXISTING LETTERS OF CREDIT" is defined in Section 2.16(b).
----------------------------- ----------------
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
------------------------------
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (New York time) on such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
"FEES" are described in Section 2.10(C) hereof.
---- ----------------
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as
--------------------------------
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Company, any of its Subsidiaries or any
members of its Controlled Group and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
----------------------
Section 3(3) of ERISA which (i) is maintained or contributed to for the
benefit of employees of the Company, any of its Subsidiaries or any of its
ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of
ERISA, and (iii) under applicable local law, is required to be funded through
a trust or other funding vehicle.
"GOVERNMENTAL ACTS" is defined in Section 2.21(a) hereof.
------------------ ----------------
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
-----------------------
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY" means each of (i) those certain Guaranties executed in favor
--------
of the Agent for the benefit of the Holders of Secured Obligations pursuant to
which each of the Subsidiary Borrowers and Subsidiary Obligors shall guaranty
all of the Obligations of the other Subsidiary Borrowers and Subsidiary
Obligors and (ii) that certain Guaranty executed by the Company in favor of
the Agent for the benefit of the Holders of Secured Obligations pursuant to
which the Company shall guaranty all of the Obligations of the Subsidiary
Borrowers and the Subsidiary Obligors, in each case, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"HEDGING AGREEMENTS" is defined in Section 6.3(P).
------------------- ---------------
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
--------------------
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
---------------------------------
Obligations from time to time and shall refer to (i) each Lender in respect of
-
its Loans and the L/C Obligations owed directly or indirectly to such Lender
(including, if applicable, any agency or Affiliate of a Lender), (ii) the
Issuing Lenders in respect of Reimbursement Obligations and other Obligations
relating to its Letters of Credit, (iii) the Agent, the Arranger, and the
Issuing Lenders in respect of all other present and future obligations and
liabilities of any Borrower or any of their subsidiaries of every type and
description arising under or in connection with this Agreement or any other
Loan Document, (iv) each Indemnitee in respect of the obligations and
liabilities of any Borrower to such Person hereunder or under any of the Loan
Documents, (v) each Lender (or any agency or Affiliate thereof) in respect of
all Hedging Obligations of any Borrower or any of their Subsidiaries to such
lender (or agency or Affiliate thereof) and (vi) their respective successors,
transferees and assigns.
"INDEBTEDNESS" of any Person means (i) any indebtedness of such Person,
------------
contingent or otherwise, (a) in respect of borrowed money including all
principal, interest, fees and expenses with respect thereto (whether or not
the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or (b) evidenced by bonds, notes, acceptances,
debentures or other instruments or letters of credit (or reimbursement
obligations with respect thereto, including, in the case of the Borrowers,
Reimbursement Obligations with respect to amounts funded under the Letters of
Credit) or representing the balance deferred and unpaid of the purchase price
of any property (including pursuant to Capitalized Leases) or services, if and
to the extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles (except that any such balance that constitutes a trade
payable and/or an accrued liability arising in the ordinary course of business
shall not be considered Indebtedness); (ii) to the extent not otherwise
included, (a) any Capitalized Lease Obligations, (b) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production
from property now or hereafter owned or acquired by such Person, and (c)
Contingent Obligations in respect of Indebtedness of other Persons (exclusive
of whether such items would appear upon such balance sheet). The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent Obligations at such
date and (ii) in the case of Indebtedness of others secured by a Lien to which
the property or assets owned or held by such Person is subject, the lesser of
(x) the fair market value at such date of any asset subject to a Lien securing
the Indebtedness of others and (y) the amount of the Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in Section 9.7(B) hereof.
-------------------- ---------------
"INDEMNITEES" is defined in Section 9.7(B) hereof.
----------- ---------------
"INTEREST EXPENSE" means, for any period, the consolidated total interest
----------------
expense of the Company and its Subsidiaries, determined on a consolidated
basis, whether paid or accrued, but without duplication (including the
interest component of Capitalized Leases), but excluding interest expense not
payable in cash (including amortization of discount) and excluding the
arrangement fee set forth in the letter agreement between the Agent, the
Arranger and the Company dated February 25, 1998, all as determined in
conformity with Agreement Accounting Principles.
"INTEREST PERIOD" means, (x) with respect to a Eurodollar Loan, a period
----------------
of one (1), two (2), three (3) or six (6) months, and, to the extent available
to all of the Lenders, upon request of the applicable Borrower and only if the
Lenders, in their discretion, shall agree, nine (9) months or twelve (12)
months, and (y) with respect to a Korean Eurodollar Loan, a period of one
(1), two (2) or three (3) months, and, to the extent available to all of the
Lenders, upon request of Purina Korea, Inc. and only if the Lenders, in their
discretion, shall agree, six (6) months, in each case commencing on a Business
Day selected by the applicable Borrower pursuant to this Agreement. Such
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months and, if applicable,
nine or twelve months, thereafter; provided, however, that if there is no such
-------- -------
numerically corresponding day in such next, second, third or sixth succeeding
month and, if applicable, ninth or twelfth succeeding month, such Interest
Period shall end on the last Business Day of such next, second, third or sixth
succeeding month and, if applicable, ninth or twelfth succeeding month. With
respect to a Korean Won Advance, Interest Period means a period designated by
the Agent of approximately ninety (90) days. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, provided, however, that if said next
-------- -------
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
----------
acquisition by that Person of any Equity Interest, notes, debentures or other
securities, or of a beneficial interest in any Equity Interest, notes,
debentures or other securities, issued by any other Person, (ii) any purchase
by that Person of all or substantially all of the assets of a business
conducted by another Person, and (iii) any loan, advance (other than deposits
with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable, advances to employees and similar items in each
case made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Indebtedness to
such Person arising from a sale of property by such Person other than in the
ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
---
functions thereof.
"ISSUING LENDER" means, as the context may require, ABN AMRO Bank N.V.,
---------------
with respect to Letters of Credit issued by it pursuant to this Agreement, and
any other Lender that becomes an Issuing Lender, pursuant to Section 2.16,
------------
with respect to Letters of Credit issued by such Lender.
"KNOWLEDGE" means, at any time in respect of any Person and relative to
---------
any matter, knowledge which the Authorized Officers of such Person would
reasonably be expected to have regarding such matter.
"KOREAN CD RATE" means with respect to any Korean Won Advance for any
----------------
specified Interest Period, the rate per annum, as determined by the Agent,
shown on page "KWCD 3M" screen of the Bloomberg L.P. service (or such other
page as may replace the "KWCD 3M" screen on that service) for the purpose of
displaying the rate offered in Seoul, Korea for 91-day certificates of deposit
issued in Seoul, Korea as of 11:00 a.m. (Seoul time) five (5) Business Days
prior to the first day of such Interest Period.
"KOREAN EURODOLLAR ADVANCE" means an Advance to Purina Korea, Inc., in
---------------------------
Dollars which bears interest at the Korean Eurodollar Rate.
"KOREAN EURODOLLAR LOAN" means a Loan, or portion thereof, which bears
------------------------
interest at the Korean Eurodollar Rate.
"KOREAN EURODOLLAR RATE" means a rate per annum equal to the Eurodollar
------------------------
Rate minus the Applicable Eurodollar Margin plus 3.50% per annum.
----- ----
"KOREAN WON ADVANCE" means an advance made pursuant to Section 2.1
-------------------- -----------
denominated in Korean Won to Purina Korea, Inc.
"KOREAN WON LOAN" means with respect to a Lender, such Lender's portion
-----------------
of any Korean Won Advance made pursuant to Section 2.1.
------------
"L/C DRAFT" means a draft drawn on an Issuing Lender pursuant to a Letter
---------
of Credit.
"L/C INTEREST" is defined in Section 2.17.
------------- -------------
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
----------------
of (i) the aggregate of the amount then available for drawing under each of
the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the Issuing Lender, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of
all Letters of Credit requested by any Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
-------
this Agreement, including the Issuing Lenders and their respective successors
and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
---------------------
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER(S) OF CREDIT" means the letters of credit to be issued by one of
--------------------
the Issuing Lenders pursuant to Section 2.16 hereof.
-------------
"LIEN" means any lien (statutory or other), mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance or preference,
----
priority or security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means with respect to a Lender, such Lender's portion of any
-------
Advance made pursuant to Section 2.1.
------------
"LOAN ACCOUNT" is defined in Section 2.10(F) hereof.
------------- ----------------
"LOAN DOCUMENTS" means this Agreement and all other documents,
---------------
instruments and agreements executed in connection therewith or contemplated
----
thereby, including the letter agreements regarding fees among the Agent, the
Arranger, and the Company and between the Agent and the Borrower, in each case
as the same may be amended, restated or otherwise modified and in effect from
time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
------------
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
-------------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole,
(b) the ability of the Company and the other Borrowers and the Subsidiary
Obligors taken as a whole to perform their obligations under the Loan
Documents in any material respect, or (c) the ability of the Lenders or the
Agent to enforce in any material respect this Agreement, the Obligations or
their rights with respect to the Collateral other than any such inability
resulting form the gross negligence or willful misconduct of any Lender or the
Agent.
"MAXIMUM KOREAN COMMITMENT" shall mean the maximum amount which the
---------------------------
Lenders have agreed to provide as Loans or Letters of Credit to Purina Korea,
Inc. under this Agreement. The initial Maximum Korean Commitment is
$15,000,000.
"MAXIMUM KOREAN WON COMMITMENT" shall mean the maximum amount which the
-------------------------------
Lenders have agreed to provide as Loans or Letters of Credit to Purina Korea,
Inc. in Korean Won under this Agreement. The Dollar Amount of the initial
Maximum Korean Won Commitment is $7,500,000.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
-------
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
-------------------
4001(a)(3) of ERISA which is, or within the immediately preceding six (6)
years was, contributed to by either the Company or any member of the
Controlled Group.
"NOTICE OF ASSIGNMENT" is defined in Section 12.3(B) hereof.
---------------------- ----------------
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
-----------
covenants and duties owing by any of the Borrowers or Subsidiary Obligors to
the Agent, the Arranger, or the Lenders, the Issuing Lenders, any Affiliate of
any of the foregoing or any Indemnitee, of any kind or nature, present or
future, arising under this Agreement or any other Loan Document, whether or
not evidenced by any note, guaranty or other instrument, whether or not for
the payment of money, whether arising by reason of an extension of credit,
loan, guaranty, indemnification, or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements, paralegals' fees (in each case whether or
not allowed), and any other sum chargeable to any of the Borrowers or
Subsidiary Obligors under this Agreement or any other Loan Document.
"OTHER TAXES" is defined in Section 2.10(E)(ii) hereof.
------------ --------------------
"PARTICIPANTS" is defined in Section 12.2(A) hereof.
------------ ----------------
"PAYMENT DATE" means the last Business Day of each March, June, September
------------
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
----
thereto.
"PERMITTED ACQUISITION" is defined in Section 6.3(G) hereof.
---------------------- ---------------
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
--------------------------------------------
Obligations of the Borrowers and all other Subsidiaries of the Company
--
identified as such on Schedule 1.1.1 to this Agreement.
- ---------------
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrowers
-------------------------------
and all other Subsidiaries of the Company identified as such on Schedule 1.1.2
--------------
to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrowers
--------------------------------
and all other Subsidiaries of the Company identified as such on Schedule 1.1.3
--------------
to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrowers or
-------------------------
all other Subsidiaries of the Company identified as such on Schedule 1.1.4 to
--------------
this Agreement.
"PERSON" means any natural person, corporation, firm, company, joint
------
venture, partnership, association, enterprise, trust or other entity or
organization, or any government, domestic or foreign, or political subdivision
or any agency, department or instrumentality thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
----
respect of which the Company or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means those certain Pledge Agreements pursuant to
------------------
which the Company pledges to the Agent for the benefit of the Holders of
Secured Obligations all of the Capital Stock of each of the Subsidiary
Borrowers and Subsidiary Obligors.
"PRIME RATE" shall mean the rate of interest per annum announced from
-----------
time to time by the Agent as its prime lending rate in effect at its principal
office in New York, New York; each change in the Prime Rate shall be effective
on the date such change is announced. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate charged to any
customers. ABN AMRO Bank N.V. and the other Lenders may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
----------------
obtained by dividing (A) such Lender's Commitment at such time (as adjusted
from time to time in accordance with the provisions of this Agreement) by (B)
the Aggregate Commitments at such time; provided, however, if all of the
-------- -------
Commitments are terminated pursuant to the terms of this Agreement, then "Pro
Rata Share" means the percentage obtained by dividing (x) the sum of all of
such Lender's Loans and L/C Obligations by (y) the aggregate amount of all
Loans and L/C Obligations.
"PURCHASERS" is defined in Section 12.3(A) hereof.
---------- ----------------
"RATE OPTION" means the applicable Eurodollar Rate or Base Rate.
------------
"REGULATION G" means Regulation G of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by nonbank, nonbroker lenders for the
purpose of purchasing or carrying margin stock (as defined therein).
"REGULATION T" means Regulation T of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by and to brokers and dealers of
securities for the purpose of purchasing or carrying margin stock (as defined
therein).
"REGULATION U" means Regulation U of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying Margin Stock applicable to member banks of the Federal Reserve
System.
"REGULATION X" means Regulation X of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by foreign lenders for the purpose of
purchasing or carrying margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in Section 2.18 hereof.
------------------------- -------------
"RELEASE" means any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration of
---
Contaminants into the indoor or outdoor environment, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" is defined in Section 2.15 hereof.
------------------- -------------
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
----------------
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
after such event occurs; provided, however, that a failure to meet the minimum
-------- -------
funding standards of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
----------------
are at least sixty-six and two-thirds percent (66-2/3%), provided, however,
-------- -------
that, if any of the Lenders shall have failed to fund its Revolving Credit
Share of any Loan requested by any Borrower which such Lenders are obligated
to fund under the terms of this Agreement and any such failure has not been
cured, then for so long as such failure continues, "REQUIRED LENDERS" means
Lenders (excluding all Lenders whose failure to fund such Loans have not been
so cured) whose Pro Rata Shares represent at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate Pro Rata Shares of such non-defaulting
Lenders; provided, further, however, that, if the Commitments have been
-------- ------- -------
terminated pursuant to the terms of this Agreement, "REQUIRED LENDERS" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C
Obligations are at least sixty-six and two-thirds percent (66-2/3%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
-------------------
other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject including, without limitation, the Securities Act, the Securities
Exchange Act, Regulations G, T, U and X, ERISA, the Fair Labor Standards Act,
the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or Permit or environmental,
labor, employment, occupational safety or health law, rule or regulation,
including Environmental, Health or Safety Requirements of Law.
"RESERVE REQUIREMENT" means the maximum reserve requirement, as
--------------------
prescribed by the Board of Governors of the Federal Reserve System (or any
---
successor) with respect to "Eurodollar liabilities" or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or category of extensions of
credit or other assets which includes loans by a non-United States office of
any Lender to United States residents.
"RESET DATE" is defined in Section 1.2.
----------- ------------
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
-------------------------
direct or indirect, on account of any ownership, membership or other Equity
Interest in the Company now or hereafter outstanding, except a dividend
payable solely in additional interests of the same type, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any ownership, membership or other Equity
Interest in the Company or any such interests or shares of any class of
Capital Stock of the Company now or hereafter outstanding, (iii) any payment
made to redeem, purchase, repurchase or retire, or to obtain the surrender of,
any outstanding options or other rights to acquire any ownership, membership
or other Equity Interests in the Company and (iv) any payment of a claim for
the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of any ownership, membership or other Equity
Interests in the Company or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission.
"REVOLVING ADVANCE" means a borrowing hereunder consisting of the
------------------
aggregate amount of the several ratable Revolving Loans made by the Lenders to
-
any Borrower having Commitments to such Borrower of the same Type and, in the
case of Eurodollar Advances, denominated in the same currency and for the same
Interest Period.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
-----------------------------
by which the Aggregate Commitment at such time exceeds the Dollar Amount of
the Revolving Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
-----------------------------
(i) the outstanding principal Dollar Amount of the Revolving Loans at such
time, plus (ii) the L/C Obligations at such time.
----
"REVOLVING CREDIT SHARE" means, with respect to any Lender, the
------------------------
percentage obtained by dividing (A) such Lender's Commitment at such time by
---
(B) the Aggregate Commitment at such time.
"REVOLVING LOAN" is defined in Section 2.1.
--------------- ------------
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 3.2 hereof.
------------------------------- ------------
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
--------------------
all Hedging Obligations owing to one or more of the Lenders (or any agency or
Affiliate thereof) by any of the Borrowers or Subsidiary Obligors.
"S&P" means Standard & Poor's Ratings Group.
---
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any
----------------------
member of the Controlled Group for employees of the Company or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
----------
outstanding Capital Stock having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any company, partnership, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a direct or indirect Subsidiary of the Company.
"SUBSIDIARY BORROWERS" means those Borrowers which are Subsidiaries of
---------------------
the Company.
"SUBSIDIARY OBLIGORS" means Purina Korea, Inc., a corporation organized
--------------------
under the laws of Korea, Industrias Purina S.A. de C.V., a company organized
under the laws of Mexico, Purina Colombiana S.A., a company organized under
the laws of Colombia, Agribrands Purina do Brasil, Ltda., a company organized
under the laws of Brazil, Purina Philippines, Inc., a corporation organized
under the laws of the Philippines, and Purina de Venezuela, C.A., a company
organized under the laws of Venezuela.
"TAXES" is defined in Section 2.10(E)(i) hereof.
----- -------------------
"TERMINATION DATE" means the earlier of (a) March 31, 2001 or (b) the
-----------------
date of termination of the Commitments pursuant to Section 8.1.
------------
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
------------------
Benefit Plan; (ii) the withdrawal of the Company or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Company
or such Controlled Group member was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or the cessation of operations which results in
the termination of employment of twenty percent (20%) of Benefit Plan
participants who are employees of the Company or any member of the Controlled
Group; (iii) the imposition of an obligation on the Company or any member of
the Controlled Group under Section 4041 of ERISA to provide affected parties
written notice of intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Benefit Plan; or (vi) the
partial or complete withdrawal of the Company or any member of the Controlled
Group from a Multiemployer Plan.
"TOTAL DEBT" means the sum of all Indebtedness of the Company and its
-----------
Subsidiaries (including, without limitation and without duplication, standby
letters of credit (whether on or off-balance sheet)) minus ordinary course
-----
liability for trade indebtedness (including reimbursement under commercial
letters of credit).
"TRANCHE C OBLIGATIONS" means the Obligations of the Borrowers other than
---------------------
Purina Korea, Inc.
"TRANCHE D OBLIGATIONS" means the Obligations of the Subsidiary Obligors.
---------------------
"TRANSFEREE" is defined in Section 12.5 hereof.
---------- -------------
"TYPE" means, with respect to any Advance, its nature as a Base Rate
----
Advance or a Eurodollar Advance or a Korean Eurodollar Advance or a Korean Won
Advance.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or
------------------
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any accounting terms used in
this Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with United States generally
accepted accounting principles in existence as of the date hereof.
1.2 Currency Equivalents. Not later than 1:00 p.m., New York time or
---------------------
Seoul, Korea time, as applicable, on each Calculation Date, the Agent shall
(i) determine the Exchange Rate as of such Calculation Date with respect to
Korean Won and (ii) give notice thereof to the Company and the Lenders. The
Exchange Rates so determined shall become effective immediately with respect
to any new Loans being made or Letters of Credit being issued on any
Calculation Date and otherwise on the fifth Business Day immediately following
the relevant Calculation Date (a "RESET DATE"), shall remain effective until
the next succeeding Reset Date and shall during the period of their
effectiveness be employed in making any computation of currency equivalents
required to be made under this Agreement.
ARTICLE II: THE CREDITS
----------------------------
2.1 Revolving Loans to the Company and the Subsidiary Borrowers. Upon
-----------------------------------------------------------
the satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2
------------ ---
hereof, from and including the date of this Agreement and prior to the
Termination Date, each Lender with a Commitment severally and not jointly
agrees, on the terms and conditions set forth in this Agreement, to make
revolving loans to the Company and/or the Subsidiary Borrowers from time to
time, in Dollars or, with respect to Purina Korea, Inc., Korean Won, in a
Dollar Amount, not to exceed such Lender's Revolving Credit Share of the
Dollar Amount of the Revolving Credit Availability at such time (each
individually, a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS");
provided, however, at no time shall the Dollar Amount of the Revolving Credit
------ -------
Obligations in Korean Won exceed the Maximum Korean Won Commitment other than
as a result of currency fluctuations and then only to the extent permitted in
Section 2.2(B); provided, further, however, at no time shall the amount of the
-------------- -------- ------- -------
Revolving Credit Obligations owed by any of the Borrowers pursuant to this
Agreement exceed the corresponding amounts listed below:
Agribrands International, Inc. $ 5,000,000
Agribrands Canada, Inc. $ 6,500,000
Purina Italia S.p.A. $ 4,000,000
Purina Espana, S.A. $ 2,500,000
Purina Hungaria Animal Feed
Production & Trading Company Ltd. $ 2,000,000
Purina Korea, Inc. $15,000,000
Each Revolving Advance under this Section 2.1 shall consist of Revolving Loans
-----------
made by each such Lender ratably in proportion to such Lender's respective
Revolving Credit Share. Subject to the terms of this Agreement, the Borrowers
may borrow, repay and reborrow at any time prior to the Termination Date.
Korean Won Advances and Korean Eurodollar Advances shall bear interest at the
rates prescribed in Section 2.4(c). On the Termination Date, the outstanding
--------------
principal balance of the Revolving Loans shall be paid in full by the
applicable Borrower and prior to the Termination Date prepayments of the
Revolving Loans shall be made if and to the extent required in Section 2.2(B).
--------------
2.2 Prepayments (A) Optional Payments. Upon prior notice to the Agent
----------- -----------------
which notice shall be given not later than 11:00 a.m. (New York time) on the
date of payment, the Borrowers may from time to time repay or prepay, without
penalty or premium all or any part of outstanding Base Rate Advances. Subject
to payment of all amounts payable pursuant to Section 3.4 upon not less than
-----------
(x) five (5) Business Days' prior notice with respect to Advances to Purina
Korea, Inc. and (y) two (2) Business Day's prior notice with respect to all
other Advances, in each case to the Agent which notice shall be given not
later than 11:00 a.m. (New York time or Seoul, Korea time, as applicable), the
Borrowers may from time to time repay or prepay all or any part of the Korean
Eurodollar Advances or Korean Won Advances, or Eurodollar Advances,
respectively. Unless the aggregate outstanding principal balance of the
applicable Loans is to be prepaid in full, voluntary prepayments of the Loans
shall be in the same aggregate minimum amounts and integral multiples in
excess of such amounts as are required for borrowings of Loans of the same
Type and in the same currency as set forth in Section 2.5.
------------
(B) Mandatory Prepayments. If at any time the Dollar Amount of the
----------------------
Revolving Credit Obligations is greater than 105% of the Aggregate Commitment,
the Borrowers shall within five (5) Business Days after receiving notice
thereof from the Agent make a mandatory prepayment (i) of the Obligations in
an amount equal to such excess and (ii) of the Korean Won Loans and/or L/C
Obligations denominated in Korean Won in an aggregate amount such that after
giving effect thereto the Dollar Amount of the sum of the Korean Won Loans and
L/C Obligations denominated in Korean Won is less than or equal to the Maximum
Korean Won Commitment.
2.3 Method of Borrowing. The Agent shall promptly notify each Lender
--------------------
having Commitments of each Revolving Advance on the Borrowing Date of each
Base Rate Advance, three (3) Business Days before the Borrowing Date of each
Eurodollar Advance, three (3) Business Days before the Borrowing Date of each
Korean Eurodollar Advance, and five (5) Business Days before the Borrowing
Date for each Korean Won Advance, and, not later than 2:00 p.m. (New York time
or Seoul, Korea time, as applicable) on each Borrowing Date, each Lender
having Revolving Credit Commitments shall make available its Revolving Loan or
Loans, in funds immediately available in New York, New York to the Agent at
its address specified pursuant to Article XIII hereof unless the Agent has
------------
notified the Lenders that such Loan is to be made available to Purina Korea,
Inc. at the Agent's office in Seoul, Korea, in which case each Lender shall
make available its Revolving Loan or Loans, in funds immediately available to
the Agent at its office in Seoul, Korea not later than 2:00 p.m. at the
Agent's office in Seoul, Korea in Korean Won or Dollars, as requested. The
Agent will promptly make the funds so received from the Lenders available to
the applicable Borrower.
2.4 Method of Selecting Types and Interest Periods for Advances;
------------------------------------------------------------------
Determination of Applicable Margins, Interest on Advances to Purina Korea,
-----------------------------------------------------------------------
Inc. The Advances (other than Korean Won Advances or Korean Eurodollar
Advances) may be Base Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the applicable Borrower in accordance with this Article
-------
II. Advances to Purina Korea, Inc., shall bear interest as prescribed in
-
Section 2.4(c). The applicable Borrower may select, in accordance with this
-
Article II, Rate Options and Interest Periods applicable to portions of the
----------
Revolving Loans.
-
(a) Method of Selecting Types and Interest Periods for Advances The
-------------------------------------------------------------
applicable Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance or Korean Eurodollar Advance, the Interest Period
applicable to each Advance from time to time. The applicable Borrower shall
give the Agent irrevocable notice (a "BORROWING NOTICE") not later than 11:00
a.m., New York time (or Seoul time for Korean Won Advances or Korean
Eurodollar Advance) (i) on the Borrowing Date of each Base Rate Advance; (ii)
three (3) Business Days before the Borrowing Date for each Eurodollar Advance;
(iii) three (3) Business Days before the Borrowing Date for each Korean
Eurodollar Advance; and (iv) five (5) Business Days before the Borrowing Date
for each Korean Won Advance, specifying: (i) the Borrowing Date (which shall
be a Business Day) of such Advance; (ii) the aggregate amount of such Advance;
(iii) the Type of Advance selected, as applicable; and (iv) in the case of
each Eurodollar Advance or Korean Eurodollar Advance, the Interest Period.
There shall be (x) no more than twenty (20) Interest Periods in effect with
respect to all of the Revolving Loans at any time, and (y) with respect to any
Borrower individually, no more than four (4) Interest Periods in effect with
respect to all of the Revolving Loans made to such Borrower at any time, in
each case, with Interest Periods for the same term but in different currencies
or to different Borrowers being treated as separate Interest Periods. Each
Base Rate Advance shall bear interest from and including the date of the
making of such Advance to (but not including) the date of repayment thereof at
the Base Rate, changing when and as such Base Rate changes. Each Eurodollar
Advance, Korean Eurodollar Advance and Korean Won Advance shall bear interest
from and including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the interest rate
determined as applicable to such Advance. All Obligations (other than
Advances) shall bear interest from and including the date such amount is
payable under the terms of this Agreement or the other Loan Documents to (but
not including) the date of repayment thereof at the Base Rate, changing when
and as such Base Rate changes. Changes in the rate of interest on that
portion of any Advance maintained as a Base Rate Loan or such other
Obligations will take effect simultaneously with each change in the applicable
Base Rate.
(b) Determination of Applicable Margins, Applicable Letter of Credit Fee
--------------------------------------------------------------------
and Applicable Facility Fee.
------------------------------
(i) Definitions. As used in this Section 2.4(b) and in this Agreement,
----------- --------------
the following terms shall have the following meanings:
"Applicable Margins", "Applicable Facility Fee" and "Applicable Letter of
------------------ ----------------------- --------------------
Credit Fee" shall mean the Applicable Base Rate Margins and/or Applicable
-----------
Eurodollar Margins, with respect to Loans and the Applicable Facility Fee
----
and/or Applicable Letter of Credit Fee, with respect to fees payable as the
----
case may be. The Applicable Margins shall be determined, in accordance with
--
the provisions of this Section 2.4(b), by reference to the following:
- ---------------
EBITDA APPLICABLE APPLICABLE APPLICABLE LETTER OF APPLICABLE APPLICABLE
CONTRIBUTION BASE RATE EURODOLLAR MARGIN CREDIT FEE FOR FACILITY FEE FOR FACILITY FEE FOR
RATIO MARGIN FOR FOR TRANCHE A LETTERS OF CREDIT COMMITMENTS COMMITMENTS
TRANCHE A OBLIGATIONS AND ISSUED FOR THE WITH RESPECT TO WITH RESPECT TO
OBLIGATIONS APPLICABLE LETTER OF ACCOUNT OF TRANCHE A TRANCHE B
CREDIT FEE FOR LETTERS SUBSIDIARY OBLIGORS OBLIGATIONS OBLIGATIONS
OF CREDIT ISSUED FOR (OTHER THAN PURINA
THE ACCOUNT OF KOREA, INC.)
BORROWERS (OTHER
THAN PURINA KOREA,
INC.)
LEVEL I GREATER THAN
1.50 TO 1.00 0.25% 1.50% 1.75% 0.50% Z 1.75%
LEVEL II LESS THAN OR
EQUAL TO 1.50 TO
1.00 AND GREATER 0% 1.00% 1.25% 0.375% 1.25%
THAN OR EQUAL TO
1.00 TO 1.00
LEVEL III LESS THAN 1.00
TO 1.0
0% 0.75% 1.00% 0.25% 1.00%
LEVEL IV COMPANY'S
RATING EQUAL TO
OR BETTER THAN 0% 0.50% 0.75% 0.175% 0.75%
BBB- FROM S&P
OR BAA3 FROM
XXXXX'X
(ii) Determination of Applicable Margins, Applicable Letter of Credit Fee and
------------------------------------------------------------------------
Applicable Facility Fee.
-------------------------
(A) The Applicable Margins in respect of any Loan, the Applicable Letter
of Credit Fee payable under Section 2.10(C) and the Applicable Facility Fee
---------------
payable under Section 2.10(c) shall be determined by reference to the table
----------------
set forth in clause (i) above, as applicable, on the basis of the EBITDA
-----------
Contribution Ratio determined by reference to the most recent financial
statements delivered pursuant to Section 6.1(A)(i) or 6.1(A)(ii); provided,
----------------- ---------- --------
however, for the period from the Closing Date until August 31, 1998, the
-----
Applicable Margins, Applicable Letter of Credit Fee, Applicable Facility Fee
---
shall be at Level II; provided, further that Level IV shall be applicable only
-------- -------
in the event that the Company shall have a rating of equal to or better than
BBB- from S&P or Baa3 from Xxxxx'x and, provided, further, however, that the
-------- ------- -------
Borrowers shall not be eligible for any reduction in the pricing prescribed in
this Section 2.4 in the event that as of the date of determination, the
------------
Company's Consolidated EBITDA for the most recently completed four fiscal
-
quarters (or, prior to March 31, 1999, the period from the Closing Date to the
end of the most recently completed quarter) shall be less than 80% of the
Company's forecasted Consolidated EBITDA for such period as set forth on
Exhibit G hereto.
-----
(B) Upon receipt of the financial statements delivered pursuant to
Section 6.1(A)(i) or Section 6.1(A)(ii), as applicable, the Applicable Margins
------------ ------------------
for all outstanding Loans, the Applicable Letter of Credit Fee and Applicable
Facility Fee shall be adjusted, such adjustment being effective on the first
(1st) Business Day after receipt of such financial statements and the
Compliance Certificate to be delivered in connection therewith; provided,
--------
however, if the Borrowers shall not have timely delivered such financial
---
statements in accordance with Section 6.1(A)(i) or Section 6.1(A)(ii), as
- ------------------ ------------------
applicable, beginning with the date upon which such financial statements
should have been delivered and continuing until such financial statements are
delivered, it shall be assumed for purposes of determining the Applicable
Margins, the Applicable Facility Fee and the Applicable Letter of Credit Fee
that the EBITDA Contribution Ratio was greater than 1.50 to 1.0.
(c) Interest on Advances to Purina Korea, Inc. Advances to Purina
----------------------------------------------
Korea, Inc. in Korean Won shall bear interest in the per annum rate equal to
the Korean CD Rate minus 6.00% per annum. Advances to Purina Korea, Inc. in
-----
Dollars shall bear interest at a rate per annum equal to the Korean Eurodollar
Rate.
2.5 Minimum Amount of Each Advance. Each Eurodollar Advance or Korean
------------------------------
Eurodollar Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $100,000 if in excess thereof). Each Base Rate Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), provided, however, that any Base Rate Advance may be in the amount
-------- -------
of the unused Aggregate Commitment. Each Korean Won Advance shall be in the
minimum amount of 1,000,000,000 Won (and in multiples of 500,000,000 Won if in
excess thereof).
2.6 Method of Selecting Types and Interest Periods for Conversion and
------------------------------------------------------------------
Continuation of Advances.
------------------------
(A) Right to Convert. The Borrowers may elect from time to time,
------------------
subject to the provisions of Section 2.3, Section 2.4, and this Section 2.6 to
----------- ----------- -----------
convert all or any part of a Loan of any Type into any other Type or Types of
Loans; provided that any conversion of any Eurodollar Advance or Korean
--------
Eurodollar Advance shall be made on, and only on, the last day of the Interest
Period applicable thereto.
(B) Automatic Conversion and Continuation. Base Rate Loans shall
----------------------------------------
continue as Base Rate Loans unless and until such Base Rate Loans are
converted into Eurodollar Loans. Eurodollar Loans shall continue as
Eurodollar Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Loans shall be automatically converted
into Base Rate Loans unless the applicable Borrower shall have given the Agent
requesting that, at the end of such Interest Period, such Eurodollar Loans
continue as a Eurodollar Loan. Korean Eurodollar Advances shall continue as
Korean Eurodollar Advances until repaid and Korean Won Advances shall continue
as Korean Won Advances until repaid.
(C) No Conversion Post-Default or Post-Unmatured Default.
---------------------------------------------------------
Notwithstanding anything to the contrary contained in Section 2.6(A) or
--- --------------
Section 2.6(B), no Loan may be converted into or continued as a Eurodollar
---------
Loan except with the consent of the Required Lenders when any Default or
Unmatured Default has occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
------------------------------
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of
a Base Rate Loan into a Eurodollar Loan or continuation of a Eurodollar Loan
not later than 11:00 a.m. (New York time) three Business Days before the
proposed date of such conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or
continued; and (3) the amounts of Eurodollar Loan(s) into which such Loan is
to be converted or continued and the duration of the Interest Periods
applicable thereto.
2.7 Default Rate. After the occurrence and during the continuance of a
------------
Default, the interest rate(s) applicable to the Obligations and the letter of
credit fee payable under Section 2.20 with respect to Letters of Credit shall
------------
be increased by two percent (2.0%) per annum above the Base Rate, Eurodollar
Rate, Korean CD Rate, Korean Eurodollar Rate or Applicable Letter of Credit
Fee, as applicable.
2.8 Method of Payment. All payments of principal, interest, and fees
-------------------
hereunder shall be made, without setoff, deduction or counterclaim, to the
Agent (i) at the Agent's office in New York, New York (or, in the case of
Advances to Purina Korea, Inc., Seoul, Korea) in immediately available funds
or at any other Lending Installation of the Agent specified in writing by 9:00
a.m. (New York time) on the day before the date when due by the Agent to the
Company, by 12:00 noon (New York time) with respect to Advances to Borrowers
other than Purina Korea, Inc. and 12:00 noon (Seoul time) with respect to
Advances to Purina Korea, Inc. on the date when due and shall be made ratably
among the applicable Lenders with respect to Revolving Advances in proportion
to their Revolving Credit Shares (unless such amount is not to be shared
ratably in accordance with the other terms hereof). Each Advance shall be
repaid or prepaid in the currency in which it was made in the amount borrowed
and interest payable thereon shall be paid in such currency. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to Article XIII or at any Lending
------------
Installation specified in a notice received by the Agent from such Lender by
9:00 a.m. (New York time) on the Business Day prior to the date such payment
is to be made. The Borrowers authorize the Agent to charge any account of any
Borrower maintained with the Agent, as applicable, for each payment of
principal, interest and fees as it becomes due hereunder if not paid when due.
Notwithstanding the foregoing provisions of this Section, if, after the making
of any Advance in Korean Won, currency control or exchange regulations are
imposed in the Republic of Korea with the result that different types of such
currency (the "NEW CURRENCY") are introduced and the type of currency in which
the Advance was made (the "ORIGINAL CURRENCY") no longer exists or Purina
Korea, Inc. is not able to make payment to the Agent for the account of the
applicable Lenders in such Original Currency, then all payments to be made by
Purina Korea, Inc. hereunder in such Original Currency shall be made in such
amount and such type of the New Currency or Dollars as shall be equivalent to
the amount of such payment otherwise due hereunder in the Original Currency as
determined as of the date of repayment, it being the intention of the parties
hereto that the Borrowers take all risks of the imposition of any such
currency control or exchange regulations.
2.9 Evidence of Debt; Telephonic Notices.
----------------------------------------
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(b) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period,
if any, applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to subsections
-----------
(a) or (b) of this Section shall be prima facie evidence of the existence and
--- --- ----- -----
amounts of the obligations recorded therein; provided that the failure of any
--------
Lender or the Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of any Borrower to repay the Loans in
accordance with the terms of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it each be
evidenced by a promissory note. In such event, each Borrower shall prepare,
execute and deliver to such Lender a promissory note for Revolving Loans
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Agent and
consistent with the terms of this Agreement. Thereafter, the Loans evidenced
by such promissory notes and interest thereon shall at all times (including
after assignment pursuant to Section 12.3) be represented by one or more
-------------
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
(e) Each Borrower authorizes the Lenders and the Agent to extend,
convert or continue Advances, effect selections of Types of Advances and to
transfer funds based on telephonic notices made by any person or persons the
Agent or any Lender in good faith believes to be an Authorized Officer acting
on behalf of any Borrower. Each Borrower agrees to deliver promptly to the
Agent a written confirmation of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error. In case of disagreement
concerning such notices, if the Agent has recorded telephonic borrowing
notices, such recordings will be made available to the Company.
2.10 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest
-------------------------------------------------------------------
and Fee Basis; Taxes; Loan and Control Accounts.
------------------------------------------------------
(A) Promise to Pay. Each of the Borrowers unconditionally promises to
--------------
pay when due without setoff, deduction or counterclaim the principal amount of
each Loan made to it and all other Obligations incurred by it, and to pay all
unpaid interest accrued thereon, in accordance with the terms of this
Agreement, it being understood and agreed that each Subsidiary Borrower and
Subsidiary Obligor shall be obligated to repay only the Loans made to it and
pay the other Obligations incurred by it and certain other Loans made and
Obligations incurred by other Subsidiary Borrowers and Subsidiary Obligors.
Subject to the foregoing, the Borrowers and Subsidiary Obligors agree that
they will pay the Tranche C Obligations on or before the Termination Date and
the Tranche D Obligations on or before the date on which the Aggregate
Commitment with respect to Tranche D Obligations shall expire.
(B) Interest Payment Dates. Interest accrued on each Base Rate Loan
------------------------
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Base Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Loan or
Korean Eurodollar Loan or Korean Won Loan shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Loan or
Korean Eurodollar Loan is prepaid, whether by acceleration or otherwise, and
at maturity; provided, interest accrued on each Eurodollar Loan or Korean
--------
Eurodollar Loan having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest
Period. Interest accrued on the principal balance of all other Obligations
shall be payable in arrears (i) upon repayment thereof in full or in part,
(ii) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise) and (iii) if
not theretofore paid in full, on demand, commencing on the first such day
following the date such Obligation became payable pursuant to the terms of
this Agreement or the other Loan Documents.
(C) Fees. (i) The Company shall pay or cause the appropriate
----
Subsidiary to pay to the Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, a facility fee accruing at the rate of the
Applicable Facility Fee per annum from and after the Closing Date until the
Termination Date on the sum of the Aggregate Commitment in effect from time to
time minus the Maximum Korean Won Commitment. All such facility fees payable
under this clause (C) shall be payable quarterly in arrears on each Payment
-----------
Date commencing June 30, 1998 and on the Termination Date. In addition, the
Company shall pay to the Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, a Korean facility fee accruing at the rate of
3.00% per annum payable on the Maximum Korean Won Commitment from and after
the Closing Date until the Termination Date, payable quarterly in arrears on
each Payment Date commencing June 30, 1998 and on the Termination Date.
(ii) The Company agrees to pay or cause the appropriate Subsidiary to
pay to the Agent the fees set forth in the letter agreement between the Agent
and the Company dated February 25, 1998.
(D) Interest and Fee Basis. Interest on Eurodollar Loans, Korean
-------------------------
Eurodollar Loans and Korean Won Loans and fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest on Base Rate Loans
shall be calculated for actual days elapsed on the basis of a 365/366-day
year. Interest shall be payable for the day an Obligation is incurred but not
for the day of any payment on the amount paid if payment is received prior to
12:00 noon (New York time) with respect to Advances (other than Advances to
Purina Korea, Inc.) and 12:00 noon (Seoul time) with respect to Advances to
Purina Korea, Inc. If any payment of principal of or interest on a Loan or
any payment of any other Obligations shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment; provided,
--------
however, if such extension of payment would cause payment of principal or
---
interest on any Eurodollar Loan or Korean Eurodollar Loan to be made in the
next following calendar month, such payment shall be made on the immediately
preceding Business Day.
For purposes of the Interest Act (Canada): (i) whenever any interest
under this Agreement is calculated using a rate based on a year of 360 days,
such rate determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to (x) the applicable rate based on a year of 360 days,
(y) multiplied by the actual number of days in the calendar year in which the
period for which such interest is calculated ends, and (z) divided by 360;
(ii) the principle of deemed reinvestment of interest shall not apply to any
interest calculation under this Agreement; and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.
Notwithstanding any provision to the contrary contained in this
Agreement, in no event shall the aggregate "interest" (as defined in Section
347 of the Criminal Code (Canada), as the same may be amended, replaced or
re-enacted from time to time) payable under this Agreement exceed the maximum
amount of interest on the "credit advanced" (as defined in that section) under
this Agreement lawfully permitted under that section and, if any payment,
collection or demand pursuant to this Agreement in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of
that section, such payment, collection or demand shall be deemed to have been
made by mutual mistake of the relevant Borrower and the Agent and the Lenders
and the amount of such payment or collection shall be refunded to the relevant
Borrower. For purposes of this Agreement, the effective annual rate of
interest shall be determined in accordance with generally accepted actuarial
practices and principles over the term the Revolving Credit Loans are
outstanding on the basis of annual compounding of the lawfully permitted rate
of interest and, in the event of any dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by the Agent will be conclusive for
the purposes of such determination.
(E) Taxes.
-----
(i) Any and all payments by any of the Borrowers or Subsidiary Obligors
hereunder shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings or any liabilities with respect thereto including those arising
after the date hereof as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by a
Governmental Authority but excluding, in the case of each Lender and the
Agent, such taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by such Lender's or Agent's, as the case
may be, income by the United States of America or any Governmental Authority
of the jurisdiction under the laws of which such Lender or Agent, as the case
may be, is organized or incorporated (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities which the Agent or
a Lender determines to be applicable to this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit being
hereinafter referred to as "TAXES"). Subject to Section 2.10(E)(vii), if any
---------------------
of the Borrowers or Subsidiary Obligors shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under the other Loan
Documents to any Lender or the Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.10(E))
---------------
such Lender or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Borrower or
Subsidiary Obligor shall make such deductions, and (iii) such Borrower or
Subsidiary Obligor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. If a
withholding tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after the date of this Agreement,
to such payments by any of the Borrowers made to the Lending Installation or
any other office that a Lender may claim as its Lending Installation, or (z)
after such Lender's selection and designation of any other Lending
Installation, to such payments made to such other Lending Installation, such
Lender shall use reasonable efforts to make, fund and maintain its Loans and
issue Letters of Credit through another Lending Installation of such Lender in
another jurisdiction so as to reduce the Borrowers' liability hereunder, if
the making, funding or maintenance of such Loans and the issuance of such
Letters of Credit through such other Lending Installation of such Lender does
not, in the good faith judgment of such Lender, otherwise adversely affect
such Loans, or obligations under the Commitments or such Lender. With respect
to such deduction or withholding for or on account of any Taxes and to confirm
that all such Taxes have been paid to the appropriate Governmental
Authorities, the Company shall promptly (and in any event not later than
thirty (30) days after receipt) furnish to each Lender and the Agent such
certificates, receipts and other documents as may be required (in the judgment
of such Lender or the Agent) to establish any tax credit to which such Lender
or the Agent may be entitled. A payment may be made by the Company or by the
Subsidiary that is the Borrower with respect to the Loan that gives rise to
such payment.
(ii) In addition, the Company agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges, or
similar levies that arise from any payment made hereunder, from the issuance
of Letters of Credit hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit (hereinafter
referred to as "OTHER TAXES").
(iii) Subject to Section 2.10(E)(vii), the Company indemnifies each
---------------------
Lender and the Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.10(E)) paid by such Lender
---------------
or the Agent (as the case may be) and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. This
indem-nification shall be made within thirty (30) days after the date such
Lender or the Agent (as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender or the Agent
under this Section 2.10(E) submitted to the Company and the Agent by such
----------------
Lender or the Agent shall show in reasonable detail the amount payable and the
calculations used to determine such amount and shall, absent manifest error,
be final, conclusive and binding upon all parties hereto.
(iv) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes by any Borrower or Subsidiary Obligor, such Borrower or Subsidiary
Obligor shall furnish to the Agent the original or a certified copy of a
receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of any of
the Borrowers or Subsidiary Obligor hereunder, the agreements and obligations
of the Borrowers and Subsidiary Obligor contained in this Section 2.10(E)
---------------
shall survive the payment in full of principal and interest hereunder, the
termination of the Letters of Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrowers and Subsidiary
Obligor under this Section 2.10(E) (except as expressly provided by subsection
--------------- ----------
(vii) below), (A) each Lender that has a Commitment that is not created or
-----
organized under the laws of the United States of America or a political
---
subdivision thereof shall deliver to the Company and the Agent on or before
---
the Closing Date, or, if later, the date on which such Lender becomes a Lender
--
pursuant to Section 12.3 hereof, a true and accurate certificate executed in
------------
duplicate by a duly authorized officer of such Lender, in a form satisfactory
to the Company and the Agent, to the effect that such Lender is capable under
the provisions of an applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied by two executed
copies of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of the
IRS) of receiving payments of interest and fees hereunder without deduction or
withholding of United States federal income tax and (B) each Lender shall
deliver to the Company and the Agent on or before the Closing Date, or, if
later, the date on which such Lender becomes a Lender, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender,
in a form satisfactory to the Company and the Agent, to the effect that such
Lender is capable under the provisions of an applicable tax treaty or under
the provisions of applicable law of receiving payments of interest with
respect to the Advances to Purina Korea, Inc. hereunder without deduction or
withholding of income tax. Each such Lender further agrees to deliver to the
Company and the Agent, from time to time a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender
substantially in a form satisfactory to the Company and the Agent, before or
promptly upon the occurrence of any event requiring a change in the most
recent certificate previously delivered by it pursuant to this Section
-------
2.10(E)(vi). Further, each Lender which delivers a certificate accompanied by
----
Form 1001 of the IRS covenants and agrees to deliver to the Company and the
Agent within fifteen (15) days prior to January 1, 1999, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is still in
effect, another such certificate and two accurate and complete original signed
copies of Form 1001 (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to the Company and the Agent within fifteen (15) days prior
to the beginning of each subsequent taxable year of such Lender during which
this Agreement is still in effect, another such certificate and two accurate
and complete original signed copies of IRS Form 4224 (or any successor form or
forms required under the Code or the applicable regulations promulgated
thereunder).
Each such certificate shall certify pursuant to this Section 2.10(E)(vi)
-------------------
as to one of the following:
(a) that such Lender is capable of receiving payments of interest
hereunder without deduction or withholding of United States of America federal
income tax;
(b) that such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of the applicable income tax as
specified therein but is capable of recovering the full amount of any such
deduction or withholding from a source other than the Borrowers and the
Subsidiary Obligor and will not seek any such recovery from the Borrowers or
the Subsidiary Obligor; or
(c) that, as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by a
Governmental Authority after the date such Lender became a party hereto, such
Lender is not capable of receiving payments of interest hereunder without
deduction or withholding of applicable income tax as specified therein and
that it is not capable of recovering the full amount of the same from a source
other than the Borrowers and the Subsidiary Obligors.
Each Lender shall promptly furnish to the Company and the Agent such
additional documents as may be reasonably required by the Company or the Agent
to establish any exemption from or reduction of any Taxes or Other Taxes
required to be deducted or withheld and which may be obtained without undue
expense to such Lender.
A Borrower shall provide such information and take such action as a
Lender may reasonably request without undue expense to such Borrower to enable
the Lender to comply with the foregoing provisions of this subsection (vi).
---------------
(vii) None of the Borrowers shall be required to pay any additional
amounts under subsection (i) above or indemnification under subsection (iii)
-------------- ----------------
above to the extent that the obligation to pay such additional amounts or
indemnification would not have arisen but for: (a) a failure by the Lender or
Agent to comply with the provisions of subsection (vi) above; or (b) the
---------------
certifications referred to in subsection (vi) above not being true.
----------------
(viii) Each Lender and the Agent agree that if it shall become aware
that it is entitled to receive a refund or a tax credit in respect of Taxes or
Other Taxes as to which it has been indemnified by the Company or any other
Borrower pursuant to this Section 2.10(E), it shall promptly notify the
----------------
Company of the availability of such refund or tax credit and at the request of
the Company will apply for such refund or take the benefit of such tax credit;
provided, however the failure to provide such notice shall not relieve the
Company or any other Borrower of any of their Obligations hereunder. Upon
receipt of such refund or the benefit of such tax credit , the Lender or Agent
agrees to pay such refund or an amount equal to the benefit of such tax credit
to the applicable Borrower along with any interest actually received from the
taxing authority, net of all out-of-pocket expenses of such Lender or Agent
incurred with respect to such refund or tax credit.
(F) Loan Account. Each Lender shall maintain in accordance with its
-------------
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of each of the Borrowers to such Lender owing to such Lender from
time to time, including the amount of principal and interest payable paid to
such Lender from time to time hereunder.
(G) Entries Binding. The entries made in each Loan Account shall be
----------------
conclusive and binding for all purposes, absent manifest error, unless the
Company objects to information contained in the Loan Account within thirty
(30) days of the Company's receipt of such information.
2.11 Notification of Advances, Interest Rates, Prepayments and Aggregate
-------------------------------------------------------------------
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
----------------------
each applicable Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice for Revolving Loans, Conversion/Continuation Notice
with respect to Revolving Loans, and repayment notice received by it
hereunder. The Agent will notify each applicable Lender of the interest rate
applicable to each Eurodollar Loan, Korean Eurodollar Loan and Korean Won Loan
promptly upon determination of such interest rate, and the Agent will give
each applicable Lender prompt notice of each change in the Alternate Base
Rate.
2.12 Lending Installations. Each Lender may book its Loans at any
----------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrowers, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.13 Non-Receipt of Funds by the Agent. Unless the applicable Borrower
---------------------------------
or a Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (i) in the case of a Lender,
the proceeds of a Loan or (ii) in the case of a Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders for
the account of the applicable Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such Lender or
Borrower, as the case may be, has not in fact made such payment to the Agent
the recipient of such payment shall, on demand by the Agent, repay to the
Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (i) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (ii) in the case of payment by a Borrower, the
interest rate applicable to the relevant Loan.
2.14 Termination Date. This Agreement shall be effective until the
-----------------
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent
indemnity and reimbursement obligations) shall have been fully and
indefeasibly paid and satisfied, all financing arrangements among the
Borrowers and the Lenders shall have been terminated (other than under Hedging
Agreements) and all of the Letters of Credit shall have expired, been canceled
or terminated, all of the rights and remedies under this Agreement and the
other Loan Documents shall survive and the Agent shall be entitled to retain
its security interest in and to all existing and future Collateral for the
benefit of itself and the Holders of Secured Obligations.
2.15 Replacement of Certain Lenders. In the event a Lender ("AFFECTED
------------------------------
LENDER") shall have: (i) failed to fund its Revolving Credit Share of any
Advance requested by any Borrower which such Lender is obligated to fund under
the terms of this Agreement and which failure has not been cured, (ii)
requested compensation from any Borrower under Sections 2.10(E), 3.1 or 3.2 to
---------------- --- ---
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 3.3 claiming that such Lender is unable to extend
-----------
Eurodollar Loans to any Borrower for reasons not generally applicable to the
other Lenders, (iv) declined to extend the Termination Date or the expiry date
of the Aggregate Commitment with respect to the Tranche D Obligations pursuant
to Section 2.24, or (v) has invoked Section 9.2, then, in any such case, any
------------- -----------
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by any Borrower and a copy to the
Borrowers in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly executed assignment and acceptance agreements in
substantially the form of Exhibit D five (5) Business Days after the date of
---------
such demand, to one or more financial institutions that comply with the
provisions of Section 12.3(A) (and, if selected by the Borrowers is reasonably
---------------
acceptable to the Agent, and, so long as no Default shall have occurred and is
continuing, if selected by the Agent is reasonably acceptable to the Company)
which any Borrower or the Agent, as the case may be, shall have engaged for
such purpose ("REPLACEMENT LENDER"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit and its obligation to
participate in Letters of Credit hereunder) in accordance with Section 12.3.
------------
The Agent agrees, upon the occurrence of such events with respect to an
Affected Lender and upon the written request of any Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions qualified to act as a Replacement Lender. Further, with respect
to such assignment the Affected Lender shall have concurrently received, in
cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
Sections 2.10(E), 3.1, and 3.2 with respect to such Affected Lender and
--------------- --- ---
compensation payable under Section 2.10(C) in the event of any replacement of
---- ---------------
any Affected Lender under clause (ii) or clause (iii) of this Section 2.15;
----------- ------------ ------------
provided that upon such Affected Lender's replacement, such Affected Lender
------
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10(E), 3.1, 3.2, 3.4, and 9.7, as well as to any fees
---------------- --- --- --- ---
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under Section 10.8. Upon the replacement of any Affected Lender
-------------
pursuant to this Section 2.15, the provisions of Section 8.2 shall continue to
------------ -----------
apply with respect to Advances which are then outstanding with respect to
which the Affected Lender failed to fund its Revolving Credit Share and which
failure has not been cured.
2.16 Letters of Credit. (a) Upon receipt of duly executed applications
-----------------
therefor in substantially the form of Exhibit H, and such other documents,
---------
instructions and agreements as such Issuing Lender may reasonably require, and
subject to the provisions of Article IV, the Agent shall, or any other Lender
----------
in its sole discretion may, issue standby or commercial letters of credit
denominated in Dollars for the account of the Company or one of the Subsidiary
Borrowers or Subsidiary Obligors or standby letters of credit denominated in
Korean Won for the account of Purina Korea, Inc., on terms as are satisfactory
to such Issuing Lender in substantially the form of Exhibit I; provided,
--------- --------
however, that no Letter of Credit will be issued hereunder by an Issuing
--
Lender if on the date of issuance, before or after taking such Letter of
Credit into account, (i) the Dollar Amount of the Revolving Credit Obligations
at such time would exceed the Aggregate Commitments at such time or (ii) the
amount (or with respect to standby Letters of Credit denominated in Korean
Won, the Dollar Amount) of the Revolving Credit Obligations owed by any of the
Borrowers or Subsidiary Obligors pursuant to this Agreement would exceed the
corresponding amounts listed below:
Agribrands International, Inc. $ 5,000,000
Agribrands Canada, Inc. $ 6,500,000
Purina Italia S.p.A. $ 4,000,000
Purina Espana, S.A. $ 2,500,000
Purina Hungaria Animal Feed
Production & Trading Company Ltd. $ 2,000,000
Purina Korea, Inc. $15,000,000
Industrias Purina S.A. de C.V. $ 5,000,000
Purina Colombiana S.A. $ 5,000,000
Agribrands Purina do Brasil, Ltda. $ 5,000,000
Purina Philippines, Inc. $ 2,500,000
Purina de Venezuela, C.A. $ 2,500,000
and provided, further, that no Letter of Credit shall be issued which has an
-------- -------
expiration date more than one year after the date of issuance of such Letter
of Credit or an expiration date later than the date which is five (5) Business
Days immediately preceding (x) the Termination Date with respect to Letters of
Credit issued for the account of any Borrower (other than Purina Korea, Inc.)
and (y) the then effective expiry date of the Aggregate Commitment for the
Tranche D Obligations with respect to any Letter of Credit issued for the
account of any Subsidiary Obligor; and provided, further, that all commercial
-------- -------
Letters of Credit requested hereunder shall be denominated only in Dollars.
Each Letter of Credit issued for the account of any Borrower (other than
Purina Korea, Inc.) may, upon the request of the applicable Borrower, include
a provision whereby such Letter of Credit shall be renewed automatically for
additional consecutive periods of 12 months or less (but not beyond the date
that is five Business Days prior to the Termination Date) unless the Issuing
Lender notifies the beneficiary thereof at least 30 days prior to the
then-applicable expiry date that such Letter of Credit will not be renewed.
Each Letter of Credit issued for the account of any Subsidiary Obligor shall
be renewed or extended beyond the then effective expiry date of the Aggregate
Commitment for the Tranche D Obligations at the request of the applicable
Subsidiary Obligor only with the consent of all of the Lenders. Prior to
issuing any Letter of Credit, the applicable Issuing Lender shall request and
the Agent shall provide confirmation that the request for such Letter of
Credit complies with the provisions of this Section 2.16(a). If the Agent
---------------
notifies the applicable Issuing Lender that it is authorized to issue such
Letter of Credit, and the conditions described in Article IV have been
----------
satisfied, then such Issuing Lender shall issue such Letter of Credit as
requested. The applicable Issuing Lender shall give the Agent and each Lender
prompt notice of the issuance of any such Letter of Credit by it. Each
Issuing Lender shall furnish to the Agent and each Lender on the first
Business Day of each month a written report, with respect to each outstanding
Letter of Credit issued by such Issuing Lender, summarizing whether such
Letter of Credit is a standby or commercial Letter of Credit, the maximum
amount available to be drawn thereon, and the beneficiary and the issuance and
expiration dates thereof. Together with each such monthly report each
Issuing Lender shall provide the Agent a copy of each Letter of Credit issued
by such Issuing Bank during the previous month.
(b) Schedule 2.16(b), which the Company may amend at any time prior
----------------
to the Closing Date contains a schedule of certain letters of credit issued
for the account of certain Borrowers and Subsidiary Obligors prior to the
Closing Date by certain Lenders (the "EXISTING LETTERS OF CREDIT"). Subject
to the satisfaction of the conditions contained in Sections 4.1 and 4.2, from
------------ ---
and after the Closing Date the Existing Letters of Credit shall be deemed to
be Letters of Credit issued pursuant to Section 2.16(a).
----------------
2.17 Letter of Credit Participation. On the Closing Date with respect
------------------------------
to the Existing Letters of Credit, and immediately upon the issuance of each
Letter of Credit by any Issuing Lender hereunder, each Lender that has a
Commitment shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable Issuing Lender an
undivided interest and participation in and to such Letter of Credit, the
obligations of the applicable Borrower or Subsidiary Obligor in respect
thereof, and the liability of the applicable Issuing Lender thereunder
(collectively, an "L/C INTEREST") in an amount equal to the amount available
for drawing under such Letter of Credit multiplied by such Lender's Revolving
Credit Share.
The applicable Issuing Lender will notify the Agent promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit and the Agent will promptly notify each Lender that has a Commitment.
On or before the Business Day on which the applicable Issuing Lender makes
payment of each such L/C Draft or any other draw on a Letter of Credit, on
demand of the Agent received by each Lender that has a Commitment not later
than 12:00 noon (Seoul, Korea time) on the fifth (5th) Business Day after the
date of such demand with respect to Letters of Credit issued for the account
of Purina Korea, Inc., and 12:00 noon (New York time) on the third (3rd)
Business Day after the date of such demand with respect to all other Letters
of Credit, each Lender (other than the Issuing Lender) shall make payment on
such Business Day to the Agent for the account of the applicable Issuing
Lender, in immediately available funds in the applicable currency in an amount
equal to such Lender's Revolving Credit Share of the amount of such payment or
draw.
Upon the Agent's receipt of funds as a result of an Issuing Lender's
payment on an L/C Draft or any other draw on a Letter of Credit issued by an
Issuing Lender, the Agent shall promptly pay such funds to the Issuing Lender.
The obligation of each Lender that has a Commitment to pay the Agent for the
account of the applicable Issuing Lender under this Section 2.17 shall be
------------
unconditional, continuing, irrevocable and absolute. In the event that any
such Lender fails to make payment to the Agent of any amount due under this
Section 2.17, the Agent shall be entitled to receive, retain and apply against
----------
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent on behalf of the applicable Issuing Lender receives
such payment from such Lender or such obligation is otherwise fully satisfied;
provided, however, that nothing contained in this sentence shall relieve such
-------- -------
Lender of its obligation to reimburse the Agent for such amount in accordance
with this Section 2.17.
-------------
2.18 Reimbursement Obligation. Each of the Borrowers and Subsidiary
-------------------------
Obligors agrees unconditionally, irrevocably and absolutely upon receipt of
notice from the Agent or the applicable Issuing Lender to pay immediately to
the Agent, for the account of the applicable Issuing Lender or the account of
the Lenders, as the case may be, the amount of each advance which may be drawn
under or pursuant to a Letter of Credit issued for its account or an L/C Draft
related thereto (such obligation of each of the Borrowers and Subsidiary
Obligors to reimburse the Issuing Lender or the Agent for an advance made
under a Letter of Credit or L/C Draft being hereinafter referred to as a
"REIMBURSEMENT OBLIGATION" with respect to such Letter of Credit or L/C
Draft), each such payment to be made by the applicable Borrower or Subsidiary
Obligor to the Agent no later than 1:00 p.m. (New York time) or with respect
to Reimbursement Obligations owed by Purina Korea, Inc. 1:00 p.m. (Seoul time)
on the Business Day on which the applicable Issuing Lender makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit,
1:00 p.m. (New York time) or with respect to Reimbursement Obligations owed by
Purina Korea, Inc. 1:00 p.m. (Seoul time) on the date specified in a demand by
the Agent and such payment shall be made in the applicable currency in which
such Letter of Credit was issued. Any Issuing Lender may direct the Agent to
make such demand with respect to Letters of Credit issued by such Issuing
Lender. If any Borrower at any time fails to repay a Reimbursement Obligation
pursuant to this Section 2.18, such Borrower shall be deemed to have elected
------------
to borrow a Revolving Loan from the applicable Lenders, as of the date of the
Advance giving rise to the Reimbursement Obligation equal in amount to the
amount of the unpaid Reimbursement Obligation. Such Revolving Loan shall be
made as of the date of the payment giving rise to such Reimbursement
Obligation, automatically, without notice and without any requirement to
satisfy the conditions precedent otherwise applicable to an Advance of
Revolving Loans if such Borrower shall have failed to make such payment to the
Agent for the account of the applicable Issuing Lender prior to such time.
Such Revolving Loans shall constitute a Base Rate Advance, or, in the case of
standby Letters of Credit denominated in Korean Won, a Korean Won Advance, the
proceeds of which Advance shall be used to repay such Reimbursement
Obligation. If, for any reason, any Borrower or Subsidiary Obligor fails to
repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and, for any reason, the Lenders are unable to make or have no
obligation to make a Revolving Loan, then such Reimbursement Obligation shall
bear interest from and after such day, until paid in full, at the interest
rate applicable to a Base Rate Advance, or in the case of standby Letters of
Credit denominated in Korean Won, at the Korean CD Rate.
2.19 Cash Collateral. Notwithstanding anything to the contrary herein
---------------
or in any application for a Letter of Credit, after the occurrence and during
the continuance of Default, each Borrower and Subsidiary Obligor shall, upon
the Agent's demand, deliver to the Agent for the benefit of the Lenders, cash
collateral, having a value, as determined by such Lenders, equal to the
aggregate outstanding L/C Obligations of such Borrower or Subsidiary Obligor
in addition to amounts on deposit in the Cash Collateral Account. Any such
additional collateral shall be held by the Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Agent for the benefit
of the Lenders as collateral security for the Borrowers' and Subsidiary
Obligors' obligations in respect of this Agreement and each of the Letters of
Credit and L/C Drafts. Such amounts shall be applied to reimburse the Agent
or each Issuing Lender, as applicable, for drawings or payments under or
pursuant to Letters of Credit or L/C Drafts, or if no such reimbursement is
required, to payment of such of the other Obligations as the Agent shall
determine. If no Default shall be continuing, amounts remaining in any cash
collateral account (other than the Cash Collateral Account) established
pursuant to this Section 2.19 which are not to be applied to reimburse the
-------------
Agent for amounts actually paid or to be paid by the Agent in respect of a
Letter of Credit or L/C Draft, shall be promptly returned to the applicable
Borrower (after deduction of the Agent's expenses incurred in connection with
such cash collateral account).
2.20 Letter of Credit Fees. The Company agrees to pay (i) quarterly, in
---------------------
arrears, on each Payment Date to the Agent for the ratable benefit of the
Lenders having Commitments, except as set forth in Section 8.2, a letter of
-----------
credit fee ("LETTER OF CREDIT FEE") in the amount of:
(w) with respect to Letters of Credit issued for the account of the
Borrowers (other than Purina Korea, Inc.) and the Subsidiary Obligors (other
than Purina Korea, Inc.), a rate per annum equal to the Applicable Letter of
Credit Fee on the aggregate average daily outstanding amount available for
drawing under all of the Letters of Credit issued for its account;
(x) with respect to standby Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Dollars, a per annum rate equal to 3.50%
on the aggregate average daily outstanding amount available for drawing under
all standby Letters of Credit denominated in Dollars and issued for its
account;
(y) with respect to standby Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Korean Won, a per annum rate equal to
1.75% on the aggregate average daily outstanding amount available for drawing
under all of the standby Letters of Credit denominated in Korean Won and
issued for its account; and
(z) with respect to commercial Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Dollars, a per annum rate equal to 1.50%
on the aggregate average daily outstanding amount available for drawing under
all of the commercial Letters of Credit denominated in Dollars and issued for
its account; plus
----
(ii) to the Agent for the benefit of the Issuing Lenders, a fronting fee of
one-eighth of one percent (0.125%) per annum on the aggregate average daily
outstanding Dollar Amount available for drawing under all of the Letters of
Credit issued for the account of any Borrower or Subsidiary Obligor payable
quarterly, in arrears, on each Payment Date; plus
----
(iii) in each case, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Lender with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time
of invoice of such amounts.
2.21 Indemnification; Exoneration. (a) In addition to amounts payable
----------------------------
as elsewhere provided in this Agreement, each Borrower and Subsidiary Obligor
with respect to Letters of Credit issued for its account agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Lender and each
Lender from and against any and all liabilities and costs which the Agent, any
Issuing Lender or any Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit other than, in
the case of the Issuing Lender, as a result of its gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the Issuing Lender of a Letter of Credit
to honor a drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
(b) As among the Borrowers, the Subsidiary Obligors, the Lenders, the
Issuing Lenders and the Agent, the Borrowers and Subsidiary Obligors assume
all risks of the acts and omissions of, or misuse of such Letter of Credit by,
the beneficiary of any Letter of Credit. In furtherance and not in limitation
of the foregoing, subject to the provisions of the Letter of Credit
applications and Letter of Credit reimbursement agreements executed by the
applicable Borrower or Subsidiary Obligor at the time of request for any
Letter of Credit, the Issuing Lender of a Letter of Credit, the Agent and the
Lenders shall not be responsible (in the absence of gross negligence or
willful misconduct in connection therewith, as determined by the final
judgment of a court of competent jurisdiction): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance of the
Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply duly with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, or other similar form of teletransmission or otherwise; (v) for errors
in interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Lender and the
Lenders including, without limitation, any Governmental Acts. None of the
above shall affect, impair, or prevent the vesting of any of the Issuing
Lender's rights or powers under this Section 2.21.
-------------
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by an Issuing
Lender under or in connection with Letters of Credit issued on behalf of any
Borrower or Subsidiary Obligor or any related certificates shall not, in the
absence of gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, put the Issuing Lender, the
Agent or any Lender under any resulting liability to any Borrower or
Subsidiary Obligor or relieve any Borrower or Subsidiary Obligor of any of its
obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrowers or the Subsidiary Obligors hereunder, the agreements and obligations
of the Borrowers contained in this Section 2.21 shall survive the payment in
------------
full of principal and interest hereunder, the termination of the Letters of
Credit and the termination of this Agreement.
2.22 Judgment Currency. If, for the purposes of obtaining judgment in
-----------------
any court, it is necessary to convert a sum due from a Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein (the
"SPECIFIED CURRENCY") into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the Agent
could purchase the specified currency with such other currency at the Agent's
main office in New York, New York or Seoul, Korea or any other applicable
local office on the Business Day preceding that on which the final,
non-appealable judgment is given. The obligations of the applicable Borrower
in respect of any sum due to any Lender or the Agent hereunder shall,
notwithstanding any judgment in a currency other than the specified currency,
be discharged only to the extent that on the Business Day following receipt by
such Lender or Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or Agent (as the case may be) may in
accordance with normal, reasonable banking procedures purchase the specified
currency with such other currency. If the amount of the specified currency so
purchased is less than the sum originally due to such Lender or Agent, as the
case may be, in the specified currency, the applicable Borrower agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or Agent, as the
case may be, against such loss, and if the amount of the specified currency so
purchased exceeds (a) the sum originally due to any Lender or Agent, as the
case may be, in the specified currency and (b) any amounts shared with other
Lenders as a result of allocations of such excess as a disproportionate
payment to such Lender under Section 11.2, such Lender or Agent, as the case
------------
may be, agrees to remit such excess to the applicable Borrower. Without
prejudice to the survival of any of the other agreements of the Borrowers
hereunder, the agreements and obligations of the Borrowers in this Section
-------
2.22 shall survive the termination of this Agreement and the payment of all
-
other amounts owing hereunder.
2.23 Currency Disruption. Notwithstanding the satisfaction of all
--------------------
conditions referred to in Article II with respect to any Advance in Korean Won
----------
or in Dollars to Purina Korea, Inc., if, after the Closing Date, a material
adverse change in the banking market (including, without limitation, a
significant down-grading of the credit ratings of the major domestic banks in
the Republic of Korea or the sovereign debt of the Republic of Korea) occurs
or bank regulatory circumstances change or currency controls or restrictions
or other exchange regulations are imposed or other circumstances arise as a
result of which, in the reasonable opinion of the Agent or the Required
Lenders, Korean Won or Dollars in Korea are unavailable to the Lenders or are
no longer readily available or freely traded or other exchange regulations are
imposed in the Republic or Korea with the result that different types of
currency are introduced, then the Advances and standby Letters of Credit
denominated in Korean Won and the Advances in Dollars to Purina Korea, Inc.
and standby Letters of Credit denominated in Dollars for the account of Purina
Korea, Inc. shall no longer be available until such time as the Agent or the
Required Lenders determine that the disqualifying event or events no longer
exist; provided, that during the period that such Korean Won or Letters of
--------
Credit denominated in Dollars are unavailable pursuant to this Section 2.23,
------------
the Company's obligation to pay the Korean facility fee pursuant to Section
-------
2.10(C)(i) shall be suspended.
--------
2.24 Termination Date Extension. The Aggregate Commitment with respect
--------------------------
to Tranche C Obligations shall expire on the Termination Date. Within the
period beginning 120 days and ending 90 days before each anniversary of the
Closing Date, the Company may request in writing that the Termination Date be
extended for an additional year. Within the period beginning 45 days and
ending 30 days prior to such anniversary, each Lender may, in its sole
discretion, agree to such extension by giving written notice of such agreement
to the Company and the Agent (and the failure to provide such notice shall be
determined to be a decision not to extend). The Aggregate Commitment with
respect to Tranche D Obligations shall expire on the first anniversary of the
Closing Date. Within the period beginning 270 days and ending 30 days prior
to such first anniversary of the Closing Date, the Company may request in
writing that the expiry date for the Aggregate Commitment with respect to
Tranche D Obligations be extended to remain in effect for up to one year from
the then effective termination date; and thereafter within the period
beginning 270 days and ending 30 days prior to the then effective expiry date
for the Aggregate Commitment with respect to Tranche D Obligations, the
Company may request in writing that the expiry date for the Aggregate
Commitment with respect to Tranche D Obligations be extended to remain in
effect for up to one year from such then effective extension date. Within 30
days after such request, each Lender may, in its sole discretion, agree to
such extension by giving written notice of such extension to the Company and
the Agent (and the failure to provide such notice shall be deemed a decision
not to extend). The Commitment of each Lender that declines to extend with
respect to the Tranche C Obligations or the Tranche D Obligations may, at the
option of the Company, be replaced in accordance with Section 12.3 (but only
------------
to the extent a replacement Lender is then available) or the Aggregate
Commitment reduced. The Required Lenders must agree to any extension with
respect to the Termination Date or the expiry of the Aggregate Commitment with
respect to Tranche D Obligations for any such extension to become effective.
ARTICLE III: CHANGE IN CIRCUMSTANCES
------------------------------------------
3.1 Yield Protection. If any law or any governmental or
-----------------
quasi-governmental rule, regulation, policy, guideline or directive (whether
-----
or not having the force of law) adopted after the date of this Agreement and
having general applicability to all banks within the jurisdiction in which
such Lender operates (excluding, for the avoidance of doubt, the effect of and
phasing in of capital requirements or other regulations or guidelines passed
prior to the date of this Agreement), or any interpretation or application
thereof by any Governmental Authority charged with the interpretation or
application thereof, or the compliance of any Lender therewith,
(i) subjects any Lender (each reference in this Section 3.1 to a Lender
-----------
being in its capacity as a Lender or an Issuing Lender, or all of the
foregoing) or any applicable Lending Installation to any tax, duty, charge or
withholding on or from payments due from any of the Borrowers (excluding
taxation imposed by the United States of America or any Governmental Authority
of the jurisdiction under the laws of which such Lender is organized, on the
overall net income of any Lender or applicable Lending Installation), or
changes the basis of taxation of payments to any Lender in respect of its
Loans, its L/C Interests, the Letters of Credit or other amounts due it
hereunder, provided however that this clause (i) shall not apply with respect
----------
to any Taxes to which Section 2.10(E) applies, or
----------------
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation with respect to its Eurodollar Loans, Korean
Eurodollar Loans, Korean Won Loans, L/C Interests or the Letters of Credit
(other than reserves and assessments taken into account in calculating the
Eurodollar Rate or Korean Eurodollar Rate), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding
or maintaining the Eurodollar Loans, Korean Eurodollar Loans, Korean Won
Loans, the L/C Interests or the Letters of Credit or reduces any amount
received by any Lender or any applicable Lending Installation in connection
with Eurodollar Loans, Korean Eurodollar Loans, Korean Won Loans or Letters of
Credit, or requires any Lender or any applicable Lending Installation to make
any payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit, by
an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender
of making, renewing or maintaining its Loans, L/C Interests or Letters of
Credit or to reduce any amount received under this Agreement, then, within 15
days after receipt by the Company of written demand by such Lender pursuant to
Section 3.5, the Company shall pay or cause the appropriate Subsidiary to pay
------------
such Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans, L/C Interests, Letters of Credit and its
Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender (each
-------------------------------------------
reference in this Section 3.2 to a Lender being in its capacity as a Lender or
-----------
an Issuing Lender, or all of the foregoing) determines (i) the amount of
capital required or expected to be maintained by such Lender, any Lending
Installation of such Lender or any corporation controlling such Lender is
increased as a result of a "Change" (as defined below), and (ii) such increase
in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation
to make Loans hereunder, then, within 15 days after receipt by the Company of
written demand by such Lender pursuant to Section 3.5, the Company shall pay
-----------
or cause the appropriate Subsidiary to pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans, its L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "CHANGE" means (i) any change after the
date of this Agreement in the "Risk-Based Capital Guidelines" (as defined
below) excluding, for the avoidance of doubt, the effect of any phasing in of
such Risk-Based Capital Guidelines or any other capital requirements passed
prior to the date hereof, or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after
the date of this Agreement and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by
any Lender or any Lending Installation or any corporation controlling any
Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If (i) any Lender determines
-----------------------------------
that maintenance of its Eurodollar Loans, Korean Eurodollar Loans or Korean
Won Loans at a suitable Lending Installation would violate any applicable law,
rule, regulation, policy, guideline, interpretation or directive, whether or
not having the force of law, or (ii) the Agent or the Required Lenders
determine that (x) deposits of a type, currency and maturity appropriate to
match fund Eurodollar Advances, Korean Eurodollar Advances or Korean Won
Advances are not available or (y) the interest rate applicable to a Eurodollar
Advance, Korean Eurodollar Advances or Korean Won Advance is unavailable or
does not accurately reflect the cost of making or maintaining such a
Eurodollar Advance, Korean Eurodollar Advances or Korean Won Advance, then the
Agent shall suspend the availability of Eurodollar Advances, Korean Eurodollar
Advances or Korean Won Advances and, in the case of any occurrence set forth
in clause (i), require any Eurodollar Advances, Korean Eurodollar Advances or
----------
Korean Won Advances to be repaid or, at the option of the Company, converted
to Base Rate Advances denominated in Dollars or repaid at the end of the
current Interest Period or at such other time, as may be required by the
applicable law, rule, regulation, policy, guideline, interpretation or
directive.
3.4 Funding Indemnification. If (i) any payment of a Eurodollar Advance
-----------------------
or Korean Eurodollar Advance or Korean Won Advance occurs on a date which is
not the last day of the applicable Interest Period, (ii) any Loan in any
currency is converted to a Loan in any other currency on a date which is not
the last day of the applicable Interest Period, whether because of
acceleration, prepayment, illegality or otherwise, or if a Eurodollar Advance,
a Korean Eurodollar Advance or Korean Won Advance is not made or continued or
prepaid on the date specified by the applicable Borrower for any reason other
than default by the Lenders, the applicable Borrower agrees to compensate and
indemnify each Lender, on demand, for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Advance, the Korean Eurodollar Advance or Korean Won Advance.
3.5 Lender Statements; Survival of Indemnity. If reasonably possible,
----------------------------------------
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans, Korean Eurodollar Loans or Korean Won Loans to reduce
any liability of the Borrowers to such Lender under Sections 3.1 and 3.2 or to
------------ ---
avoid the unavailability of a Type of Advance under Section 3.3, so long as
-----------
such designation is not disadvantageous to such Lender in its sole
determination. Each Lender requiring compensation pursuant to Section 2.10(E)
---------------
or to this Article III shall use its reasonable efforts to notify the Company
-----------
and the Agent in writing of any Change, law, policy, rule, guideline or
directive giving rise to such demand for compensation not later than sixty
(60) days following the date upon which the responsible account officer of
such Lender knows or should have known of such Change, law, policy, rule,
guideline or directive; provided, that failure to give such notice shall not
--------
affect any obligations of the Borrowers hereunder with respect thereto;
provided, further that for each such Change, law policy, rule, guideline or
-- -------
directive giving rise to such demand, such reimbursement obligations shall be
limited to an amount equal to costs incurred sixty (60) days prior to such
notice and thereafter. Any demand for compensation pursuant to this Article
-------
III shall be in writing and shall state the amount due, if any, under Section
-- -------
3.1, 3.2 or 3.4 and shall set forth in reasonable detail the calculations upon
--- --- ---
which such Lender determined such amount. Such written demand shall be
rebuttably presumed correct for all purposes. Determination of amounts
payable under such Sections in connection with a Eurodollar Loan, Korean
Eurodollar Loan or Korean Won Loan shall be calculated as though each Lender
funded its Eurodollar Loan, Korean Eurodollar Loan or Korean Won Loan, as
applicable through the purchase of a deposit of the type, currency and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate, Korean Eurodollar Rate or Korean CD Rate, as applicable to
such Loan, whether in fact that is the case or not. The obligations of the
Borrowers under Sections 3.1, 3.2 and 3.4 shall survive payment of the
------------- --- ---
Obligations and termination of this Agreement.
ARTICLE IV: CONDITIONS PRECEDENT
-------------------------------------
4.1 Initial Advances and Letters of Credit. The Lenders shall not be
---------------------------------------
required to make the initial Loans or issue any Letters of Credit unless (i)
such initial Loans are made not later than May 29, 1998 and (ii) the Company's
Subsidiaries shall be capitalized (with contributions to capital, or, in the
Company's discretion, loans) as described in the Consolidating Financial
Forecasts for Subsidiaries dated February 25, 1998 and delivered to the Agent
on February 26, 1998 and (iii) the Borrowers and Subsidiary Obligors have
furnished to the Agent, with sufficient copies for the Lenders, all of the
documents reflected on the List of Closing Documents attached as Exhibit E to
---------
this Agreement; it being understood and agreed that the Agent will notify the
Company in writing promptly when all of the conditions precedent have been
satisfied, provided, that it is further understood and agreed that if all of
--------
the conditions precedent described in clauses (i), (ii) and (iii) above shall
----------- ---- -----
not have been satisfied on or before May 29, 1998, the Aggregate Commitment
hereunder shall be terminated as of such date (unless otherwise agreed by the
Company and all of the Lenders) and all fees otherwise payable hereunder shall
cease to accrue.
4.2 Each Advance and Letter of Credit. Except as expressly provided in
---------------------------------
Sections 2.17 with respect to the purchase of participations in Letters of
--------------
Credit, the Lenders shall not be required to make any Advance and the Issuing
---
Lender shall not be required to issue any Letter of Credit, unless on the
applicable Borrowing Date, or in the case of a Letter of Credit, the date on
which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article V are true
---------
and correct in all material respects as of such Borrowing Date, except for
representations and warranties made with reference to a specific date which
representations and warranties shall be true and correct in all material
respects as of such date.
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower requesting such Advance that the
conditions contained in Sections 4.2(i) and (ii) will have been satisfied as
--------------- ----
of the date of such Advance or the issuance of such Letter of Credit. Any
Lender may require a duly completed officer's certificate in substantially the
form of Exhibit F hereto and/or a duly completed compliance certificate in
----------
substantially the form of Exhibit C hereto as a condition to making an
----------
Advance.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
-----------------------------------------------
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and the other financial accommodations to the
Borrowers and in order to induce the Issuing Lender to issue the Letters of
Credit for the account of the Borrowers and Subsidiary Obligors, each of the
Borrowers and the Subsidiary Obligors represents and warrants as follows to
each Lender and each Agent as of the date of this Agreement and thereafter on
each date as required by Section 4.2:
------------
5.1 Organization; Powers. Each of the Borrowers and Subsidiary Obligors
--------------------
(i) is a duly organized corporation validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
to do business as a foreign company or corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing could have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement.
5.2 Authority.
---------
(A) Each of the Borrowers and each of the Subsidiary Obligors has the
requisite power and authority (i) to execute, deliver and perform each of the
Loan Documents which have been executed by it as required by this Agreement
and (ii) to file the Loan Documents which must be filed by it with any
Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Loan Documents which must be executed or filed by any of the
Borrowers or any Subsidiary Obligor which have been executed or filed as
required by this Agreement and to which any of the Borrowers or any Subsidiary
Obligor is party, and the consummation of the transactions contemplated
thereby, have been duly approved, to the extent required, by the respective
boards of managers or directors, as applicable, and, if necessary, the members
or shareholders or workers' councils of the applicable Borrower or Subsidiary
Obligor, as applicable, and such approvals have not been rescinded. No other
action or proceedings on the part of any Borrower or any Subsidiary Obligor or
other Person are necessary to consummate such transactions.
(C) Each of the Loan Documents to which any of the Borrowers or any
Subsidiary Obligor is a party has been duly executed, delivered or filed, as
the case may be, by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally), is in full force
and effect and no material term or condition thereof has been amended,
modified or waived from the terms and conditions contained in the Loan
Documents delivered to the Agent pursuant to Section 4.1 without the prior
-----------
written consent of the Required Lenders, and each of the Borrowers or each
Subsidiary Obligor has, and, to the best of such Borrower's or Subsidiary
Obligor's Knowledge, all other parties thereto have performed and complied
with all the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such parties, and no
unmatured default, default or breach of any covenant by any such party exists
thereunder.
5.3 No Conflict; Governmental Consents. The execution, delivery and
------------------------------------
performance of each of the Loan Documents to which any of the Borrowers or any
Subsidiary Obligor is a party do not and will not (i) conflict with the
documents of organization or governance of such Borrower or Subsidiary
Obligor, (ii) constitute tortious interference with any Contractual Obligation
of any Person or conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of
Law (including, without limitation, any Environmental Property Transfer Act)
or Contractual Obligation of any Borrower or any Subsidiary Obligor, or
require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect or to subject the
Agent, the Arranger, any of the Lenders or any Issuing Lender to any
liability, (iii) with respect to the Loan Documents, result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of any Borrower or any Subsidiary Obligor, other than Liens permitted
by the Loan Documents, or (iv) require any approval of the Borrower's or any
Subsidiary Obligor's members, shareholders, workers' council or other similar
constituent group except such as have been obtained. The execution, delivery
and performance of each of the Loan Documents to which any Borrower or any
Subsidiary Obligor is a party do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer
Act, except (i) filings, consents or notices which have been or, in the case
of any of the foregoing, not required prior to the Closing Date, will be made,
obtained or given, and (ii) filings, registrations and deliveries necessary to
create or perfect security interests in the Collateral.
5.4 Financial Statements. The historical and forecasted financial
---------------------
statements, including, without limitation, the Consolidating Financial
Forecasts for Subsidiaries dated February 25, 1998 and delivered to the Agent
on February 26, 1998 (the "Statements") of the Company and its Subsidiaries,
copies of which are attached hereto as Exhibit G, (i) with respect to the
---------
historical Statements, (a) were prepared in accordance with generally accepted
accounting principles consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, (b) fairly present on a
pro forma basis the consolidated financial position of the Company and its
Subsidiaries as of the date thereof and consolidated results of operations for
the period covered thereby; and (c) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and material Contingent Obligations; and (ii) with respect to the
forecasted Statements, the projections and assumptions expressed therein were
prepared in good faith and represent management's opinion based on the
information available to the Company at the time so furnished.
5.5 No Material Adverse Change. (a) Since November 30, 1997 up to the
--------------------------
Closing Date, except as disclosed in the Company's Form 10 filed on March 19,
1998 with the Commission (a copy of which has been delivered to the Agent),
there has occurred no change in the business, properties, condition (financial
or otherwise), results of operations or prospects of the Company and its
Subsidiaries taken as a whole or any other event which has had or is
reasonably likely to have a Material Adverse Effect.
(b) Since the Closing Date, there has occurred no change in the
business, properties, condition (financial or otherwise), results of
operations or prospects of the Company and its Subsidiaries taken as a whole
or any other event which has had or is reasonably likely to have a Material
Adverse Effect.
5.6 Taxes.
-----
(A) Tax Examinations. All deficiencies which have been asserted against
----------------
the Company or any of the Company's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally
settled or are being contested in good faith, and as of the Closing Date no
issue has been raised by any taxing authority in any such examination which,
by application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Company's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 6.2(D) and except as
--------------
reserved for in the Company's consolidated financial statements to the extent,
if any, required by Agreement Accounting Principles, neither the Company nor
any of the Company's Subsidiaries anticipates any material tax liability with
respect to the years which have not been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of each of the
------------------
Company and its Subsidiaries required to be filed have been timely filed, and
all taxes, assessments, fees and other governmental charges thereupon and upon
their respective property, assets, income and franchises which are shown in
such returns or reports to be due and payable have been paid except those
items which are being contested in good faith and have been reserved for in
accordance with Agreement Accounting Principles. The Company has no Knowledge
of any proposed tax assessment against the Company, or any of the Company's
other Subsidiaries that will have or is reasonably likely to have a Material
Adverse Effect.
5.7 Litigation; Loss Contingencies and Violations. Except for Permitted
---------------------------------------------
Existing Contingent Obligations and as set forth in Schedule 5.7 to this
------------
Agreement, there is no action, suit, proceeding or investigation of which the
Company has Knowledge or arbitration before or by any Governmental Authority
or private arbitrator pending or, to the Knowledge of the Company or any of
its Subsidiaries, threatened against the Company or any of its Subsidiaries or
any property of any of them (i) challenging the validity or the enforceability
of any material provision of the Loan Documents or (ii) which will have or is
reasonably likely to have a Material Adverse Effect. There is no material
loss contingency within the meaning of Agreement Accounting Principles which
has not been reflected in the consolidated financial statements of the Company
prepared and delivered pursuant to Section 6.1(A) for the fiscal period during
--------------
which such material loss contingency was incurred. Neither the Company nor
any of its Subsidiaries is (A) in violation of any applicable Requirements of
Law which violation will have or is reasonably likely to have a Material
Adverse Effect, or (B) subject to or in default with respect to any final
judgment, writ, injunction, restraining order or order of any nature, decree,
rule or regulation of any court or Governmental Authority which will have or
is reasonably likely to have a Material Adverse Effect.
5.8 Subsidiaries; Capital Stock. Schedule 5.8 to this Agreement (i)
----------------------------- ------------
contains a description as of the Closing Date of the corporate structure of
the Company, the Company's Subsidiaries and any other Person in which the
Company or any of its Subsidiaries holds an equity interest; and (ii)
accurately sets forth (A) the correct legal name, the jurisdiction of
organization or incorporation and the jurisdictions in which each Borrower and
the direct and indirect Subsidiaries of the Company is qualified to transact
business as a foreign company or corporation, (B) the authorized, issued and
outstanding shares of each class of Capital Stock of each entity referred to
above that is a corporation and the owners of such shares (both as of the
Closing Date and on a fully-diluted basis), and (C) a summary of the direct
and indirect ownership, membership, partnership, joint venture, or other
equity interests, if any, of the Company and each Subsidiary of the Company in
any Person that is not a corporation. Except as disclosed on Schedule 5.8,
------------
none of the issued and outstanding Capital Stock of the Company or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement,
and there are no warrants or options outstanding with respect to such Capital
Stock. As of the Closing Date, the outstanding Capital Stock of the Company
and each of its Subsidiaries will be duly authorized, validly issued, fully
paid and nonassessable and, with the exception of the Company, will not be
Margin Stock.
5.9 ERISA. No Benefit Plan has incurred any accumulated funding
-----
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Company nor any member of the Controlled
Group has incurred any liability to the PBGC which remains outstanding other
than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report
filed with the IRS with respect to each Benefit Plan and furnished to the
lenders is complete and accurate. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the
Company nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan. Neither the Company nor any member of the Controlled
Group has failed to make a required installment or any other required payment
under Section 412 of the Code on or before the due date for such installment
or other payment. Neither the Company nor any member of the Controlled Group
is required to provide security to a Benefit Plan under Section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in current
liability for the plan year. Neither the Company nor any of its Subsidiaries
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be qualified under Section 401(a) of the Code
as currently in effect is so qualified, and each trust related to any such
Plan is exempt from federal income tax under Section 501(a) of the Code as
currently in effect. The Company and all Subsidiaries are in compliance in
all material respects with the responsibilities, obligations and duties
imposed on them by ERISA and the Code with respect to all Plans (other than
Foreign Employee Benefit Plans and Foreign Pension Plans). Neither the
Company nor any of its Subsidiaries nor any fiduciary of any Plan has engaged
in a nonexempt prohibited transaction described in Sections 406 of ERISA or
4975 of the Code which could reasonably be expected to subject the Company to
liability individually or in the aggregate in excess of $2,500,000. Neither
the Company nor any member of the Controlled Group has taken or failed to take
any action which would constitute or result in a Termination Event, which
action or inaction could reasonably be expected to subject the Company nor any
of its Subsidiaries to liability in excess of $2,500,000. Neither the Company
nor any Subsidiary is subject to any liability under Sections 4063, 4064,
4069, 4204 or 4212(c) of ERISA and no other member of the Controlled Group is
subject to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA which could reasonably be expected to subject the Company to or any of
its Subsidiaries liability individually or in the aggregate in excess of
$2,500,000. Neither the Company nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to
any employee pursuant to any Plan or existing contract or arrangement.
5.10 Accuracy of Information. Each of (i) the Company's Form 10 filed
-----------------------
on March 19, 1998 with the Commission (a copy of which has been delivered to
the Agent), as of the date of filing of such Form 10, (ii) any registration
statement or report on Form 10-K, 10-Q and 8-K (or their equivalents) which
the Company shall have filed with the Commission as at the time of filing of
such registration or report, as applicable, and (iii) all written reports,
certificates and documents of the Company furnished by or on behalf of the
Company and any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents,
including, without limitation, the Confidential Information Memorandum
reviewed by the Company (provided that except as set forth in Section 5.4, no
-----------
representation or warranty is made with respect to the forward looking
information contained therein), in each case, as of the date furnished, do not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.
5.11 Securities Activities. Neither the Company nor any of its
----------------------
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
5.12 Material Agreements. Neither the Company nor any Subsidiary is a
-------------------
party to any agreement or instrument or subject to any charter or other
contractual or corporate restriction which will have or is reasonably likely
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received notice or has Knowledge that (i) it is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, or (ii) any condition exists which, with the giving of notice or the lapse
of time or both, would constitute a default with respect to any such
Contractual Obligation, in each case, except where such default or defaults,
if any, will not have or are not reasonably likely to have a Material Adverse
Effect.
5.13 Compliance with Laws. The Company and its Subsidiaries are in
----------------------
compliance with all Requirements of Law applicable to them and their
respective businesses, in each case where the failure to so comply
individually or in the aggregate will have or is reasonably likely to have a
Material Adverse Effect.
5.14 Assets and Properties. The Company and each of its Subsidiaries
----------------------
has good and marketable title to all of its assets and properties (tangible
and intangible, real or personal) owned by it or a valid leasehold interest in
all of its leased assets (except insofar as marketability may be limited by
any laws or regulations of any Governmental Authority affecting such assets),
and all such assets and property are free and clear of all Liens, except Liens
securing the Obligations and Liens permitted under Section 6.3(C).
---------------
Substantially all of the assets and properties owned by, leased to or used by
the Company and/or each such Subsidiary of the Company are in adequate
operating condition and repair, ordinary wear and tear excepted. Except for
Liens granted to the Agent for the benefit of the Agent and the Holders of
Secured Obligations, neither this Agreement nor any other Loan Document, nor
any transaction contemplated under any such agreement, will affect any right,
title or interest of the Company or such Subsidiary in and to any of such
assets in a manner that will have or is reasonably likely to have a Material
Adverse Effect.
5.15 Statutory Indebtedness Restrictions. Neither the Company, nor any
-----------------------------------
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or
the Investment Company Act of 1940, or any other federal, state, local or
foreign statute or regulation which limits its ability to consummate the
transactions contemplated hereby.
5.16 Post-Retirement Benefits. As of the Closing Date, the Company and
------------------------
its Subsidiaries have no expected cost of post-retirement medical and
insurance benefits payable by the Company or its Subsidiaries to its employees
and former employees, as estimated by the Company in accordance with Financial
Accounting Standards Board Statement No. 106.
5.17 Insurance. Schedule 5.17 to this Agreement accurately sets forth
--------- -------------
as of the Closing Date all insurance policies and programs currently in effect
with respect to the respective properties and assets and business of the
Company and its Subsidiaries, specifying for each such policy and program, (i)
the amount thereof, (ii) the risks insured against thereby, (iii) the name of
the insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the
annual premium with respect thereto and (vii) describes any reserves, relating
to any self-insurance program that is in effect. Such insurance policies and
programs reflect coverage that is reasonably consistent with prudent industry
practice.
5.18 Contingent Obligations. Except for Permitted Existing Contingent
----------------------
Obligations, neither the Company nor any of its Subsidiaries has any
Contingent Obligation, contingent liability, long-term lease, or synthetic
lease, not reflected in the financial statements attached hereto as Exhibit G
---------
or otherwise disclosed to the Agent and the Lenders in the other Schedules to
this Agreement, which could reasonably be expected to subject the Company nor
any of its Subsidiaries to liability individually or in the aggregate in
excess of (a) $2,500,000 with respect to payments for Contingent Purchase
Price Obligations, (b) $30,000,000 with respect to guarantees issued for the
benefit of third-parties as support for loans and advances made by such
third-parties to Subsidiaries (other than Subsidiary Borrowers and Subsidiary
Obligors) of the Company or (c) $2,500,000 for other amounts.
5.19 Restricted Junior Payments. Neither the Company nor any of its
----------------------------
Subsidiaries has directly or indirectly declared, ordered, paid or made or set
apart any sum or properties for any Restricted Junior Payment or agreed to do
so, except to the extent permitted pursuant to Section 6.3(F) of this
---------------
Agreement.
5.20 Labor Matters.
--------------
(A) There are on the Closing Date no material collective bargaining
agreements, other labor agreements or Multiemployer Plans covering any of the
employees of the Company or any of its Subsidiaries. As of the Closing Date,
no material labor disputes, strikes or walkouts affecting the operations of
the Company or any of its Subsidiaries, is pending, or, to the Company's
Knowledge, threatened, planned or contemplated.
(B) Set forth in Schedule 5.20 to this Agreement is a list, as of the
-------------
Closing Date, of all material consulting agreements, executive compensation
plans, deferred compensation agreements, employee pension plans or retirement
plans, employee profit sharing plans, employee stock purchase and stock option
plans, severance plans, group life insurance, hospitalization insurance or
other plans or arrangements of the Company and its Subsidiaries providing for
benefits for employees of the Company or its Subsidiaries.
5.21 Environmental Matters. (a) Except as disclosed on Schedule 5.21:
--------------------- -------------
(i) the operations of the Company and its Subsidiaries comply in all
material respects with all applicable Environmental, Health or Safety
Requirements of Law;
(ii) the Company and its Subsidiaries have all material permits,
licenses or other authorizations required under all applicable Environmental,
Health or Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Company, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the Company's
or any of its Subsidiaries' Knowledge, any of their respective past property
or operations, are subject to or are the subject of, any investigation known
to the Company or any of its Subsidiaries, any judicial or administrative
proceeding, order, judgment, decree, settlement or other agreement respecting:
(A) any material violation of Environmental, Health or Safety Requirements of
Law; (B) any material remedial action; or (C) any material claims or
liabilities arising from the Release or threatened Release of a Contaminant
into the environment;
(iv) there is not now, nor to the best of the Company's or any of its
Subsidiaries' Knowledge has there ever been on or in the property of the
Company or any of its Subsidiaries any material landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface impoundment or
hazardous waste storage facility of any kind, polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or
asbestos-containing material; and
(v) neither the Company nor any of its Subsidiaries has any material
Contingent Obligation or material contingent liability in connection with any
Release or threatened Release of a Contaminant into the environment.
(b) For purposes of this Section 5.21 "material" means any noncompliance
------------
or basis for liability which could reasonably be likely to subject the Company
to liability individually in excess of $2,500,000 or in the aggregate in
excess of $5,000,000.
5.22 Foreign Employee Benefit Matters. (a) Each Foreign Employee
-----------------------------------
Benefit Plan is in compliance in all respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such Plan, except for any non-compliance the consequences of
which, in the aggregate, would not result in a material obligation to pay
money; (b) the aggregate of the accumulated benefit obligations under all
Foreign Pension Plans does not exceed to any material extent the current fair
market value of the assets held in the trusts or similar funding vehicles for
such Plans or reasonable reserves have been established in accordance with
prudent business practices or as required by Agreement Accounting Principles
with respect to any shortfall; (c) with respect to any Foreign Employee
Benefit Plan maintained or contributed to by the Company or any Subsidiary or
any member of its Controlled Group (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained; and (d) there are no actions,
suits or claims (other than routine claims for benefits) pending or, to the
Knowledge of the Company and its Subsidiaries, threatened against the Company
or any Subsidiary of it or any ERISA Affiliate with respect to any Foreign
Employee Benefit Plan, except to the extent the consequences of which, in the
aggregate, would not result in a material obligation to pay money.
ARTICLE VI: COVENANTS
-------------------------
Each of the Borrowers covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than contingent indemnity and reimbursement obligations),
unless the Required Lenders shall otherwise give prior written consent:
6.1 Reporting. The Borrowers shall:
---------
(A) Financial Reporting. Furnish to the Agent (which will promptly
--------------------
furnish copies of the following to the Lenders):
(i) Quarterly Reports. As soon as practicable, and in any event within
-----------------
forty-five (45) days after the end of the first three fiscal quarters in each
fiscal year beginning with the fiscal quarter ending February 28, 1998, the
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such period, the related consolidated and
consolidating statements of income and the related consolidated statement of
stockholders' equity and cash flow of the Company and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, certified by the chief
financial officer of the Company on behalf of the Company as fairly presenting
in all material respects the consolidated and, as applicable, consolidating
financial position of the Company and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in accordance with Agreement Accounting Principles, subject to
normal year end adjustments.
(ii) Annual Reports. As soon as practicable, and in any event within
---------------
ninety (90) days after the end of each fiscal year, (a) the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as at the end
of such fiscal year and the related consolidated and consolidating statements
of income and the related consolidated statement of stockholders' equity and
cash flow of the Company and its Subsidiaries for such fiscal year, and, in
comparative form the corresponding figures for the previous fiscal year, (b) a
schedule from the Company setting forth for each item in clause (a) hereof,
----------
the corresponding figures from the xxxxxxx-dated financial budget for the
current fiscal year delivered pursuant to Section 6.1(A)(iv), and (c) an audit
------------------
report on the items (other than the consolidating financial statements) listed
in clause (a) hereof of independent certified public accountants of recognized
----------
national standing, which audit report shall be unqualified and shall state
that such financial statements fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with Agreement Accounting Principles and that
the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards. The deliveries made pursuant to this clause (ii) shall be
-----------
accompanied by a certificate of such accountants that, in the course of their
examination necessary for their certification of the foregoing (such
examination utilizing only their customary audit procedures without any
necessity of conducting extra procedures for purposes of this certificates),
they have obtained no knowledge of such Default or Unmatured Default under
Section 6.4, or if, in the opinion of such accountants, any Default or
---------
Unmatured Default shall exist, stating the nature and status thereof. Such
----
deliveries shall also, not later than one hundred twenty days after the end of
such fiscal year, be accompanied by the management recommendation letter from
such accountants delivered in connection with such financial statements (x)
confirming that although no separate internal controls audit was conducted, in
the process of their regular audit, the internal systems and controls were
reviewed on a limited basis, and (y) listing any recommendations made to the
Company with respect to its internal systems and controls. If the Required
Lenders are not satisfied with the management recommendation letter's
treatment of the Company's internal systems and controls, they shall have the
right to require the Company to direct independent certified public
accountants of recognized national standing to prepare an audit report on the
internal systems and controls of the Company and its Subsidiaries.
(iii) Officer's Certificate. Together with each delivery of any
----------------------
financial statement pursuant to clauses (i) and (ii) of this Section 6.1(A),
----------- ---- --------------
(a) an Officer's Certificate of the Company, substantially in the form of
Exhibit F attached hereto and made a part hereof, stating that no Default or
------
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof and (b) a Compliance Certificate,
substantially in the form of Exhibit C attached hereto and made a part hereof,
---------
signed by the Company's chief financial officer, setting forth the Company's
calculations for the period then ended for Section 2.2(B) and for Section
-------------- -------
2.4(b) and which demonstrate compliance, when applicable, with the provisions
--
of Section 6.4, and which calculate the EBITDA Contribution Ratio for purposes
-----------
of determining the Applicable Eurodollar Margins, the Applicable Base Rate
Margins, the Applicable Letter of Credit Fee, and the Applicable Facility Fee.
(iv) Budgets. As soon as practicable and in any event not later than
-------
thirty (30) days following the beginning of each fiscal year beginning with
the fiscal year beginning September 1, 1998, a copy of the budget (including a
budgeted balance sheet and income statement) of the Company for the upcoming
fiscal year prepared in such detail as shall be reasonably satisfactory to the
Agent.
(B) Notice of Default. Promptly upon any of the chief executive
-------------------
officer, chief operating officer, or chief financial officer of the Company
obtaining Knowledge (i) of any condition or event which constitutes a Default
or Unmatured Default, or becoming aware that any Lender or Agent has given any
written notice with respect to a claimed Default or Unmatured Default under
this Agreement, or (ii) that any Person has given any written notice to the
Company or any Subsidiary of the Company or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 7.1(e), deliver to the Agent and the Lenders an Officer's Certificate
---------------
specifying (a) the nature and period of existence of any such claimed default,
Default, Unmatured Default, condition or event, (b) the notice given or action
taken by such Person in connection therewith, and (c) what action the Company
has taken, is taking and proposes to take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Company obtaining Knowledge of the
--------
institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries not previously disclosed pursuant to Section 5.7, which action,
-----------
suit, proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances
which expose, in the Company's reasonable judgment, the Company or any of its
Subsidiaries to liability in an amount aggregating $2,500,000 or more, give
written notice thereof to the Agent and the Lenders and provide such other
information as may be reasonably available to enable each Lender and the Agent
and its counsel to evaluate such matters; and (ii) in addition to the
requirements set forth in clause (i) of this Section 6.1(C), upon request of
---------- --------------
the Agent or the Required Lenders, promptly give written notice of the status
of any action, suit, proceeding, governmental investigation or arbitration
disclosed on Schedule 5.7 or covered by a report delivered pursuant to clause
------------ ------
(i) above and provide such other information as may be reasonably available to
---
it that would not result in loss of any attorney-client privilege by
disclosure to the Lenders to enable each Lender and the Agent and its counsel
to evaluate such matters.
(D) Insurance. As soon as practicable and in any event within one
---------
hundred twenty (120) days of the end of each fiscal year commencing with the
fiscal year ending August 31, 1998 deliver to the Agent and the Lenders (i) a
report in form as attached as Schedule 5.17 or otherwise in form and substance
-------------
reasonably satisfactory to the Agent outlining all material insurance coverage
maintained as of the date of such report by the Company and its Subsidiaries
and the duration of such coverage and (ii) an insurance broker's statement
that all premiums with respect to such coverage have been paid when due.
(E) ERISA Notices. Deliver or cause to be delivered to the Agent and
--------------
the Lenders, at the Company's expense, the following information and notices
as soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Company obtains
Knowledge that a Termination Event has occurred which could reasonably be
expected to subject the Company to or any of its Subsidiaries liability
individually or in the aggregate in excess of $2,500,000, a written statement
of the chief financial officer of the Company describing such Termination
Event and the action, if any, which the Company has taken, is taking or
proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten
(10) Business Days after any member of the Controlled Group obtains Knowledge
that a Termination Event has occurred which could reasonably be expected to
subject the Company to or any of its Subsidiaries liability individually or in
the aggregate in excess of $2,500,000, a written statement of the chief
financial officer of the Company describing such Termination Event and the
action, if any, which the member of the Controlled Group has taken, is taking
or proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Company or any of its
Subsidiaries obtains Knowledge that a prohibited transaction (defined in
Sections 406 of ERISA and Section 4975 of the Code) has occurred, a statement
of the chief financial officer of the Company describing such transaction and
the action which the Company or such Subsidiary has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days after any material increase in the
benefits of any existing Plan or the establishment of any new Benefit Plan or
the commencement of, or obligation to commence, contributions to any Benefit
Plan or Multiemployer Plan to which the Company or any member of the
Controlled Group was not previously contributing, notification of such
increase, establishment, commencement or obligation to commence and the amount
of such contributions;
(iv) within ten (10) Business Days after the Company or any of its
Subsidiaries receives notice of any unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Code,
copies of each such letter;
(v) within thirty (30) Business Days after the establishment of any
Foreign Employee Benefit Plan or the commencement of, or obligation to
commence, contributions to any Foreign Employee Benefit Plan to which the
Company or any Subsidiary was not previously contributing which, in any case,
would materially increase the Company's employment costs, notification of such
establishment, commencement or obligation to commence and the amount of such
contributions;
(vi) within ten (10) Business Days after the filing thereof with the
IRS, a copy of each funding waiver request filed with respect to any Benefit
Plan and all communications received by the Company or a member of the
Controlled Group with respect to such request;
(vii) within ten (10) Business Days after receipt by the Company or any
member of the Controlled Group of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of
each such notice;
(viii) within ten (10) Business Days after receipt by the Company or any
member of the Controlled Group of a notice from a Multiemployer Plan regarding
the imposition of withdrawal liability, copies of each such notice;
(ix) within ten (10) Business Days after the Company or any member of
the Controlled Group fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before
the due date for such installment or payment, a notification of such failure;
and
(x) within ten (10) Business Days after the Company or any member of the
Controlled Group knows or has reason to know that (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
For purposes of this Section 6.1(E), the Company, any of its Subsidiaries and
--------------
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.
(F) Labor Matters. Notify the Agent and the Lenders in writing,
--------------
promptly upon the Company's or any of its Subsidiaries' learning thereof, of
(i) any labor dispute to which the Company or any of its Subsidiaries may
become a party, including, without limitation, any strikes, lockouts or other
disputes relating to such Persons' plants and other facilities and (ii) any
Worker Adjustment and Retraining Notification Act liability incurred with
respect to the closing of any plant or other facility of the Company or any of
its Subsidiaries where, in the case of (i) or (ii), such is reasonably likely
to have a Material Adverse Effect.
(G) Other Indebtedness. Deliver to the Agent and the Lenders (i) a copy
------------------
of each regular report, notice or communication regarding potential or actual
defaults (including any accompanying officers' certificate) delivered by or on
behalf of the Company or any of its Subsidiaries to the holders of
Indebtedness for money borrowed with respect to Indebtedness the outstanding
principal balance of which is at least $2,500,000 pursuant to the terms of the
agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered
to such holders, and (ii) a copy of each notice or other communication
received by the Company or any of its Subsidiaries from the holders of
Indebtedness for money borrowed with respect to Indebtedness the outstanding
principal balance of which is at least $2,500,000 pursuant to the terms of
such Indebtedness, such delivery to be made promptly after such notice or
other communication is received by the Company or the applicable Subsidiary.
(H) Other Reports. Deliver or cause to be delivered to the Agent and
--------------
the Lenders copies of all 10-Ks, 10-Qs and 8-Ks filed with the Commission by
the Company.
(I) Environmental Notices. Deliver to the Agent and the Lenders as soon
---------------------
as possible and in any event within ten (10) days after receipt by the Company
or any of its Subsidiaries, a copy of (i) any notice or claim to the effect
that the Company or any of its Subsidiaries is or may be liable to any Person
as a result of the Release by the Company, any of its Subsidiaries, or any
other Person of any Contaminant into the environment, and (ii) any notice
alleging any violation of any Environmental, Health or Safety Requirements of
Law by the Company or any of its Subsidiaries if, in either case, such notice
or claim relates to an event which could reasonably be expected to subject the
Company or any of its Subsidiaries to liability individually or in the
aggregate in excess of $2,500,000.
(J) Other Information. Within a reasonable period of time following
------------------
receipt of a request therefor from the Agent, prepare and deliver to the Agent
and the Lenders such other information with respect to the Company, any of its
Subsidiaries, or the Collateral, including, without limitation, schedules
identifying and describing the Collateral and any dispositions thereof, as
from time to time may be reasonably requested by the Agent or any Lender.
6.2 Affirmative Covenants.
----------------------
(A) Existence, Etc. Except as provided by Section 6.3(B)(iv) with
---------------- ------------------
respect to the sale, dissolution or liquidation of certain Subsidiaries of the
Company, the Company shall, and shall cause each of its Subsidiaries to, at
all times maintain its existence and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises
material to its businesses except that any Subsidiary of the Company may merge
with or liquidate into the Company or any other Subsidiary of the Company;
provided that the surviving entity expressly assumes any liabilities, if any,
-----
of either of such Subsidiaries with respect to the Obligations pursuant to an
assumption agreement reasonably satisfactory to the Agent; provided further
-------- -------
that the Consolidated Net Worth of the surviving corporation is not less than
the Consolidated Net Worth of the Subsidiary with any liability with respect
to the Obligations immediately prior to such merger; and provided further, if
-------- -------
the corporation being merged out of existence or liquidated is a party to a
Pledge Agreement the surviving entity shall execute and deliver such
documents, instruments, agreements and opinions in connection therewith as
shall be required by the Agent in connection with any such Pledge Agreement
(and all accrued interest in connection therewith) of such entity shall be
repaid in full as of the date of such liquidation or merger.
(B) Corporate Powers; Conduct of Business. Except as provided by
-----------------------------------------
Section 6.3(B)(iv) with respect to the sale, dissolution or liquidation of
-------------
certain Subsidiaries of the Company, the Company (x) shall, and shall cause
each of its Subsidiaries to qualify and remain qualified to do business in
each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or is reasonably
likely to have a Material Adverse Effect and (y) will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.
(C) Compliance with Laws, Etc. The Company shall, and shall cause its
--------------------------
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless failure to
comply or obtain is not reasonably anticipated to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Company shall
----------------------------------------------
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or
assets or in respect of any of its franchises, business, income or property
before any penalty or interest accrues thereon, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 6.3(C)) upon any of
--------------
the Company's or such Subsidiary's property or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided, however,
-------- -------
that no such taxes, assessments and governmental charges referred to in clause
------
(i) above or claims referred to in clause (ii) above (and interest, penalties
--- -----------
or fines relating thereto) need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefor.
The Company will not permit any of its Subsidiaries to file or consent to the
filing of any consolidated income tax return with any Person other than the
Company or any of its Subsidiaries.
(E) Insurance. The Company shall maintain for itself and its
---------
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full
force and effect the insurance policies and programs listed on Schedule 5.17
-------------
to this Agreement or substantially similar policies and programs or other
policies and programs as reflect coverage that is reasonably consistent with
prudent industry practice.
(F) Inspection of Property; Books and Records; Discussions. The Company
------------------------------------------------------
shall permit, and cause each of the Subsidiary Borrowers and Subsidiary
Obligors to permit, any authorized representative(s) designated by the Agent
(together with an authorized representative of any Lender that may request to
accompany such authorized representative of the Agent) to visit and inspect
any of the properties of the Company or any of the Subsidiary Borrowers and
Subsidiary Obligors, to examine, audit, check and make copies of their
respective financial and accounting records, books, journals, orders, receipts
and any non-privileged correspondence and other data relating to their
respective businesses or the transactions contemplated hereby (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested; provided, however, that the Borrowers' and
-------- -------
Subsidiary Obligors' obligation to reimburse the Agent for reasonable costs
and expenses incurred in connection with such inspections shall be limited to
no more than one (1) inspection during any twelve-month period if such
inspections are conducted at a time when no Default or Unmatured Default shall
have occurred and is continuing. So long as no Default or Unmatured Default
shall have occurred and is continuing, and to the extent reasonably
practicable, any such inspection with respect to a Borrower or Subsidiary
Obligor will be coordinated with an Authorized Officer of the Company. The
Company shall keep and maintain, and cause each of the Company's Subsidiaries
to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with Agreement Accounting Principles
shall be made of all dealings and transactions in relation to their respective
businesses and activities, including, without limitation, transactions and
other dealings with respect to the Collateral. If a Default has occurred and
is continuing, the Company, upon the Agent's request, shall turn over copies
of any such records to the Agent or its representatives.
(G) ERISA Compliance. The Company shall, and shall cause each of its
-----------------
domestic Subsidiaries to, establish, maintain and operate all Plans (other
than Foreign Employee Benefit Plans and Foreign Pension Plans) to comply in
all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Company shall cause all property used
-----------------------
or useful in the conduct of its business or the business of any Subsidiary to
be maintained and kept in adequate condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly conducted at all times; provided,
--------
however, that nothing in this Section 6.2(H) shall prevent the Company from
------ --------------
discontinuing the operation or maintenance of any of such property if such
-
discontinuance is, in the judgment of the Company, desirable in the conduct of
-
its business or the business of any Subsidiary and not disadvantageous in any
respect to the Agent or the Lenders.
(I) Environmental Compliance. The Company and its Subsidiaries shall
-------------------------
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Company and its Subsidiaries to liability, individually in excess of
$2,500,000, or in the aggregate in excess of $5,000,000.
(J) Use of Proceeds. The Borrower shall use the proceeds of the Loans
---------------
to pay transaction costs in connection with the transactions evidenced by the
Loan Documents, to refinance existing indebtedness of the Company and its
Subsidiaries and to provide funds for the working capital needs and other
general corporate purposes of the Borrowers and their Subsidiaries. The
Company will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Loans to purchase or carry any "Margin Stock" or to make any
Acquisition, other than any Permitted Acquisition pursuant to Section 6.3(G).
--------------
(K) Foreign Employee Benefit Compliance. The Company shall, and shall
-----------------------------------
cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain
and operate all Foreign Employee Benefit Plans to comply in all material
respects with all laws, regulations and rules applicable thereto and the
respective requirements of the governing documents for such Plans, except for
failures to comply which, in the aggregate, would not result in a material
obligation to pay money.
6.3 Negative Covenants.
-------------------
(A) Indebtedness. Neither the Company nor any of its Subsidiaries shall
------------
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(a) the Obligations;
(b) Permitted Existing Indebtedness, and any extension, renewal,
refunding or refinancing thereof, provided that any such extension, renewal,
--------
refunding or refinancing is in an aggregate principal amount not greater than
the principal amount of and interest, fees and expenses accrued on, such
Permitted Existing Indebtedness outstanding at the time thereof and is on
terms (including, without limitation, maturity, amortization, interest rate,
premiums, fees, covenants, subordination, events of default, and remedies) not
materially less favorable to the obligor or adverse to the Lenders than the
terms of such Permitted Existing Indebtedness;
(c) Indebtedness permitted pursuant to Section 6.3(H) arising from
--------------
intercompany loans from (1) the Company, or any other Subsidiary of the
Company to any Borrower, (2) any Subsidiary that is not a Borrower to any
other Subsidiary or (3) any Borrower to any Subsidiary of the Company which is
not a Borrower; provided, that all such Indebtedness is subordinated to the
--------
Obligations on terms provided in this Agreement;
(d) Indebtedness in respect of Hedging Agreements permitted under
Section 6.3(P);
---------
(e) Indebtedness permitted by Sections 6.4(B) and 6.4(E)(2);
---------------- ---------
(f) Indebtedness constituting Contingent Obligations permitted by
Section 6.3(E);
---------
(g) unsecured Indebtedness and other liabilities incurred in the
ordinary course of business and consistent with past practice, but not
incurred through the borrowing of money or the obtaining of credit (other than
customary trade terms).
(B) Sales of Assets. Neither the Company nor any of its Subsidiaries
----------------
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) sales of certain assets of Purina Colombiana S.A., Purina de Venezuela,
C.A., Purina de Guatemala, S.A., and Purina Peru S.A., in each case as
described in that certain Agreement and Plan of Reorganization, dated as of
April 1, 1998, by and among the Company, Xxxxxxx Purina Company, and Xxxxxxx
Purina International Holding Company, Inc., as in effect on the Closing Date
and without giving effect to any amendment or modification thereto;
(iii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than the Capital Stock of any Subsidiary
of the Company) if such transaction (a) is of assets no longer required in the
ordinary course of business, (b) is for not less than fair market value, and
(c) when combined with all such other sales, assignments, transfers,
conveyances or other dispositions (i) during any fiscal year represents the
disposition of not greater than ten percent (10%) of the Company's
Consolidated Net Worth calculated as of the date of such sale, assignment,
transfer, conveyance or other disposition and after giving effect to such
transaction; and
(iv) (x) disposition of assets, dissolution, liquidation or sales of
shares of Subsidiaries (other than stock or assets of Subsidiary Borrowers or
Subsidiary Obligors) resulting from a determination by the Company to
discontinue its operations in a particular jurisdiction and (y) with the prior
written consent of all of the Lenders, the dissolution, liquidation or sale of
shares of any Subsidiary Borrower or Subsidiary Obligor and only so long as
any such sale or other disposition is for all cash consideration.
(C) Liens. Neither the Company nor any of its Subsidiaries shall
-----
directly or indirectly create, incur, assume, permit or suffer to exist any
Lien on or with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) Liens securing financing under governmental or other special programs
which are more advantageous to the Company than the financing available under
this Agreement, to the extent such Liens are required in order to participate
in such programs, and any renewals or extensions of any such Liens;
(v) other Liens securing indebtedness not exceeding, in the aggregate, ten
percent (10%) of the Company's Consolidated Net Worth at the time of
incurrence thereof; and
(vi) pledges of assets of entities other than Borrowers and Subsidiary
Obligors to secure Indebtedness of Subsidiaries which are neither Borrowers
nor Subsidiary Obligors.
(D) Investments. Except for Permitted Existing Investments in an amount
-----------
not greater than the amount thereof on the Closing Date, neither the Company
nor any of its Subsidiaries shall directly or indirectly make or own any
Investment except:
(i) Investments constituting Permitted Acquisitions permitted by
Section 6.3(G);
-----------
(ii) Investments in Cash Equivalents;
(iii) Investments consisting of Indebtedness of employees to the
extent such Indebtedness does not exceed in the aggregate $1,000,000 in any
fiscal year;
(iv) Investments in a particular jurisdiction other than the United
States of locally generated funds;
(v) Investments in Affiliates permitted by Section 6.3(H);
---------------
(vi) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(vii) Investments consisting of deposit accounts maintained by the
Company and its Subsidiaries in connection with its cash management system in
the ordinary course of business and consistent with past practice;
(viii) Investments consisting of compensating balances maintained by
Purina Korea, Inc. in Korea as required by domestic financial institutions as
support for loans and advances made by such financial institutions to Purina
Korea, Inc.; provided, such amounts do not in the aggregate exceed $8,000,000
--------
at any time; and
(ix) Investments constituting Contingent Obligations permitted by
Section 6.3(E) or Restricted Junior Payments permitted by Section 6.3(F); and
------------ --------------
(x) Investments with any other Persons which do not exceed in the
aggregate ten percent (10%) of the Consolidated Net Worth of the Company
(calculated as of the date of each such Investment).
(E) Contingent Obligations. Neither the Company nor any of its
-----------------------
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, material contingent liability, long-term
lease, synthetic lease or Contractual Obligation, not reflected in the
financial statements attached hereto as Exhibit G, except: (i) as set forth on
---------
Schedule 1.1.1, (ii) recourse obligations issued for the benefit of
---------------
customers, employees, vendors or other trading partners in the ordinary course
---------
of its business, (iii) guarantees to officers of the Company and its
subsidiaries of obligations of such officers with respect to the business of
the Company and its subsidiaries, (iv) guarantees incurred in connection with
or resulting from Permitted Acquisitions or other Investments not otherwise
prohibited under this Agreement; provided, that to the extent specified in
--------
this Agreement, such guarantees referred to in this clause (iv) shall be
-----------
treated as Indebtedness for purposes of this Agreement, and (v) guarantees
issued by the Company for the benefit of third-parties as support for loans
and advances made by such third-parties to (x) Subsidiary Borrowers or
Subsidiary Obligors and (y) Subsidiaries of the Company (other than Subsidiary
Borrowers and Subsidiary Obligors) in an amount, contingent or otherwise, not
to exceed $30,000,000 at any time.
(F) Restricted Junior Payments. Neither the Company nor any of its
----------------------------
Subsidiaries shall declare or make any Restricted Junior Payment, except:
(i) dividends payable by the Company in compliance with the corporation
law of the State of Missouri; and
(ii) Restricted Junior Payments made by any Subsidiary of the Company to
the Company or any other Subsidiary of the Company except that no Subsidiary
shall make any Investment in (x) any Affiliate (other than the Company) if as
a result thereof such Investments would at any time exceed in the aggregate
forty percent (40%) of Consolidated Net Worth of the Company or (y) any
Affiliate (other than a Borrower or Subsidiary Obligor) if as a result thereof
such Investments would at any time exceed in the aggregate fifteen percent
(15%) of the Consolidated Net Worth of the Company;
provided, however, that the Restricted Junior Payments described in clause (i)
-------- ------- ----------
and clause (ii) shall not be permitted if either a Default or an Unmatured
------------
Default shall have occurred and be continuing at the date of declaration or
payment thereof or would result therefrom.
(G) Conduct of Business; Subsidiaries; Acquisitions. Neither the
---------------------------------------------------
Company nor any of its Subsidiaries shall engage in any business, or acquire
any other business, other than the businesses in, or reasonably related to,
the lines of business carried on by them on the date hereof. The Company
shall not and shall not permit any of its Subsidiaries to create, capitalize
or acquire any Subsidiary after the date hereof or enter into any transaction
or series of transactions in which it acquires all or any significant portion
of the assets of another Person, or such Person merges with or liquidates into
the Company or any of its Subsidiaries, unless (x) such transaction is in
connection with the Company's acquisition from Xxxxxxx Purina Company and/or
Xxxxxxx Purina International Holding Company of the Capital Stock of each of
the Company's Subsidiaries on or about the Closing Date or (y) such
transaction meets the following requirements (each such transaction
constituting a "PERMITTED ACQUISITION"):
(1) no Default or Unmatured Default shall have occurred and be
continuing or would result from such transaction or transactions or the
incurrence of any Indebtedness in connection therewith;
(2) to the extent any such transaction, together with all such other
transactions, exceeds in the aggregate $5,000,000 during any fiscal year,
prior to each such transaction, the Company shall deliver to the Agent and the
Lenders a certificate from one of the Company's Authorized Officers
demonstrating to the satisfaction of the Agent and the Required Lenders that
after giving effect to such transaction or transactions and the incurrence of
any Indebtedness permitted by Section 6.3(A) in connection therewith on a pro
--------------
forma basis as if such acquisition, merger or liquidation and such incurrence
of Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Company's most recently completed fiscal
quarter, the Company would have been in compliance with all provisions of
Section 6.4 at all times during such twelve-month period and not otherwise in
--------
Default;
(3) the transaction is consummated pursuant to a negotiated agreement on
a non-hostile basis and involves the purchase of, or entering into of, a
business line similar, or reasonably related, to that of the Company's and its
Subsidiaries as of the Closing Date;
(4) in the case of any merger permitted under this Agreement, the
surviving entity expressly assumes any liabilities, if any, either of the
Company or Subsidiary party thereto, as applicable, with respect to the
Obligations pursuant to an assumption agreement reasonably satisfactory to the
Agent; and
(5) the aggregate amount of Investments (including assumed liabilities)
in connection with all such transactions during the term of this Agreement
shall not exceed:
(A) for any single transaction or series of related transactions,
$20,000,000; and
(B) for all transactions, $80,000,000 (excluding Investments actually
made up to $4,000,000 in the aggregate in connection with the Company's
development of production facilities in Shanggao, China).
(H) Transactions with Shareholders and Affiliates. Except as set forth
---------------------------------------------
on Schedule 6.3(H), neither the Company nor any of its Subsidiaries shall
----------------
directly or indirectly (i) enter into or permit to exist any transaction
-
(including, without limitation, the purchase, sale, lease or exchange of any
-
property or the rendering of any service) with any holder or holders of any
Capital Stock or other Equity Interests in the Company, or with any Affiliate
of the Company, on terms that are less favorable to the Company or its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate; or (ii) enter into or permit to exist any such non-arm's length
transaction, including without limitation loans and advances to or other
Investments in (x) any Affiliate (other than the Company) if as a result
thereof such Investments would at any time exceed in the aggregate forty
percent (40%) of Consolidated Net Worth of the Company or (y) any Affiliate
(other than a Borrower or Subsidiary Obligor) if as a result thereof such
Investments would at any time exceed in the aggregate fifteen percent (15%) of
the Consolidated Net Worth of the Company.
(I) Sales and Leasebacks. Neither the Company nor any of its
----------------------
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an Operating Lease, a synthetic
lease or a Capitalized Lease, of any property (whether real or personal or
mixed) (i) which it or one of its Subsidiaries sold or transferred or is to
sell or transfer to any other Person, or (ii) which it or one of its
Subsidiaries intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by it or one of its
Subsidiaries to any other Person in connection with such lease, unless in
either case the sale involved is not prohibited under Section 6.3(B) and the
--------------
lease involved is not prohibited under Section 6.3(A).
---------------
(J) Margin Regulations. Neither the Borrower nor any of its
-------------------
Subsidiaries, shall use all or any portion of the proceeds of any credit
-
extended under this Agreement to purchase or carry Margin Stock.
(K) ERISA. The Company shall not (i) engage, or permit any of its
-----
Subsidiaries to engage, in any prohibited transaction described in Sections
406 of ERISA or 4975 of the Code for which a statutory or class exemption is
not available or a private exemption has not been previously obtained from the
DOL;
(ii) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to
any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to pay timely
required contributions or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate, any
Benefit Plan which would result in any liability of the Company or any
Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer Plan
which the Company or any Controlled Group member may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment; or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that the
Company or any Controlled group member is required to provide security to such
Plan under Section 401(a)(29) of the Code.
(L) Issuance of Equity Interests. Neither the Company nor any of its
-----------------------------
Subsidiaries shall issue any ownership, membership or other equity interests
after the date of this Agreement if such issuance causes a Change of Control
to occur.
(M) Organizational Documents. Neither the Company nor any of its
-------------------------
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective organizational documents as in effect on
the date hereof in any manner adverse to the interests of the Lenders without
the prior written consent of the Required Lenders.
(N) Other Indebtedness. Neither the Company nor any of its Subsidiaries
------------------
shall amend, supplement or otherwise modify the terms of any Indebtedness owed
by a Borrower or Subsidiary of the Company that would be materially adverse to
the Lenders, including, without limitation, with respect to subordination.
(O) Fiscal Year. The Company shall not change its fiscal year for
------------
accounting or tax purposes from a period consisting of the 12-month period
ending on August 31 of each calendar year.
(P) Hedging Obligations. The Company shall not and shall not permit any
-------------------
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements other than hedging
or other derivative transactions (i) relating to the acquisition of raw
materials or the sale of products of the Company which are intended to protect
the Company against the risks of changes in market prices or (ii) relating to
currencies in which the Company receives revenues or incurs expenses which are
intended to protect the Company against the risks of changes in the exchange
rates relating to such currencies or (iii) relating to the interest rates on
its outstanding or proposed Indebtedness which are intended to protect the
Company against the risks of changes in the interest rates relating to such
borrowing (such hedging agreements collectively are sometimes referred to
herein as "HEDGING AGREEMENTS"). In the event a Lender elects to enter into
any Hedging Agreements with the Company or any of its Subsidiaries, the
obligations of the Company or such Subsidiary with respect to such Hedging
Agreements shall be Secured Obligations secured by the Collateral.
(Q) Subsidiary Covenants. The Company will not, and will not permit any
--------------------
Subsidiary Borrower or Subsidiary Obligor to, create or otherwise cause to
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary Borrower or Subsidiary Obligor to (i) pay dividends
or make any other distribution on its stock, or make any other Restricted
Junior Payment, (ii) pay any Indebtedness or other Obligation owed to the
Company or any other Subsidiary, (iii) make loans or advances or other
Investments in the Company or any other Subsidiary, or (iv) sell, transfer or
otherwise convey any of its property to the Company or any other Subsidiary.
6.4 Financial Covenants. The Company shall comply with the following:
-------------------
(A) Interest Coverage Ratio. The Company shall maintain a ratio
-------------------------
("INTEREST COVERAGE RATIO") of (i) EBITDA to (ii) Cash Interest Expense of at
least 2.50 to 1.00 as of the end of each fiscal quarter commencing with the
fiscal quarter ending August 31, 1998 through the Termination Date.
In each case the Interest Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
----- -------
Interest Coverage Ratio shall be calculated using EBITDA and Cash Interest
Expense for the period commencing on April 1, 1998 through August 31, 1998,
(b) for the fiscal quarter ending November 30, 1998, the Interest Coverage
Ratio shall be calculated using EBITDA and Cash Interest Expense for the
period commencing on April 1, 1998 through November 30, 1998, and (c) for the
fiscal quarter ending February 28, 1999, the Interest Coverage Ratio shall be
calculated using EBITDA and Cash Interest Expense for the period commencing on
April 1, 1998 through February 28, 1999).
(B) Maximum Leverage Ratio. The Company shall not permit the ratio
------------------------
("LEVERAGE RATIO") of (i) Total Debt to (ii) EBITDA to be greater than 3.00 to
1.00 as of the end of each fiscal quarter commencing with the fiscal quarter
ending August 31, 1998 through the Termination Date.
The Leverage Ratio shall be calculated, in each case, as of the last day of
each fiscal quarter based upon (A) for purposes of calculating Total Debt,
Indebtedness as of the last day of each such fiscal quarter; and (B) for
EBITDA, the actual amount for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
---- -------
Leverage Ratio shall be calculated using EBITDA for such fiscal quarter
multiplied by four, (b) for the fiscal quarter ending November 30, 1998, the
Leverage Ratio shall be calculated using EBITDA for the two fiscal quarters
ending November 30, 1998 multiplied by two (2), and (c) for the fiscal quarter
ending February 28, 1999, the Leverage Ratio shall be calculated using EBITDA
for the three fiscal quarters ending February 28, 1999 multiplied by
four-thirds (4/3)).
(C) Capital Expenditures. The Company will not, nor will it permit any
--------------------
Subsidiary to, expend, or be committed to expend, for Capital Expenditures
during any one fiscal year in the aggregate for the Company and its
Subsidiaries in excess of (a) $81,250,000 for the fiscal year ending August
31, 1998, (b) $40,000,000 for the fiscal year ending August 31, 1999 plus any
amount permitted to be expended in the previous fiscal year but not expended
and (c) $28,750,000 in the aggregate for the fiscal years ending August 31,
2000 and August 31, 2001 plus any amount permitted to be expended in the
previous fiscal year (pursuant to the absolute dollar limitation for such
fiscal year and not pursuant to any carryover provision from a prior fiscal
year) but not expended.
(D) Minimum Consolidated Net Worth. The Company shall not permit its
---------------------------------
Consolidated Net Worth at any time to be less than the amount set forth below
--
during the period set forth opposite such amount:
Minimum Consolidated Net Worth Applicable Period
--------------------------------- ------------------
$230,000,000 April 1, 1998 through and including
August 31, 1998
$240,000,000 September 1, 1998 through and
including August 31, 1999
$250,000,000 At all times thereafter.
For purposes of determining Consolidated Net Worth of the Company and its
Subsidiaries as required by this Section 6.4(D) only, Consolidated Net Worth
--------------
of the Company and its Subsidiaries shall be calculated excluding (i) the
effect of translation account adjustments for the fiscal year ending on August
31, 1998 of up to $10,000,000 and (ii) the effect of further translation
account adjustments of up to an additional $20,000,000.
(E) Country Debt Limitations. Indebtedness (whether under this
--------------------------
Agreement or otherwise) incurred by the Subsidiaries in any particular country
shall be subject to each of the following limitations:
(1) The applicable Borrower or Subsidiary Obligor shall not have
Indebtedness under this Agreement outstanding at any time in excess of the
maximum Dollar Amount set forth below:
Borrower's or Subsidiary Obligor's
----------------------------------
Jurisdiction of Incorporation Maximum Dollar Amount
---------------------------------- ----------------------
Canada . . . . . . . . . . . . . . $ 6,500,000
---------------------------------- ----------------------
United States. . . . . . . . . . . $ 5,000,000
---------------------------------- ----------------------
Italy. . . . . . . . . . . . . . . $ 4,000,000
----------------------
Spain. . . . . . . . . . . . . . . $ 2,500,000
----------------------
Hungary. . . . . . . . . . . . . . $ 2,000,000
----------------------
Korea. . . . . . . . . . . . . . . $ 15,000,000
---------------------------------- ----------------------
Mexico . . . . . . . . . . . . . . $ 5,000,000
----------------------
Colombia . . . . . . . . . . . . . $ 5,000,000
----------------------
Brazil . . . . . . . . . . . . . . $ 5,000,000
----------------------
Philippines. . . . . . . . . . . . $ 2,500,000
----------------------
Venezuela. . . . . . . . . . . . . $ 2,500,000
---------------------------------- ----------------------
(2) The ratio of (i) Total Debt for each of the Subsidiary Borrowers and
Subsidiary Obligors (including Indebtedness owed to Affiliates but excluding
Contingent Obligations in the form of standby Letters of Credit issued under
this Agreement for the account of such Subsidiary Borrower or Subsidiary
Obligor for the benefit of domestic financial institutions as support for
loans and advances made by such financial institutions to the applicable
Subsidiary Borrower or Subsidiary Obligor to the extent any such loans or
advances are outstanding) to (ii) EBITDA for each of the Subsidiary Borrowers
and Subsidiary Obligors (other than Purina Korea, Inc.) shall not at any time
exceed 3.00 to 1.00. The ratio of (i) Total Debt (including Indebtedness owed
to Affiliates but excluding Contingent Obligations in the form of standby
Letters of Credit issued under this Agreement for the account of Purina Korea,
Inc. for the benefit of domestic financial institutions as support for loans
and advances made by such financial institutions to Purina Korea, Inc. to the
extent any such loans or advances are outstanding) to (ii) EBITDA for Purina
Korea, Inc. shall not at any time exceed 2.25 to 1.00.
The foregoing ratios shall be calculated, in each case, as of the last day of
each fiscal quarter based upon (A) for purposes of calculating Total Debt and
Indebtedness as of the last day of each such fiscal quarter, and (B) for
EBITDA, the actual amount for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
---- -------
foregoing ratios shall be calculated using EBITDA for such fiscal quarter
multiplied by four, (b) for the fiscal quarter ending November 30, 1998, the
foregoing ratios shall be calculated using EBITDA for the two fiscal quarters
ending November 30, 1998 multiplied by two (2), and (c) for the fiscal quarter
ending February 28, 1999, the foregoing ratios shall be calculated using
EBITDA for the three fiscal quarters ending February 28, 1999 multiplied by
four-thirds (4/3)).
ARTICLE VII: DEFAULTS
-------------------------
7.1 Defaults. Each of the following occurrences shall constitute a
--------
Default under this Agreement:
(a) Failure to Make Payments When Due. Any Borrower or Subsidiary
-------------------------------------
Obligor shall (i) fail to pay when due any of the Obligations consisting of
principal with respect to the Loans or Letters of Credit or (ii) shall fail to
pay within three (3) days of the date when due any of the other Obligations
under this Agreement or the other Loan Documents.
(b) Breach of Certain Covenants. Any Borrower or Subsidiary Obligor
-----------------------------
shall fail duly and punctually to perform or observe any agreement, covenant
or obligation binding on such Borrower under (i) Sections 6.1 or Sections
------------ --------
6.2(A), (B), (D), (E), (G), or (H), and such failure shall continue unremedied
-- --- --- --- --- ---
for ten (10) Business Days after the earlier to occur of (x) notice from the
Agent or any Lender to the Company of such Default and (y) the Company or any
of its Subsidiaries knew or should have known of such Default exercising
reasonable diligence, or (ii) Sections 6.2(C), (F), (I), (J), or (K), Section
--------------- --- --- --- --- -------
6.3 or Section 6.4.
--- ------------
(c) Breach of Representation or Warranty. Any representation or
----------------------------------------
warranty made or deemed made by any Borrower or Subsidiary Obligor to the
Agent or any Lender herein or by the Company or any of its Subsidiaries in any
of the other Loan Documents or in any statement or certificate at any time
given by any such Person pursuant to any of the Loan Documents shall be false
or misleading in any material respect on the date as of which made (or deemed
made).
(d) Other Defaults. Any Borrower or Subsidiary Obligor shall default in
--------------
the performance of or compliance with any term contained in this Agreement
(other than as covered by paragraphs (a), (b) or (c) of this Section 7.1), or
-------------- --- --- -----------
the Company or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in any of the other Loan Documents, and
such default shall continue for thirty (30) days after the earlier to occur of
(i) notice from the Agent or any Lender to the Company of such Default and
(ii) the Company or any of its Subsidiaries knew or should have known of such
default exercising reasonable diligence.
(e) Default as to Other Indebtedness. Any of the Company or any of its
--------------------------------
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than the Obligations) the outstanding principal
amount of which Indebtedness is in excess of $5,000,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Company or any such Subsidiary offer to
purchase such Indebtedness or other required repurchase of such Indebtedness,
or permit the holder(s) of such Indebtedness to accelerate the maturity of any
such Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due
and payable (by acceleration or otherwise) or required to be prepaid, redeemed
or otherwise repurchased by the Company or any of its Subsidiaries (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
----------------------------------------------------------
(i) An involuntary case shall be commenced against the Company, or its
Subsidiaries with an aggregate net worth equal to or greater than ten percent
(10%) of the Company's Consolidated Net Worth, and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or such
Subsidiaries in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any other
similar relief shall be granted under any applicable federal, state, local or
foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company, or its
Subsidiaries with an aggregate net worth equal to or greater than ten percent
(10%) of the Company's Consolidated Net Worth, or over all or a substantial
part of the property of the Company, or such Subsidiaries shall be entered; or
an interim receiver, trustee or other custodian of the Company or such
Subsidiaries or of all or a substantial part of the property of the Company or
such Subsidiaries shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the property of the Company or
such Subsidiaries shall be issued and any such event shall not be stayed,
dismissed, bonded or discharged within sixty (60) days after entry,
appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Company or
---------------------------------------------------
its Subsidiaries with an aggregate net worth equal to or greater than ten
percent (10%) of the Company's Consolidated Net Worth, shall (i) commence a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to
a voluntary case, under any such law, (iii) commence a voluntary case seeking,
or consent to, the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property, (iv) make
any assignment for the benefit of creditors or fail generally to pay debts as
they become due or (v) take any corporate action to authorize any of the
foregoing.
(h) Judgments and Attachments. Any money judgment(s), writ or warrant
-------------------------
of attachment, or similar process against any of the Company or any of its
Subsidiaries or any of their respective assets involving in any single case or
in the aggregate an amount in excess of $5,000,000 is (are) entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty
(60) days or in any event later than fifteen (15) days prior to the date of
any proposed sale thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered against
-----------
the Company, or its Subsidiaries with an aggregate net worth equal to or
greater than ten percent (10%) of the Company's Consolidated Net Worth,
decreeing its involuntary dissolution or split up and such order shall remain
undischarged and unstayed for a period in excess of sixty (60) days; or the
Company or such Subsidiaries shall otherwise dissolve or cease to exist except
as specifically permitted by this Agreement unless the dissolving entity is a
limited liability company which elects to continue its existence.
(j) Loan Documents; Failure of Security. At any time, for any reason,
-----------------------------------
(i) any Loan Document as a whole that materially affects the ability of the
Agent, or any of the Lenders to enforce the Obligations or enforce their
rights against the Collateral, ceases to be in full force and effect or any of
the Company or any of its Subsidiaries party thereto seeks to repudiate its
obligations thereunder and the Liens intended to be created thereby are, or
any of the Company or any such Subsidiary seeks to render such Liens, invalid
and unperfected, or (ii) any action shall be taken to discontinue or to assert
the invalidity or unenforceability of any Loan Document, or (iii) Liens on
Collateral with a fair market value in excess of $2,500,000 in favor of the
Agent contemplated by the Loan Documents shall, at any time, for any reason,
be invalidated or otherwise cease to be in full force and effect, or such
Liens shall not have the priority contemplated by this Agreement or the Loan
Documents.
(k) Termination Event. Any Termination Event occurs which the Required
-----------------
Lenders believe is reasonably likely to subject the Company or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$2,500,000.
(l) Waiver of Minimum Funding Standard. If the plan administrator of
-----------------------------------
any Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is
based could reasonably be expected to subject either the Company or any
Controlled Group member to liability individually or in the aggregate in
excess of $2,500,000.
(m) Change of Control. A Change of Control shall occur.
-------------------
(n) Environmental Matters. The Company or any of its Subsidiaries shall
---------------------
be the subject of any proceeding or investigation pertaining to (i) the
Release by the Company or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of any of the Company or any of its
Subsidiaries arising from the Release by any other Person of any Contaminant
into the environment, or (iii) any violation of any Environmental, Health or
Safety Requirements of Law by the Company or any of its Subsidiaries, which,
in any case, has or is reasonably likely to subject the Company or any of its
Subsidiaries to liability individually in excess of $2,500,000 or in the
aggregate in excess of $5,000,000.
(o) Guarantor Revocation. Except as provided by Section 6.3(B)(iv) with
-------------------- ------------------
respect to the sale, dissolution or liquidation of certain Subsidiaries of the
Company, any guarantor of the Obligations shall terminate or revoke or refuse
to perform or assert invalidity of any of its payment obligations under the
applicable guarantee agreement or breach any of the other terms of such
guarantee agreement which breach remains unremedied for five (5) days.
A Default shall be deemed "continuing" until waived in writing in
accordance with Section 8.3.
------------
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
------------------------------------------------------------------------------
REMEDIES
--------
8.1 Remedies
(a) Termination of Commitments; Acceleration. If any Default described
----------------------------------------
in Section 7.1(f) or 7.1(g) occurs with respect to any of the Borrowers, the
--------------- ------
obligations of the Lenders to make Loans hereunder and the obligation of the
Agent or any Issuing Lender to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, any Lender or
any Issuing Lender. If any other Default occurs, the Required Lenders may (i)
terminate or suspend the obligations of the Lenders to make Loans hereunder
and the obligation of the Issuing Lenders to issue Letters of Credit
hereunder, or (ii) declare the Obligations to be due and payable, or both, and
upon any declaration under clause (ii), the Obligations shall become
------------
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrowers expressly waive.
(b) Rescission. If at any time after termination of the Lenders'
----------
obligations to make Loans or acceleration of the maturity of the Loans,
Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Defaults and Unmatured Defaults (other than nonpayment of
principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be waived pursuant to Section 8.3, then upon the
-----------
written consent of the Required Lenders and written notice to Borrowers, the
termination of Lenders' respective obligations to make Loans and the
respective Lenders' and the Issuing Lenders' obligations to participate in or
issue Letters of Credit or the aforesaid acceleration and its consequences may
be rescinded and annulled; but such action shall not affect any subsequent
Default or Unmatured Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the
Lenders and the Issuing Lenders to a decision which may be made at the
election of the Required Lenders; they are not intended to benefit Borrowers
and do not give Borrowers the right to require the Lenders to rescind or annul
any termination of the aforesaid obligations of the Lenders or Issuing Lenders
or any acceleration hereunder, even if the conditions set forth herein are
met.
(c) Enforcement. The Borrowers acknowledge that in the event the
-----------
Borrowers fail to perform, observe or discharge any of their respective
obligations or liabilities under this Agreement or any other Loan Document,
any remedy of law may prove to be inadequate relief to the Agent, the Issuing
Lenders and the Lenders; therefore, Borrowers agree that the Agent, the
Issuing Lenders and the Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
8.2 Defaulting Lender. In the event that any Lender fails to fund its
-----------------
Revolving Credit Share of any Advance requested or deemed requested by any
Borrower which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to as
a "NON PRO RATA LOAN"), until the earlier of such Lender's cure of such
failure and the termination of the Commitments, the proceeds of all amounts
thereafter repaid to the Agent by the Borrowers and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrowers by the Agent ("CURE
LOANS") on behalf of such Lender to cure, in full or in part, such failure by
such Lender, but shall nevertheless be deemed to have been paid to such Lender
in satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(i) the foregoing provisions of this Section 8.2 shall apply only with
-----------
respect to the proceeds of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section 2.6;
------------
(ii) any such Lender shall be deemed to have cured its failure to fund
its Revolving Credit Share of any Advance at such time as an amount equal to
such Lender's original Revolving Credit Share of the requested principal
portion of such Advance is fully funded to the applicable Borrower, whether
made by such Lender itself or by operation of the terms of this Section 8.2,
-----------
and whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(iii) regardless of whether or not a Default has occurred or is continuing,
and notwithstanding the instructions of the applicable Borrower as to its
desired application, all repayments of principal which, in accordance with the
other terms of this Agreement, would be applied to the outstanding Base Rate
Loans shall be applied first, ratably to all Base Rate Loans constituting Non
-----
Pro Rata Loans, second, ratably to Base Rate Loans other than those
------
constituting Non Pro Rata Loans or Cure Loans and, third, ratably to Base Rate
-----
Loans constituting Cure Loans;
(iv) for so long as and until the earlier of any such Lender's cure of
the failure to fund its Revolving Credit Share of any Advance and the
termination of the Commitments, the term "Required Lenders" for purposes of
this Agreement shall mean Lenders (excluding all Lenders whose failure to fund
their respective Revolving Credit Shares of such Advance have not been so
cured) whose Pro Rata Shares represent at least sixty-six and two-thirds
(66-2/3%) of the aggregate Pro Rata Shares of such Lenders; and
(v) for so long as and until any such Lender's failure to fund its
Revolving Credit Share of any Advance is cured in accordance with Section
-------
8.2(ii), (A) such Lender shall not be entitled to any facility fees with
---
respect to its Commitments and (B) such Lender shall not be entitled to any
-
letter of credit fees, which facility fees and letter of credit fees shall
accrue in favor of the performing Lenders, shall be allocated among such
performing Lenders ratably based upon their relative Commitments.
8.3 Amendments. Subject to the provisions of this Article VIII, the
---------- ------------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers and Subsidiary Obligors may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the
Borrowers or the Subsidiary Obligors hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall,
-------- -------
without the consent of each Lender affected thereby:
(i) Postpone or extend the Termination Date or any other date fixed for
any payment of principal of, or interest on, the Loans, the Reimbursement
Obligations or any fees or other amounts payable to such Lender (except with
respect to (a) any modifications of the provisions relating to prepayments of
Loans and other Obligations and (b) a waiver of the application of the default
rate of interest pursuant to Section 2.7 hereof).
------------
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon.
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters.
(iv) Increase the amount of the Commitment of any Lender hereunder
(except with respect to an increase in any sublimits for any Types of Loans
within the Commitments).
(v) Permit any Borrower to assign its rights under this Agreement.
(vi) Amend Section 2.24 or this Section 8.3.
------------- ------------
(vii) Except as provided by Section 6.3(B)(iv) with respect to the sale,
------------------
dissolution or liquidation of certain Subsidiaries of the Company, release any
guarantor of all or any part of the Obligations or release all or
substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. No amendment of any
provision of this Agreement relating to any Issuing Lender shall be effective
without the written consent of the Agent and each of the Issuing Lenders. The
Agent may waive payment of the fee required under Section 12.3(B) without
---------------
obtaining the consent of any of the Lenders.
8.4 Preservation of Rights. No delay or omission of the Lenders, the
-----------------------
Issuing Lenders or the Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance of a Letter of
Credit notwithstanding the existence of a Default or the inability of the
Borrowers to satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence. Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment
or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in writing signed by the Lenders
required pursuant to Section 8.3, and then only to the extent in such writing
-----------
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative and all shall be available to the Agent, the
Issuing Lenders and the Lenders until the Obligations have been paid in full.
ARTICLE IX: GENERAL PROVISIONS
-----------------------------------
9.1 Survival of Representations. All representations and warranties of
---------------------------
the Borrowers and Subsidiary Obligors contained in this Agreement shall
survive delivery of this Agreement and the making of the Loans herein
contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
------------------------
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrowers and neither the Agent nor any Issuing Lender shall be obligated
to issue any Letter of Credit for the account of any Borrower or Subsidiary
Obligor in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Performance of Obligations. Each of the Borrowers and the
----------------------------
Subsidiary Obligors agrees that the Agent may, but shall have no obligation to
(i) at any time, pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral and (ii)
after the occurrence and during the continuance of a Default make any other
payment or perform any act required of any Borrower or Subsidiary Obligor
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral.
The Agent shall use its best efforts to give the applicable Borrower or
Subsidiary Obligor notice of any action taken under this Section 9.3 prior to
-----------
the taking of such action or promptly thereafter provided the failure to give
such notice shall not affect the applicable Borrower's or Subsidiary Obligor
obligations in respect thereof. Each of the Borrowers and the Subsidiary
Obligors agrees to pay the Agent, upon demand, the principal amount of all
funds advanced by the Agent under this Section 9.3, together with interest
-----------
thereon at the rate from time to time applicable to Base Rate Loans from the
date of such advance until the outstanding principal balance thereof is paid
in full. If any Borrower or Subsidiary Obligor fails to make payment in
respect of any such advance under this Section 9.3 within one (1) Business Day
-----------
after the date such Borrower or Subsidiary Obligor receives written demand
therefor from the Agent, the Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the Agent, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata
Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day during
the period commencing on the date of such demand and ending on the date such
amount is received. The failure of any Lender to make available to the Agent
its Pro Rata Share of any such unreimbursed advance under this Section 9.3
-----------
shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Agent. All outstanding principal of, and
interest on, advances made under this Section 9.3 shall constitute Obligations
-----------
secured by the Collateral until paid in full by the Borrowers and the
Subsidiary Obligors.
9.4 Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire agreement
-----------------
and understanding among the Borrowers, the Subsidiary Obligors, the Agent, and
the Lenders and supersede all prior agreements and understandings relating to
the subject matter thereof.
9.6 Several Obligations; Benefits of this Agreement. The respective
-------------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other. The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7 Expenses; Indemnification.
--------------------------
(A) Expenses. Subject to the letter agreements dated February 25, 1998
--------
and November 3, 1997 among the Company, the Agent and the Arranger with
respect to costs and expenses incurred on or prior to the Closing Date, the
Borrowers and Subsidiary Obligors shall reimburse the Agent and the Arranger
for any reasonable costs, internal charges and out-of-pocket expenses
(including attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent or the Arranger, which attorneys and paralegals may
be employees of the Agent or the Arranger) paid or incurred by the Agent or
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. Each of the Borrowers and Subsidiary Obligors also agrees to
reimburse the Agent, the Lenders and the Issuing Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent,
the Lenders and the Issuing Lenders, which attorneys and paralegals may be
employees of the Agent, the Lenders or the Issuing Lenders) paid or incurred
by the Agent, any Lender or any Issuing Lender in connection with the
collection of the Obligations and enforcement of the Loan Documents. In
addition to expenses set forth above, each of the Borrowers and Subsidiary
Obligors agrees to reimburse the Agent, promptly after the request therefor,
for each audit, collateral analysis or other business analysis performed by
the Agent (or its authorized representative) for the benefit of the Lenders in
connection with this Agreement or the other Loan Documents in an amount equal
to the Agent's then customary charges for each person employed to perform such
audit or analysis, plus all reasonable costs and expenses (including without
limitation, travel expenses) incurred by the Agent in the performance of such
audit or analysis; provided, that each Borrower and Subsidiary Obligor shall
--------
only be responsible for expenses in connection with one (1) such audit or
business analysis performed with respect to such Borrower or Subsidiary
Obligor, as applicable, in any twelve-month period at a time when no Default
had occurred or was continuing. The Agent shall provide the Borrowers with a
detailed statement of all reimbursements requested under this Section 9.7(A).
--------------
(B) Indemnity. Each of the Borrowers and Subsidiary Obligors further
---------
agrees to defend, protect, indemnify, and hold harmless the Agent, the
Arranger, each and all of the Lenders, each and all of the Issuing Lenders,
and each of their respective Affiliates, and each of such Agent's, Arranger's,
Lender's, Issuing Lender's or Affiliate's respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article IV) (collectively, the "INDEMNITEES") from and
----------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall
be designated a party thereto), imposed on, incurred by, or asserted against
such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents, or any act, event or
transaction related or attendant thereto, the making of the Loans, and the
issuance of and participation in Letters of Credit hereunder, the management
of such Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Loan Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety Requirements of
Law arising from or in connection with the past, present or future operations
of the Company, its Subsidiaries or any of their respective predecessors in
interest, or, the past, present or future environmental, health or safety
condition of any respective property of the Company or its Subsidiaries, the
presence of asbestos-containing materials at any respective property of the
Company or its Subsidiaries or the Release or threatened Release of any
Contaminant into the environment (collectively, the "INDEMNIFIED MATTERS");
provided, however, the Borrowers and Subsidiary Obligors shall have no
-------- -------
obligation to an Indemnitee hereunder with respect to (i) Indemnified Matters
-------
to the extent any such Indemnified Matter is found in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from such
Indemnitee's gross negligence or wilful misconduct or (ii) Indemnified Matters
arising solely out of a dispute between the Agent or a dispute between any
Lender and the Agent. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers and Subsidiary Obligors
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. Each of the
----------------------------------------------------
Borrowers and each of the Subsidiary Obligors agrees to assert no claim
against any of the Indemnitees on any theory of liability for consequential
damages, indirect damages, exemplary damages, punitive damages or any other
similar theory of damages howsoever categorized. No settlement shall be
entered into by the Company or any if its Subsidiaries with respect to any
claim, litigation, arbitration or other proceeding relating to or arising out
of the transaction evidenced by this Agreement or the other Loan
Documents(whether or not the Agent, any Lender, any Issuing Lender or any
Indemnitee is a party thereto) unless such settlement releases all Indemnitees
from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
------------------------
Borrowers and Subsidiary Obligors under this Section 9.7 shall survive the
-----------
termination of this Agreement.
9.8 Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10 Severability of Provisions. Any provision in any Loan Document
----------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11 Nonliability of Lenders. The relationship among the Borrowers, the
-----------------------
Subsidiary Obligors and the Lenders, Issuing Lenders and the Agent shall be
solely that of borrower and lender. Neither the Agent nor any Lender nor any
Issuing Lender shall have any fiduciary responsibilities to the Borrowers or
to the Subsidiary Obligors. Neither the Agent, nor any Lender, nor any
Issuing Lender undertakes any responsibility to the Borrowers or the
Subsidiary Obligors to review or inform the Borrowers or Subsidiary Obligors
of any matter in connection with any phase of the Borrowers' or Subsidiary
Obligors' business or operations.
9.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF
--------------
ITSELF, THE OTHER AGENTS, THE LENDERS AND THE ISSUING LENDERS, AT CHICAGO,
ILLINOIS BY ACKNOWLEDGING AND AGREEING TO IT THERE. THIS AGREEMENT SHALL BE
GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ILLINOIS. WITHOUT LIMITING THE FOREGOING, ANY DISPUTE BETWEEN
ANY BORROWER OR ANY SUBSIDIARY OBLIGOR AND THE AGENT, ANY LENDER, ANY ISSUING
LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM
IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
9.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
--------------------------------------------------------------
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
------------ --------------
PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO
WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION
--------------
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH OF THE BORROWERS AND SUBSIDIARY OBLIGORS
-------------------
AGREES THAT THE AGENT, ANY LENDER, ANY ISSUING LENDER OR ANY HOLDER OF SECURED
OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST ANY BORROWER OR ANY
SUBSIDIARY OBLIGOR OR ANY BORROWER'S OR SUBSIDIARY OBLIGOR'S PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER SUCH BORROWER OR SUBSIDIARY OBLIGOR OR (2) REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF THE
BORROWERS AND SUBSIDIARY OBLIGORS AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT UNDER THIS CLAUSE (B) BY
----------
SUCH PERSON TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
PERSON ALL OF WHICH PERMISSIVE COUNTERCLAIMS MAY BE BROUGHT ONLY IN THE
JURISDICTION SET FORTH IN CLAUSE (A) ABOVE. EACH OF THE BORROWERS AND
-----------
SUBSIDIARY OBLIGORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
-------------
(C) VENUE. EACH OF THE BORROWERS AND SUBSIDIARY OBLIGORS IRREVOCABLY
-------
WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY
----- --- ----------
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
--------------------
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
9.14 Subordination of Intercompany Indebtedness. Each of the Borrowers
------------------------------------------
and Subsidiary Obligors agrees that any and all claims of such Borrower or
Subsidiary Obligor against any other Borrower, any Subsidiary Obligor, any
endorser, obligor or any other guarantor of all or any part of the Secured
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all Secured
Obligations. Notwithstanding any right of any Borrower or Subsidiary Obligor
to ask, demand, xxx for, take or receive any payment from any other Borrower
or any Subsidiary Obligor, all rights, liens and security interests of any
Borrower or Subsidiary Obligor, whether now or hereafter arising and howsoever
existing, in any assets of any other Borrower or any Subsidiary Obligor
(whether constituting part of Collateral given to any Holder of Secured
Obligations or the Agent to secure payment of all or any part of the Secured
Obligations or otherwise) shall be and are subordinated to the rights of the
Holders of Secured Obligations and the Agent in those assets. No Borrower or
Subsidiary Obligor shall have any right to possession of any such asset or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Secured Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied and all financing
arrangements among the Borrowers, Subsidiary Obligors and the Holders of
Secured Obligations have been terminated. So long as any Default shall have
occurred and is continuing, if all or any part of the assets of any Borrower
or Subsidiary Obligor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Borrower or
Subsidiary Obligor, whether partial or complete, voluntary or involuntary, and
whether by reason of liquidation, bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or proceeding, or
if the business of any Borrower or Subsidiary Obligor is dissolved or if
substantially all of the assets of any Borrower or Subsidiary Obligor are
sold, then, and in any such event, any payment or distribution of any kind or
character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any such
Borrower or Subsidiary Obligor to any other Borrower or Subsidiary Obligor
("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered directly to the Agent
for application on any of the Secured Obligations, due or to become due, until
such Secured Obligations (other than contingent indemnity obligations) shall
have first been fully paid and satisfied. The Borrowers and the Subsidiary
Obligors irrevocably authorize and empower the Agent to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor and to make and present for and on behalf of the applicable Borrower
or Subsidiary Obligor such proofs of claim and take such other action, in the
Agent's own name or in the name of the applicable Borrower or Subsidiary
Obligor or otherwise, as the Agent may deem necessary or advisable for the
enforcement of this Section 9.14; provided, that the Agent agrees not to
------------- --------
exercise such powers unless a Default shall have occurred and is continuing.
The Agent may vote such proofs of claim in any such proceeding, receive and
collect any and all dividends or other payments or disbursements made thereon
in whatever form the same may be paid or issued and apply the same on account
of any of the Secured Obligations. Should any payment, distribution, security
or instrument or proceeds thereof be received by any Borrower or Subsidiary
Obligor upon or with respect to the Intercompany Indebtedness at any time a
Default shall have occurred and be continuing and prior to the satisfaction of
all of the Secured Obligations (other than contingent indemnity obligations)
and the termination of all financing arrangements among the Borrowers, the
Subsidiary Obligors and the Holders of Secured Obligations, the applicable
Borrower or Subsidiary Obligor shall receive and hold the same in trust, as
trustee, for the benefit of the Holders of Secured Obligations and shall so
long as any Default shall have occurred and be continuing promptly deliver the
same to the Agent, for the benefit of the Holders of Secured Obligations, in
precisely the form received (except for the endorsement or assignment of the
Borrower where necessary), for application to any of the Secured Obligations,
due or not due, and, until so delivered, the same shall be held in trust by
the Borrower or Subsidiary Obligor, as applicable, as the property of the
Holders of Secured Obligations. If any Borrower or Subsidiary Obligor fails
to make any such endorsement or assignment to the Agent, the Agent or any of
its officers or employees are irrevocably authorized to make the same. So
long as any Default shall have occurred and is continuing, the Borrowers and
Subsidiary Obligors agree that until the Secured Obligations (other than the
contingent indemnity obligations) have been paid in full (in cash) and
satisfied and all financing arrangements among the Borrowers, Subsidiary
Obligors and the Holders of Secured Obligations have been terminated, the
Borrowers and Subsidiary Obligors will not assign or transfer to any Person
(other than the Agent) any claim such Borrower or Subsidiary Obligor has or
may have against any other Borrower or Subsidiary Obligor.
9.15 No Strict Construction. The parties hereto have participated
------------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
ARTICLE X: THE AGENT
-------------------------
10.1 Appointment; Nature of Relationship. ABN AMRO Bank N.V. is
--------------------------------------
appointed by the Lenders (each reference in this Article X to a Lender being
---------
in its capacity either as a Lender or an Issuing Lender, or any or all of the
foregoing) as the Agent hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term "Agent," it is
-----
expressly understood and agreed that the Agent shall not have any fiduciary
---
responsibilities to any Lender by reason of this Agreement and that the Agent
is merely acting as the representative of the Lenders with only those duties
as are expressly set forth in this Agreement and the other Loan Documents. In
its capacity as the Lenders' contractual representative, the Agent (i) does
not assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders agrees to assert
no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender
waives.
10.2 Powers. The Agent shall have and may exercise such powers under
------
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties or fiduciary duties to the Lenders, or
any obligation to the Lenders to take any action hereunder or under any of the
other Loan Documents except any action specifically provided by the Loan
Documents required to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its respective
-----------------
directors, officers, agents or employees shall be liable to any of the
Borrowers, the Subsidiary Obligors, the Lenders or any Lender for any action
taken or omitted to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith except to the extent any such
action or inaction is found in a final non-appealable judgment by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.
10.4 No Responsibility for Loans, Creditworthiness, Collateral,
---------------------------------------------------------------
Recitals, Etc. Neither the Agent nor any of its respective directors,
-------
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of
any condition specified in Article IV; (iv) the existence or possible
-----------
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of any of the Liens on any of the
Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or
for the financial condition of any Subsidiary Obligor of any or all of the
Obligations, the Company or any of its Subsidiaries.
10.5 Action on Instructions of Lenders. The Agent shall in all cases be
---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders (except with respect to actions that require the consent of
all of the Lenders as provided in Section 8.3), and such instructions and any
-----------
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all Holders of Secured Obligations. The Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that
it may incur by reason of taking or continuing to take any such action.
10.6 Employment of Agents and Counse. The Agent may execute any of its
-------------------------------
duties hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact, and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement among the Agent and the Lenders, as the
case may be, and all matters pertaining to its duties hereunder and under any
other Loan Document.
10.7 Reliance on Documents; Counse. The Agent shall be entitled to rely
-----------------------------
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may
be employees of the Agent.
10.8 The Agent's Reimbursement and Indemnification. The Lenders agree
---------------------------------------------
to reimburse and indemnify the Agent ratably in proportion to their respective
Pro Rata Shares (i) for any amounts not reimbursed by the Borrowers or
Subsidiary Obligors for which the Agent is entitled to reimbursement or
indemnification by the Borrowers or Subsidiary Obligors under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents including as a result of
a dispute among the Lenders or between any Lender and the Agent, and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
including as a result of a dispute among the Lenders or between any Lender and
the Agent, provided that no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have arisen from the gross negligence
or willful misconduct of the Agent.
10.9 Rights as a Lender. With respect to its Commitments, Loans made by
------------------
it and Letters of Credit issued by it as an Issuing Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document as
any Lender and may exercise the same as through it were not the Agent, and the
term "Lender" or "Lenders" or "Issuing Lender" or "Issuing Lenders", as
applicable, shall, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money
to, enter into Hedging Agreements and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Company or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
10.10 Lender Credit Decision. Each Lender acknowledges that it has,
------------------------
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Company, the Borrowers and
the Subsidiary Obligors and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement and the other Loan Documents.
10.11 Successor Agent. The Agent may resign at any time by giving
----------------
written notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint, on behalf
of the Borrowers and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty days after the retiring Agent's giving notice
of resignation, then the retiring Agent may appoint, on behalf of the
Borrowers and the Lenders, a successor Agent. Notwithstanding anything herein
to the contrary, so long as no Default has occurred and is continuing, each
such successor Agent shall be subject to approval by the Company, which
approval shall not be unreasonably withheld. Such successor Agent shall be a
commercial bank having capital and retained earnings of at least $500,000,000.
Upon the acceptance of any appointment as the Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder
and under the other Loan Documents. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article X shall continue in effect
---------
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent hereunder and under the other Loan Documents.
10.12 Collateral Documents. Each Lender authorizes the Agent to enter
--------------------
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. Each Lender agrees that no Lender
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights
and remedies may be exercised solely by the Agent for the benefit of the
Holders of Secured Obligations upon the terms of the Collateral Documents.
10.13. No Duties Imposed Upon Syndication Agent, Documentation Agent or
----------------------------------------------------------------
Arranger. None of the Persons identified on the cover page to this Agreement,
--------
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders identified on the cover page to
this Agreement, the signature pages to this Agreement or otherwise in this
Agreements as a "Syndication Agent" or "Documentation Agent" or "Arranger"
shall have or be deemed to have any fiduciary duty to or fiduciary
relationship with any Lender. In addition to the agreements set forth in
Section 10.10, each of the Lenders acknowledges that it has not relied, and
----------
will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE XI: SETOFF; RATABLE PAYMENTS
------------------------------------------
11.1 Setoff. In addition to, and without limitation of, any rights of
------
the Lenders or Issuing Lenders under applicable law, if any Default occurs and
is continuing, any indebtedness from any Lender or Issuing Lender to any of
the Borrowers or Subsidiary Obligors (including all account balances, whether
provisional or final and whether or not collected or available) may be offset
and applied toward the payment of the Obligations owing to such Lender, such
Issuing Lender and the other Obligations, whether or not the Obligations, or
any part hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Loans (other than payments received pursuant
to Sections 3.1, 3.2 or 3.4) in a greater proportion than that received by any
------------ --- ---
other Lender, such Lender agrees, promptly upon demand, to purchase a portion
of the Loans held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligation or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to the obligations owing to
them. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
11.3 Application of Payments. Subject to the provisions of Section 8.2,
----------------------- -----------
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
Section 11.3, apply all payments and prepayments in respect of any Obligations
---------
and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of the
Loans which the Agent may have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or the Borrower or
Subsidiary Obligor;
(B) second, to pay interest on and then principal of any advance made
under Section 9.3 for which the Agent has not then been paid by the Borrowers
-----------
or the Subsidiary Obligors or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and Issuing Lender;
(E) fifth, to pay interest due in respect of Loans and L/C Obligations;
(F) sixth, to the ratable payment or prepayment of principal outstanding
on Loans and Reimbursement Obligations and Hedging Obligations in such order
as the Agent may determine in its sole discretion;
(G) seventh, to provide required cash collateral if any pursuant to
Section 2.19; and
---------
(H) eighth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior
to the occurrence of a Default) by the Borrowers, all principal payments in
respect of Loans shall be applied first, to repay outstanding Base Rate Loans,
-----
and then to repay outstanding Eurodollar Loans and Korean Eurodollar Loans
----
with those Eurodollar Loans and Korean Eurodollar Loans, as applicable, which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods. The order of priority set forth in this
Section 11.3 and the related provisions of this Agreement are set forth solely
--------
to determine the rights and priorities of the Agent, the Lenders, the Issuing
Lender and other Holders of Secured Obligations as among themselves. As long
as a Default shall have occurred and is continuing, the order of priority set
forth in clauses (D) through (H) of this Section 11.3 may at any time and from
----------- --- ------------
time to time be changed by the Required Lenders without necessity of notice to
or consent of or approval by the Borrowers, the Subsidiary Obligors, or any
other Person. The order of priority set forth in clauses (A) through (C) of
----------- ---
this Section 11.3 may be changed only with the prior written consent of the
-------------
Agent.
11.4 Relations Among Lenders
-------------------------
(a) Except with respect to the exercise of set-off rights of any Lender
in accordance with Section 11.1, the proceeds of which are applied in
-------------
accordance with this Agreement, and each Lender agrees that it will not take
any action, nor institute any actions or proceedings, against any Borrower,
any Subsidiary Obligor or any other obligor hereunder or with respect to any
Collateral or Loan Document, without the prior written consent of the Required
Lenders or, as may be provided in this Agreement or the other Loan Documents,
at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein
in case of the Agent) authorized to act for, any other Lender.
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
----------------------------------------------------------------------
12.1 Successors and Assigns. The terms and provisions of the Loan
------------------------
Documents shall be binding upon and inure to the benefit of the Borrowers, the
Subsidiary Obligors and the Lenders and their respective successors and
assigns, except that (i) none of the Borrowers or Subsidiary Obligors shall
have the right to assign their rights or obligations under the Loan Documents
and (ii) any assignment by any Lender must be made in compliance with Section
-------
12.3 hereof. Notwithstanding clause (ii) of this Section 12.1, any Lender may
---- ----------- ------------
at any time, without the consent of any Borrower, any Subsidiary Obligor or
the Agent, assign all or any portion of its rights under this Agreement, if
any, issued to it to a Federal Reserve Bank; provided, however, that no such
-------- -------
assignment shall release the transferor Lender from its obligations hereunder.
The Agent may treat each Lender as the owner of the Loans made by such Lender
for all purposes hereof unless and until such Lender complies with Section
-------
12.3 hereof in the case of an assignment thereof or, in the case of any other
-
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Loan agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of any Loan, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Loan.
12.2 Participations.
--------------
(A) Permitted Participants; Effect. Subject to the terms set forth in
------------------------------
this Section 12.2, any Lender may, in the ordinary course of its business and
------------
in accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender, any Commitment of such Lender, any L/C Interest of such Lender or
any other interest of such Lender under the Loan Documents on a pro-rata or
non-pro-rata basis; provided that without the prior written consent of the
--------
Agent, the amount of such participation shall not be for less than $5,000,000.
Notice of such participation to the Company and the Agent shall be required
prior to any participation becoming effective with respect to a Participant
which is not a Lender or an Affiliate thereof. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of all Loans made by it
for all purposes under the Loan Documents, all amounts payable by the
Borrowers and Subsidiary Obligors under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Borrowers,
Subsidiary Obligors and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents except that, for purposes of Article III hereof, the
-----------
Participants shall be entitled to the same rights as if they were Lenders;
provided however that no Participant shall be entitled to receive any greater
----- -------
payment under such Article III than the Lender would have been entitled to
------------
receive with respect to the rights participated.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
-------------
without the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents other than any amendment, modification
or waiver with respect to any Loan or Commitment in which such Participant has
an interest which requires the consent of all of the Lenders under Section
-------
8.3.
(C) Benefit of Setoff. The Borrowers and the Subsidiary Obligors agree
-----------------
that each Participant shall be deemed to have the right of setoff provided in
Section 11.1 hereof in respect to its participating interest in amounts owing
-------------
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right of setoff provided
--------
in Section 11.1 hereof with respect to the amount of participating interests
-------------
sold to each Participant except to the extent such Participant exercises its
right of set off. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1
------------
hereof, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance with
Section 11.2 as if each Participant were a Lender.
-------------
12.3 Assignments.
-----------
(A) Permitted Assignments. Any Lender may, in the ordinary course of
----------------------
its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or a portion of its rights
and obligations under this Agreement, including, without limitation, any
Commitments, any Loans owing to it, all of its interests as Issuing Lender
with respect to Letters of Credit, all of its participation interests in
existing Letters of Credit and its obligation to participate in additional
Letters of Credit in accordance with the provisions of this Section 12.3.
------------
Such assignment shall be substantially in the form of Exhibit D hereto and,
---------
without the prior consent of the Agent, shall not be permitted hereunder
unless (i) such assignment is either for all of such Lender's rights and
obligations under the Loan Documents or involves Loans and Commitments in an
aggregate amount of at least $5,000,000 and (ii) the Purchaser shall be able
to fund in Korean Won its share of any Advance requested or deemed requested
in Korean Won by Purina Korea, Inc. Notice to the Agent and the Company and
consent of the Company and the Agent (which consents will not be unreasonably
withheld) shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, however, no consent of the Company shall be required for any
-------
assignment to become effective at a time when a Default has occurred and is
continuing.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice
----------------------
of assignment, substantially in the form attached as Appendix I to Exhibit D
---------- ---------
hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required by
Section 12.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for
-----------
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment, Loans
and L/C Obligations under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser, if
not already a Lender, shall for all purposes be a Lender party to this
Agreement and any other Loan Documents executed by the Lenders and shall have
all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no consent or action
by any of the Borrowers, Subsidiary Obligors or the Lenders and no further
consent or action by the Agent shall be required to release the transferor
Lender with respect to the percentage of the Commitments, Loans and Letter of
Credit participations assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3(B), if requested
---------------
by the transferor Lender or Purchaser, the transferor Lender, the Agent and
the Borrowers shall make appropriate arrangements so that, to the extent notes
have been issued to evidence any of the transferred Loans, replacement notes
are issued to such transferor Lender and new notes or, as appropriate,
replacement notes, are issued to such Purchaser, in each case in principal
amounts reflecting their Commitments, as adjusted pursuant to such assignment.
(C) The Register. The Agent shall maintain at its address referred to
------------
in Section 13.1 a copy of each assignment delivered to and accepted by it
-------------
pursuant to this Section 12.3 and a register (the "REGISTER") for the
- -------------
recordation of the names and addresses of the Lenders and the Commitments of
-
and principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an assignment under this Section 12.3. The entries in the
-------------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Company and each of its Subsidiaries, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
12.4 Confidentiality. Subject to Section 12.5, the Agent and the
--------------- -------------
Lenders shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement in accordance with such Person's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices. Each of the Agent and the
Lenders agrees that it will not make use of any such confidential information
for personal gain or for transactions other than those contemplated by this
Agreement, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by
such Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Company and its
Subsidiaries provided that such source is not bound by a confidentiality
agreement known to such Agent or such Lender; provided, however, that the
-------- -------
Agent and any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which such Agent
or such Lender is subject or in connection with an examination of such Agent
or such Lender by any such Governmental Authority; (B) pursuant to subpoena or
other court process (and shall use its best efforts to provide advance notice
thereof to the extent foreseeable and permitted); (C) when required to do so
in accordance with the provisions of any applicable requirement of law (and
shall use its best efforts to provide advance notice thereof to the extent
foreseeable and permitted); (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent, any Lender or
their respective affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Agent's or such Lender's independent
auditors, accountants, attorneys and other professional advisors; (G) to any
affiliate of the Agent or such Lender, or to any prospective Transferee,
provided that such affiliate or prospective Transferee agrees to keep such
information confidential to the same extent required of the Agent and the
Lenders hereunder (and, so long as no Default shall have occurred and is
continuing, shall use its best efforts to provide advance notice thereof); and
(H) as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any of its Subsidiaries is
party or is deemed party with such Agent or such Lender. In any event, the
Agent and the Lenders may make disclosure reasonably required by a prospective
Transferee in connection with the contemplated participation or assignment or
as required or requested by any Governmental Authority or representative
thereof or pursuant to legal process and shall require any such Transferee or
prospective Transferee to agree (and require any of its Transferees to agree)
to comply with this Section 12.4. In no event shall the Agent or any Lender
------------
be obligated or required to return any materials furnished by the Borrowers or
Subsidiary Obligors; provided, however, each prospective Transferee shall be
-------- -------
required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrowers or
Subsidiary Obligors in connection with this Agreement.
12.5 Dissemination of Information. Each of the Borrowers and Subsidiary
----------------------------
Obligors authorizes each Lender to disclose to any Participant or Purchaser or
any other Person acquiring an interest in the Loan Documents by operation of
law (each a "TRANSFEREE") and any prospective Transferee any and all
information in such Lender's possession concerning the Company and its
Subsidiaries and the Collateral; provided that prior to any such disclosure,
--------
such prospective Transferee shall agree to preserve in accordance with Section
-------
12.4 the confidentiality of any confidential information described therein.
----
ARTICLE XIII: NOTICES
-------------------------
13.1 Giving Notice. Except as otherwise permitted by Section 2.11 with
------------- ------------
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by facsimile and addressed or delivered to such party, with respect
to any Borrower or any Subsidiary Obligor, in care of the Company at the
address set forth below, and for any other party at its address set forth
below its signature hereto or at such other address as may be designated by
such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by facsimile, shall be deemed given when
transmitted; or, if by courier, one (1) Business Day after deposit with a
reputable overnight carrier services, with all charges paid. Notices to any
Borrower or any Subsidiary Obligor shall be addressed as follows:
Agribrands International, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxxx
Chief Financial Officer
Phone: (000)000-0000
Facsimile: (000)000-0000
13.2 Change of Address. Any of the Borrowers, Subsidiary Obligors, the
-----------------
Agent and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
ARTICLE XIV: COUNTERPARTS
-----------------------------
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this
Agreement by signing any such counterpart. Delivery of an executed signature
page hereof or thereof by facsimile transmission shall be effective as
delivery of a manually signed counterpart. This Agreement shall be effective
when it has been executed by the Borrowers, the Subsidiary Obligors, the Agent
and the Lenders and each party as notified the Agent by facsimile or
telephone, that it has taken such action.
IN WITNESS WHEREOF, the Borrowers, the Subsidiary Obligors, the Lenders and
the Agent have executed this Agreement as of the date first above written.
AGRIBRANDS INTERNATIONAL, INC.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
AGRIBRANDS CANADA, INC.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA ITALIA, S.P.A.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA ESPANA, S.A.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA HUNGARIA ANIMAL FEED PRODUCTION & TRADING COMPANY, LTD.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA KOREA, INC.
as a Borrower and Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
INDUSTRIAS PURINA S.A. DE C.V.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA COLOMBIANA S.A.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
AGRIBRANDS PURINA DO BRASIL, LTDA.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA PHILIPPINES, INC.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA VENEZUELA, C.A.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
ABN AMRO BANK N.V.
as the Agent, an Issuing Lender,
and as a Lender
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Group Vice President
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Group Vice President, Chicago Branch
Notice Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: _________________
Telephone No.: 312/904-_____
Facsimile No.: 312/904-______
Payment Address for Dollars: Same as above.
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Authorized Agent
Notice Address:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx Xxxxx 0000, 0-00
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Payment Address for Dollars: Same as above.
THE BANK OF NOVA SCOTIA,
as Documentation Agent and as a Lender
By: /s/ F.C.H. Xxxxx
Name: F.C.H. Xxxxx
Title: Senior Manager - Loan Operations
Notice Address:
The Bank of Nova Scotia -- Atlanta Agency
000 Xxxxxxxxx Xxxxxx XX -- Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Mr. Xxxxxx Xxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Payment Address for Dollars: Same as above.
CREDIT LYONNAIS, CHICAGO BRANCH.
as Syndication Agent and as a Lender
By: /s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: First Vice President
Notice Address:
Credit Lyonnais Chicago Branch
000 Xxxx Xxxxxx Xxxxxx 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxx
Telephone No.: 000-000-0000
Facsimile No.: 312-641-0527
Payment Address for Dollars: Same as above.
BANQUE NATIONALE DE PARIS,
as a Lender
By: /s/ Xxxxxx Xxxxxx du Bocage
Name: Xxxxxx Xxxxxx du Xxxxxx
Title: Executive Vice President and General Manager
Notice Address:
000 Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Payment Address for Dollars: Same as above.
THE BANK OF NOVA SCOTIA, SEOUL BRANCH,
as a Lender
By: /s/ X. X. Xxxxx
Name: X.X. Xxxxx
Title: Vice President & Manager
Notice Address:
9th Fl. KCCI Xxxx.
#00, 0-xx, Xxxxxxxxx-xx
Xxxxx-xx, Xxxxx, Xxxxx
Attention: X.X. Xxxxx
Telephone No.: 00-000-0000
Facsimile No.: 00-000-0000
Payment Address for Dollars: Same as above.
EXHIBIT A
TO
LONG TERM CREDIT AGREEMENT
COMMITMENTS
Lender . . . . . . . . . . . . . . Amount of Commitment % of Aggregate Commitment
---------------------------------- --------------------------- --------------------------
ABN AMRO Bank N.V. . . . . . . . . $ 15,000,000 27.000000000%
The Bank of Nova Scotia. . . . . . $ 13,750,000 25%
Credit Lyonnais. . . . . . . . . . $ 13,750,000 25%
The First National Bank of Chicago $ 7,500,000 13.636363636%
Banque Nationale de Paris. . . . . $ 5,000,000 9.09090909%
TOTAL. . . . . . . . . . . . . . . $ 55,000,000 100%
----------------------------------
EXHIBIT B
TO
LONG TERM CREDIT AGREEMENT
[RESERVED]
----------
EXHIBIT C
TO
LONG TERM CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
---------------------------------
Pursuant to [Section 4.2] [Section 6.1(A)(iii)] of the Long Term Credit
----------- -------------------
Agreement (as amended, modified, restated or supplemented from time to time,
the "Credit Agreement"), dated as March 31, 1998, by and among Agribrands
International, Inc. (the "Company"), the Subsidiary Borrowers parties thereto,
the Subsidiary Obligors parties thereto, the financial institutions from time
to time party thereto (the "Lenders"), and ABN AMRO Bank N.V., as contractual
representative for itself and the other Lenders, the Company, through its
___________________________, hereby delivers to the Agent[, together with the
financial statements being delivered to the Agent pursuant to Section 6.1(A)
--------------
of the Credit Agreement,] this Compliance Certificate (the "Certificate") [for
the accounting period from ____________, 19__ to ___________, 19__].
Capitalized terms used herein shall have the meanings set forth in the Credit
Agreement. Subsection references herein relate to subsections of the Credit
Agreement.
I. MANDATORY PREPAYMENTS (Section 2.2(B))
---------------
A. Section 2.2(B)
---------------
(1) State whether the Dollar Amount of the Revolving Credit Obligations
exceeds 105% of the Aggregate Commitment. Yes/No
(2) If the answer to question (1) is yes, state the amount, if required,
of any mandatory prepayment on Schedule A.
-----------
II. FINANCIAL COVENANTS
A. MINIMUM INTEREST COVERAGE RATIO (Section 6.4(A))
---------------
1. EBITDA (net sales - cost of products sold -
selling, general and administrative expenses +
depreciation + amortization) for the period
from _______ to ________ $___________
2. Cash Interest Expense (as defined) for the period
from _______ to ________ $___________
3. "Interest Coverage" (Ratio of (1) to (2)) TO 1.0
B. MAXIMUM LEVERAGE RATIO (Section 6.4(B))
---------------
1. Total Debt (as defined) $___________
2. EBITDA (as determined under item II(A) above)
$___________
3. "Leverage Ratio" (Ratio of (1) to (2)) TO 1.0
C. CAPITAL EXPENDITURES (Section 6.4(C)).
---------------
State whether Capital Expenditures (as defined) was less than
or equal to [$_______] as at the end of the most recently
completed fiscal year. Yes/No
------
D. MINIMUM CONSOLIDATED NET WORTH
(Section 6.4(D)).
---------------
State whether Consolidated Net Worth (as defined)
was greater than [$________] at all times for the period
from __________ to __________ Yes/No
------
E. COUNTRY DEBT LIMITATIONS (Section 6.4(E))
---------------
1. State whether the Borrowers or Subsidiary Obligors
incurred Indebtedness under the Credit Agreement
in excess of the maximum Dollar Amount set forth
below:
Borrower's or Subsidiary Obligor's
Jurisdiction of Incorporation Maximum Dollar Amount
---------------------------------- ----------------------
Canada . . . . . . . . . . . . . . $ 6,500,000
---------------------------------- ----------------------
United States. . . . . . . . . . . $ 5,000,000
---------------------------------- ----------------------
Italy. . . . . . . . . . . . . . . $ 4,000,000
----------------------
Spain. . . . . . . . . . . . . . . $ 2,500,000
----------------------
Hungary. . . . . . . . . . . . . . $ 2,000,000
----------------------
Korea. . . . . . . . . . . . . . . $ 15,000,000
---------------------------------- ----------------------
Mexico . . . . . . . . . . . . . . $ 5,000,000
----------------------
Colombia . . . . . . . . . . . . . $ 5,000,000
----------------------
Brazil . . . . . . . . . . . . . . $ 5,000,000
----------------------
Philippines. . . . . . . . . . . . $ 2,500,000
----------------------
Venezuela. . . . . . . . . . . . . $ 2,500,000
---------------------------------- ----------------------
Yes/No
2. State whether (x) the ratio of (i) Total Debt (as defined, including
Indebtedness owed to Affiliates but excluding Contingent Obligations in the
form of standby Letters of Credit issued under the Credit Agreement for the
account of such Subsidiary Borrower or Subsidiary Obligor for the benefit of
domestic financial institutions as support for loans and advances made by such
financial institutions to the applicable Subsidiary Borrower or Subsidiary
Obligor to the extent any such loans or advances are outstanding) to (ii)
EBITDA (as determined under item IIA above) for each of the Subsidiary
Borrowers and Subsidiary Obligors (other than Purina Korea, Inc.) at any time
exceeded 3.00 to 1.00 or (y) the ratio of (i) Total Debt (as defined,
including Indebtedness owed to Affiliates but excluding Contingent Obligations
in the form of standby Letters of Credit issued under the Credit Agreement for
the account of Purina Korea, Inc. for the benefit of domestic financial
institutions as support for loans and advances made by such financial
institutions to Purina Korea, Inc. to the extent any such loans and advances
are outstanding) to (ii) EBITDA (as determined under item IIA above) for
Purina Korea, Inc. at any time exceeded 2.25 to 1.00.
Yes/No
The Company hereby certifies, through its _________________, that the
information set forth above is accurate as of _______________, ____, to the
best of such officer's knowledge, after diligent inquiry, and that the
financial statements delivered herewith present fairly the financial position
of the Company and its Subsidiaries at the dates indicated and the results of
their operations and changes in their financial position for the periods
indicated in conformity with Agreement Accounting Principles, consistently
applied.
Dated: ______________, ____
AGRIBRANDS INTERNATIONAL, INC.
By:________________________________
Name:
Title:
EXHIBIT D
TO
LONG TERM CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
------------------------------------------------
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") between (the
ASSIGNOR) and (the "ASSIGNEE") is dated as of,. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Long Term Credit
---------------------
Agreement (which, as it may be amended, restated, supplemented, modified,
renewed or extended from time to time is herein called the "CREDIT AGREEMENT")
described in Item 1 of Schedule 1 attached hereto ("SCHEDULE 1"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
-------------------------
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans,
if the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
--------------
(the "EFFECTIVE DATE") shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the
Agent) after a Notice of Assignment substantially in the form of Appendix I
----------
(attached hereto) has been delivered to the Agent. Such Notice of Assignment
must include the consents, if any, required to be delivered to the Agent by
Section 12.3(A) of the Credit Agreement. In no event will the Effective Date
--------------
occur if the payments required to be made by the Assignee to the Assignor on
the Effective Date under Sections 4 and 5 hereof are not made on the proposed
----------------
Effective Date. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the rights and
obligations of a Lender under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
--------------------
shall be entitled to receive from the Agent all payments of principal,
interest and fees with respect to the interest assigned hereby. The Assignee
shall advance funds directly to the Agent with respect to all Loans and
reimbursement payments made on or after the Effective Date with respect to the
interest assigned hereby. [In consideration for the sale and assignment of
Loans hereunder, (i) the Assignee shall pay the Assignor, on the Effective
Date, an amount equal to the principal amount of the portion of all Base Rate
Loans assigned to the Assignee hereunder and (ii) with respect to each
Eurodollar Loan and Korean Eurodollar Loan made by the Assignor and assigned
to the Assignee hereunder which is outstanding on the Effective Date, (a) on
the last day of the Interest Period therefor or (b) on such earlier date
agreed to by the Assignor and the Assignee or (c) on the date on which any
such Eurodollar Loan and Korean Eurodollar Loan either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the
------------ --- ---
"PAYMENT DATE"), the Assignee shall pay the Assignor in Dollars an amount
equal to the principal amount of the portion of such Eurodollar Rate Loan or
Korean Eurodollar Loan, as applicable, assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that
the Payment Date for such Eurodollar Loan or Korean Eurodollar Loan shall be
the Effective Date, they shall agree to the interest rate applicable to the
portion of such Loan assigned hereunder for the period from the Effective Date
to the end of the existing Interest Period applicable to such Eurodollar Rate
Loan or Korean Eurodollar Loan (the "AGREED INTEREST RATE") and any interest
received by the Assignee in excess of the Agreed Interest Rate shall be
remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the
applicable Borrower with respect to any Eurodollar Loan or Korean Eurodollar
Loan sold by the Assignor to the Assignee hereunder, the Assignee shall pay to
the Assignor interest for such period on the portion of such Eurodollar Loan
or Korean Eurodollar Loan sold by the Assignor to the Assignee hereunder at
the applicable rate provided by the Credit Agreement. In the event a
prepayment of any Eurodollar Loan or Korean Eurodollar Loan which is existing
on the Payment Date and assigned by the Assignor to the Assignee hereunder
occurs after the Payment Date but before the end of the Interest Period
applicable to such Eurodollar Loan or Korean Eurodollar Loan, the Assignee
shall remit to the Assignor the excess of the prepayment penalty paid with
respect to the portion of such Eurodollar Loan or Korean Eurodollar Loan
assigned to the Assignee hereunder over the amount which would have been paid
if such prepayment penalty was calculated based on the Agreed Interest Rate.
The Assignee will also promptly remit to the Assignor (i) any principal
payments received from the Agent with respect to Eurodollar Loans or Korean
Eurodollar Loan prior to the Payment Date and (ii) any amounts of interest on
Loans and fees received from the Agent which relate to the portion of the
Loans assigned to the Assignee hereunder for periods prior to the Effective
Date, in the case of Base Rate Loans or fees, or the Payment Date, in the case
of Eurodollar Loans or Korean Eurodollar Loan, and not previously paid by the
Assignee to the Assignor.] EACH ASSIGNOR MAY INSERT ITS STANDARD PAYMENT
PROVISIONS IN LIEU OF THE PAYMENT TERMS INCLUDED IN THIS EXHIBIT. In the
event that either party hereto receives any payment to which the other party
hereto is entitled under this Assignment Agreement, then the party receiving
such amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The [Assignee shall pay to the
--------------------------------
Assignor a fee on each day on which a payment of interest or commitment fees
is made under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or commitment fees for
the period prior to the Effective Date or, in the case of Eurodollar Loans or
Korean Eurodollar Loan, the Payment Date, which the Assignee is obligated to
deliver to the Assignor pursuant to Section 4 hereof). The amount of such fee
shall be the difference between (i) the interest or fee, as applicable, paid
with respect to the amounts assigned to the Assignee hereunder and (ii) the
interest or fee, as applicable, which would have been paid with respect to the
amounts assigned to the Assignee hereunder if each interest rate was of 1%
less than the interest rate paid by the Borrowers or if the commitment fee was
___ of 1% less than the commitment fee paid by the Borrowers, as applicable.
In addition, the] [Assignee][Assignor] agrees to pay a $3,500 processing fee
required to be paid to the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
--------------------------------------------------------------
LIABILITY. The Assignor represents and warrants that it is the legal and
--------
beneficial owner of the interest being assigned by it hereunder and that such
---
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor,
the Agent, nor any other Lender, nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution,
legality, validity, enforceability, genuineness, sufficiency or collectability
of any Loan Document, including without limitation, documents granting the
Assignor, Agent and the other Lenders a security interest in assets of the
Company, any Subsidiary Borrower or any Subsidiary Obligor or any guarantor,
(ii) any representation, warranty or statement made in or in connection with
any of the Loan Documents, (iii) the financial condition or creditworthiness
of the Company, any Subsidiary Borrower or any Subsidiary Obligor or any
guarantor, (iv) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (v) inspecting any of the property,
books or records of the Company, any Subsidiary Borrower or any Subsidiary
Obligor, (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or (vii) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
-------------------------------
it has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Loan Documents, (iii) appoints and authorizes
the Agent to take such action as contractual representative on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto, (iv) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, including, without limitation, making Loans to
Purina Korea, Inc. in Korean Won, (v) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vi)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as
defined under ERISA and that its rights, benefits and interests in and under
the Loan Documents will not be "plan assets" under ERISA, [and (vii) attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying that the Assignee is entitled to receive payments under the Loan
Documents without deduction or withholding of any United States federal income
taxes]. TO BE INSERTED IF THE ASSIGNEE IS NOT INCORPORATED UNDER THE LAWS OF
THE UNITED STATES, OR A STATE THEREOF.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
---------
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
----------------------
have the right pursuant to Section 12.3(A) of the Credit Agreement to assign
---------------
the rights which are assigned to the Assignee hereunder to any entity or
person, provided that (i) any such subsequent assignment does not violate any
of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee is
not thereby released from its obligations to the Assignor hereunder, if any
remain unsatisfied, including, without limitation, its obligations under
[Sections 4, 5 and 8] hereof.
-------------------
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
-------------------------------------
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
----------------
of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between
the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by and
-------------
interpreted and enforced in accordance with the internal laws of the State of
Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
-------
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:
Name:
Title
[NAME OF ASSIGNEE]
By:
Name:
Title
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
LONG TERM CREDIT AGREEMENT DATED AS OF MARCH 31, 1998 AMONG AGRIBRANDS
INTERNATIONAL, INC. (THE "COMPANY"), THE SUBSIDIARY BORROWERS PARTIES THERETO,
THE SUBSIDIARY OBLIGORS PARTIES THERETO, THE INSTITUTIONS FROM TIME TO TIME
PARTY THERETO AS LENDERS (THE "LENDERS"), AND ABN AMRO BANK N.V., AS
CONTRACTUAL REPRESENTATIVE ON BEHALF OF THE LENDERS.
2. Date of Assignment Agreement:,
3. Amounts to be Assigned AMOUNTS TO BE DESCRIBED IN DOLLARS OR KOREAN
WON, AS APPLICABLE. (As of Date of Item 2 above):
REVOLVING LOAN
FACILITY
-----------------------------------------------------
TOTAL OF COMMITMENTS (LOANS) UNDER THE CREDIT
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . $
----------------------------------------------------- -
ASSIGNEES PERCENTAGE OF FACILITY PURCHASED UNDER THE
ASSIGNMENT AGREEMENT
___%
-----------------------------------------------------
AMOUNT OF ASSIGNED SHARE OF FACILITY UNDER THE
ASSIGNMENT AGREEMENT. . . . . . . . . . . . . . . . . $
4. Assignee's Aggregate (Loan
Amount)** Commitment Amount
Purchased Hereunder: $
5. Proposed Effective Date: _________ __, ____
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Name: Name:
Title: Title:
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
APPENDIX I
to Assignment Agreement
NOTICE
OF ASSIGNMENT
--------------
APPENDIX I to Assignment Agreement NOTICE OF ASSIGNMENT
-------------
, 19
To: ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: [_______]
Telephone No.: 312/[________]
Facsimile No.: 312/[________]
AGRIBRANDS INTERNATIONAL, INC.
0000 Xxxxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: [_____________________]
Telephone No.: ___-___-____
Facsimile No.: ___-___-____
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Long Term Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to the Agent pursuant to Section 12.3(B) of the Credit Agreement.
----------------
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of, 19 (the "Assignment"), pursuant to which, among other
things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to
the facilities listed in Item 3 of Schedule 1. The Effective Date of the
Assignment shall be the later of the date specified in Item 5 of Schedule 1 or
two Business Days (or such shorter period as agreed to by the Agent) after
this Notice of Assignment and any consents and fees required by Sections
--------
12.3(A) and 12.3(B) of the Credit Agreement have been delivered to the Agent,
-- -------
provided that the Effective Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to each Borrower and the
Subsidiary Obligors and the Agent notice of the assignment and delegation
referred to herein. The Assignor will confer with the Agent before the date
specified in Item 5 of Schedule 1 to determine if the Assignment Agreement
will become effective on such date pursuant to Section 3 hereof, and will
confer with the Agent to determine the Effective Date pursuant to Section 3
hereof if it occurs thereafter. The Assignor shall notify the Agent if the
Assignment Agreement does not become effective on any proposed Effective Date
as a result of the failure to satisfy the conditions precedent agreed to by
the Assignor and the Assignee. At the request of the Agent, the Assignor
will give the Agent written confirmation of the satisfaction of the conditions
precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before
the Effective Date the processing fee of $3,500 required by Section 12.3(B) of
---------------
the Credit Agreement.
6. If notes evidencing the Borrowers' Obligations to the Assignor are
outstanding on the Effective Date, the Assignor and the Assignee request and
direct that the Agent prepare and cause the Borrowers to execute and deliver
new notes or, as appropriate, replacements notes, to the Assignor and the
Assignee. The Assignor and, if applicable, the Assignee each agree to deliver
to the Agent the original notes received by it from the Borrowers upon its
receipt of new notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its contractual
representative under the Loan Documents in accordance with the terms thereof.
The Assignee acknowledges that the Agent has no duty to supply information
with respect to any Borrower, any Subsidiary Obligor or the Loan Documents to
the Assignee until the Assignee becomes a party to the Credit Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Name: Name:
Title: Title:
ACKNOWLEDGED AND CONSENTED TO:
ABN AMRO BANK N.V., as Agent
By:
Name:
Title:
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT E
TO
LONG TERM CREDIT AGREEMENT
LIST OF CLOSING DOCUMENTS
----------------------------
[Attached]
$110,000,000
CREDIT FACILITIES
TO
AGRIBRANDS INTERNATIONAL, INC.
and certain Subsidiaries thereof
March 31, 1998
LIST OF CLOSING DOCUMENTS CAPITALIZED TERMS USED HEREIN AND NOT DEFINED
-------------------------
HEREIN SHALL HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN THE CREDIT AGREEMENT.
-----
BOLD/ITALICIZED DOCUMENTS TO BE PREPARED AND/OR PROVIDED BY THE BORROWER
AND/OR BORROWER'S COUNSEL.
A. LOAN AND SECURITY DOCUMENTS
------------------------------
Credit Agreement ("Short Term Credit Agreement") among Agribrands
International, Inc., a Missouri corporation (the "Company"), the Subsidiary
Borrowers parties thereto, the Subsidiary Obligors parties thereto, the
financial institutions from time to time party thereto (collectively, the
"Lenders") and ABN AMRO Bank N.V., in its capacity as contractual
representative (the "Agent") for the Lenders, evidencing a 364-day $55,000,000
revolving credit facility to the Company, the Subsidiary Borrowers and the
Subsidiary Obligors from the Lenders.
Credit Agreement ("Long Term Credit Agreement", and, together with
the Short Term Credit Agreement, the "Credit Agreements") among the Company,
the Subsidiary Borrowers parties thereto, the Subsidiary Obligors parties
thereto, the Lenders and the Agent, evidencing a three-year $55,000,000
revolving credit facility to the Company, the Subsidiary Borrowers and the
Subsidiary Obligors from the Lenders.
Pledge Agreements from the Company to the Agent evidencing the
Borrower's pledge of (i) 65% of the Capital Stock of each of the Subsidiary
Borrowers and Subsidiary Obligors as security for the Obligations under each
of the Credit Agreements and (ii) 100% of the Capital Stock of each of the
Subsidiary Borrowers and Subsidiary Obligors as security for the Obligations
under each of the Credit Agreements of the other Subsidiary Borrowers and
Subsidiary Obligors and (iii) 100% of the Capital Stock of AgriInternational
Holdings, Inc., a Delaware corporation ("Holdings") as security for the
Obligations under each of the Credit Agreements, together with STOCK
CERTIFICATES and stock powers duly executed in blank.
Guarantee executed by the Company in favor of the Agent, guarantying
all of the Obligations of each of the Subsidiary Borrowers and Subsidiary
Obligors under the Credit Agreements.
Guarantee executed by Holdings in favor of the Agent, guarantying
all of the Obligations under the Credit Agreement.
Guarantee executed by each of the Subsidiaries of the Company listed
on Appendix A hereto in favor of the Agent, guarantying all of the Obligations
of each of the other Subsidiary Borrowers and Subsidiary Obligors under the
Credit Agreements.
Contribution Agreement executed by each of the Subsidiaries of the
Company listed on Appendix A hereto.
B. CORPORATE DOCUMENTS
--------------------
Certificate of the Secretary of the Company certifying (i)
resolutions of the Board of Directors of the Company approving and authorizing
the execution, delivery and performance of each document to which it is a
party, (ii) that there have been no changes in the Articles of Incorporation
of the Company since the date of the most recent certification thereof by the
Secretary of State of Missouri delivered to the Agent, (iii) the names and
true signatures of the incumbent officers of the Company authorized to sign
the documents to which it is a party, and (iv) the By-laws (attached thereto)
of the Company as in effect on the date of such certification.
Articles of Incorporation of the Company certified by the Secretary
of State of Missouri.
Good Standing Certificate for the Company from the offices of the
Secretary of State of Missouri.
Certificate of the Secretary of each of the Subsidiaries of the
Company listed on Appendix A hereto certifying (i) resolutions of the
governing board of each such Subsidiary approving and authorizing the
execution, delivery and performance of each document to which it is a party,
(ii) that there have been no changes in the constitutive agreements of such
Subsidiary since the date of the most recent certification thereof by the
appropriate Governmental Authority of its jurisdiction of incorporation
delivered to the Agent, (iii) the names and true signatures of the incumbent
officers of such Subsidiary authorized to sign the documents to which it is a
party, and (iv) the by-laws (attached thereto) of such Subsidiary as in effect
on the date of such certification.
Constitutive Agreements of each Subsidiary of the Company listed on
Appendix A hereto certified by the appropriate Governmental Authority of its
respective jurisdiction of incorporation.
C. LEGAL OPINIONS
---------------
Opinion of U.S. counsel to the Borrowers and Holdings in form and
substance satisfactory to the Agent: Xxxxx Xxxx L.L.P.
Opinion of foreign counsel to the Borrowers and Subsidiary Obligors
in form and substance satisfactory to the Agent in each of the jurisdictions
indicated below:
x. Xxxxxxx Xxxxxxxx, Xxxx & Xxxxxx [CANADA]
x. Xxxxx X. Xxxxxxx [ITALY]
c. Price Waterhouse, Edifici Caga De Madrid [SPAIN]
d. Burai-Xxxxxx & Partners [HUNGARY]
x. Xxx & Xxxxx [KOREA]
x. Xxxxx, Xxxxxx-Xxxxxxx Y Xxxxxxxxxx [MEXICO]
x. Xxxxxxxx & Xxxxxxxx [COLUMBIA]
x. Xxxxxxxx X. Xxxxxxx [BRAZIL]
i. Platon, Martinez, San Xxxxx & Xxxxx [PHILLIPPINES]
x. Xxxxxx Plaz & Xxxxxx [VENEZUELA]
D. CLOSING CERTIFICATES AND MISCELLANEOUS
-----------------------------------------
Pledged Account Agreement in respect of the Company's cash
collateral account, executed by each of the Company, the Agent and ABN Amro
Bank N.V.
Notice of Borrowing.
Officer's No-Default Certificate.
E. POST- CLOSING ITEMS
---------------------
APPENDIX A
LIST OF SUBSIDIARIES
----------------------
AgriInternational Holdings, Inc., a Delaware corporation
Agribrands Canada, Inc., a company organized under the federal laws of Canada
Purina Italia, S.p.A., a company organized under the laws of Italy
Purina Espana, S.A., a company organized under the laws of Spain
Purina Hungaria Animal Feed Production & Trading Company, Ltd., a company
organized under the laws of Hungary
Purina Korea, Inc., a corporation organized under the laws of the Republic of
Korea
Industrias Purina S.A. de C.V., a company organized under the laws of Mexico
Purina Colombiana S.A., a company organized under the laws of Colombia
Agribrands Purina do Brasil, Ltda., a company organized under the laws of
Brazil
Purina Philippines, Inc., a corporation organized under the laws of the
Philippines
Purina de Venezuela, C.A., a company organized under the laws of Venezuela
EXHIBIT F
TO
LONG TERM CREDIT AGREEMENT
Form of Officer's Certificate
--------------------------------
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify that I am the of Agribrands
International, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"). Capitalized terms used herein and
not otherwise defined herein are as defined in that certain Long Term Credit
Agreement dated as of March 31, 1998, among the Company, the Subsidiary
Borrowers parties thereto, the Subsidiary Obligors parties thereto, the
financial institutions from time to time parties thereto as lenders (the
"Lenders"), ABN AMRO Bank N.V., in its capacity as contractual representative
for itself and the other Lenders (the "Agent") (as amended, restated,
supplemented or modified from time to time, the "Credit Agreement").
I further certify on behalf of the Company, that as of the date hereof,
to the best of my knowledge, after diligent inquiry of all relevant persons at
the Company and its Subsidiaries, (i) the representations and warranties of
the Borrowers and the Subsidiary Obligors contained in Article V of the Credit
---------
Agreement shall have been true and correct at all times during the period
commencing on __________, 19__ and ending on _____________, 19__ and as of the
date of this Officer's Certificate and (ii) as of the date of this Officer's
Certificate no Default or Unmatured Default exists [other than the following
(describe the nature of the Default or Unmatured Default and the status
thereof)].
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the Company
on this ____ day of ___________, ____.
____________________________
[Insert Name of Officer]
EXHIBIT G
TO
LONG TERM CREDIT AGREEMENT
Financial Statements
[Attached].
EXHIBIT H
TO
CREDIT AGREEMENT
FORM OF REQUEST FOR LETTER OF CREDIT
------------------------------------------
TO: INSERT NAME OF ISSUING BANK., an Issuing Bank under that certain
Long Term Credit Agreement dated as of March 31, 1998 (the "Credit Agreement")
by and among Agribrands International, Inc. (the "Company"), the Subsidiary
Borrowers parties thereto, the Subsidiary Obligors parties thereto, the
financial institutions from time to time parties thereto (the "Lenders"), and
ABN AMRO Bank N.V., as contractual representative (the "Agent") for the
Lenders (such Credit Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement")
and
ABN AMRO BANK N.V., as Agent
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: [________]
Telecopier: 312-[_______]
Confirmation: 312-[______]
Pursuant to Section 2.16 of the Credit Agreement, the undersigned hereby
gives to the Issuing Bank a request for issuance of a [standby] [commercial]
Letter of Credit on behalf of the undersigned for the benefit ofINSERT NAME OF
BENEFICIARY., in the amount of [US $] [_____________ Korean Won], with an
effective date of ___________________, ____ (the "Effective Date") and an
expiry date of ___________, ____. [Provide description of documents and terms
in connection with commercial Letter of Credit].
The undersigned hereby certifies that (i) the representations and
warranties of the undersigned contained in Article V of the Credit Agreement
are and shall be true and correct in all material respects on and as of the
date hereof and on and as of the Effective Date; (ii) no Default or Unmatured
Default has occurred and is continuing on the date hereof or on the Effective
Date or will result from the issuance of the proposed Letter of Credit; and
(iii) the conditions set forth in Sections 2.16 and 4.2 of the Credit
Agreement have been satisfied.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Request for Letter of Credit.
Dated:,
[______________________]
By:
Name:
Title:
EXHIBIT I
TO
CREDIT AGREEMENT
FORM OF LETTER OF CREDIT
------------------------
[BENEFICIARY]
________________
________________
Re: Irrevocable Letter of Credit No., dated __________.
Dear [BENEFICIARY]:
[_______________________] (the "Issuer") hereby issues in favor of you,
[_______________], this irrevocable letter of credit ("Letter of Credit") for
an amount (the "Maximum Amount") of [U.S. $____________][______________ Korean
Won], effective immediately, which Maximum Amount will be reduced by the
amount of any payments made hereunder. Reference is hereby made to that
certain Long Term Credit Agreement, dated as of March 31, 1998, by and among
Agribrands International, Inc., a Missouri corporation (the "Company"), the
Subsidiary Borrowers parties thereto, the Subsidiary Obligors parties thereto,
the financial institutions from time to time parties thereto (the "Lenders"),
and ABN AMRO Bank N.V., as contractual representative (the "Agent") on behalf
of the Lenders (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.
The Issuer will honor one or more of your drafts drawn on the Issuer in
accordance with the terms set forth herein in an amount not in excess of the
Maximum Amount upon presentation prior to the Termination Date (as defined
below) of [(a) a draft in the form of Exhibit I attached hereto and made a
---------
part hereof, executed by you and (b) the original of this Letter of Credit
[and (c) _______________________________________________]] [your tested telex
stating the drawing amount and certifying that the amount claimed represents
amounts past due and outstanding under the facility granted by you to
[________________]].
Multiple drafts may be drawn under this Letter of Credit but the Maximum
Amount of this Letter of Credit will be permanently reduced by the amount of
any such draft. Presentation of the documents required for payment under this
Letter of Credit may be made by you prior to the expiration hereof at any time
during the Issuer's business hours at [_____________________________].
Provided that such documents and your presentation thereof conform to the
terms and conditions hereof, payment shall be made to you of the amount
demanded, in immediately available funds, not later than 3:00 p.m. (New York
time) three (3) business days following the presentment of the required
documents. If a demand for payment made by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, the
Issuer shall give you prompt notice that the purported negotiation was not
effected in accordance with the terms and conditions of this Letter of Credit,
stating the reasons therefor and that the Issuer is holding any documents at
your disposal or is returning the same to you, as the Issuer may elect. Upon
being notified that the proposed negotiation was not effected in accordance
with this Letter of Credit, you may attempt to correct any such non-conforming
demand for payment, if, and to the extent that, you are able to do so,
provided that any re-submission of documents shall be made not less than two
(2) business days prior to the expiration hereof.
This Letter of Credit shall expire at 5:00 p.m. (New York time) on
[______________] the "Termination Date").
This Letter of Credit is subject to the terms and conditions of the
Uniform Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce Publication No. 500, as amended or revised
from time to time ("Uniform Customs"), such amendments or revisions to be
controlling herein as of the official date of the effectiveness of such
amendments or revisions, as announced by the International Chamber of
Commerce. As to matters not governed by the Uniform Customs, the Letter of
Credit shall be deemed to be a contract made under the laws of the State of
New York and shall be governed and construed in accordance with the laws of
the State of New York. This Letter of Credit is not transferable in whole or
in part.
We undertake that your drafts drawn and presented on or before the time
of expiration of this Letter of Credit in conformity with the terms of this
Letter of Credit will be duly honored. Each draft must be marked "Drawn under
Irrevocable Letter of Credit No., dated [______________].
Very truly yours,
[______________________________]
By: ____________________
Name:
Title:
EXHIBIT "I"
to
IRREVOCABLE LETTER OF CREDIT NO.
Dated as of [_____________]
SIGHT DRAFT
------------
[DATE]
To: [ISSUER and ISSUER's Address]
Attention:
From: [BENEFICIARY]
Upon sight hereof, pay to the order of [__________________], the amount
of [U.S. $_____________][___________ Korean Won] in immediately available
funds, by remitting said amount to his account number ___________ at
______________________________, which amount is now due and payable by [NAME
OF BORROWER OR SUBSIDIARY OBLIGOR] to the undersigned and has not been paid.
This draft is drawn under Irrevocable Letter of Credit No., dated
[______________________].
(Name)
e Borrowers'
Assignor and Assignee to insert applicable payment terms.
S-105
EXECUTION COPY
SHORT TERM CREDIT AGREEMENT
Dated as of March 31, 1998
among
AGRIBRANDS INTERNATIONAL, INC.
THE SUBSIDIARY BORROWERS AND SUBSIDIARY OBLIGORS
FROM TIME TO TIME PARTY HERETO,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS,
and
ABN AMRO BANK N.V.,
as Agent
and
CREDIT LYONNAIS CHICAGO BRANCH,
as Syndication Agent
and
THE BANK OF NOVA SCOTIA,
as Documentation Agent
TABLE OF CONTENTS
-----------------
PAGE
----------------------------------------------------------------------------------------
ARTICLE I: DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Currency Equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II: THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1 Revolving Loans to the Company and the Subsidiary Borrowers . . . . . . . . . . . . 20
2.2 Prepayments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.3 Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.4 Method of Selecting Types and Interest Periods for Advances; Determination of
Applicable Margins, Interest on Advances to Purina Korea, Inc. . . . . . . . . . . . . . 22
(a) Method of Selecting Types and Interest Periods for Advances . . . . . . . . . . . . 22
(b) Determination of Applicable Margins, Applicable Letter of Credit Fee and
Applicable Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5 Minimum Amount of Each Advance. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.6 Method of Selecting Types and Interest Periods for Conversion and Continuation
of Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(A) Right to Convert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(B) Automatic Conversion and Continuation . . . . . . . . . . . . . . . . . . . . . . . 26
(C) No Conversion Post-Default or Post-Unmatured Default. . . . . . . . . . . . . . . . 26
(D) Conversion/Continuation Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.7 Default Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.8 Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.9 Evidence of Debt; Telephonic Notices. . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee Basis;
Taxes; Loan and Control Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(A) Promise to Pay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(B) Interest Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(C) Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(D) Interest and Fee Basis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(E) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(F) Loan Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(G) Entries Binding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.11 Notification of Advances, Interest Rates, Prepayments and Aggregate
Commitment Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.12 Lending Installations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.13 Non-Receipt of Funds by the Agent. . . . . . . . . . . . . . . . . . . . . . . . . 32
2.14 Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.15 Replacement of Certain Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.16 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.17 Letter of Credit Participation . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.18 Reimbursement Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.19 Cash Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.20 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.21 Indemnification; Exoneration . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.22 Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.23 Currency Disruption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.24 Termination Date Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III: CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.1 Yield Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Changes in Capital Adequacy Regulations . . . . . . . . . . . . . . . . . . . . . . 40
3.3 Availability of Types of Advances . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.4 Funding Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.5 Lender Statements; Survival of Indemnity. . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV: CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.1 Initial Advances and Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . 42
4.2 Each Advance and Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V: REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 43
5.1 Organization; Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.3 No Conflict; Governmental Consents. . . . . . . . . . . . . . . . . . . . . . . . . 43
5.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(A) Tax Examinations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(B) Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.7 Litigation; Loss Contingencies and Violations . . . . . . . . . . . . . . . . . . . 45
5.8 Subsidiaries; Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.10 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.11 Securities Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.12 Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.14 Assets and Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.15 Statutory Indebtedness Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 47
5.16 Post-Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.17 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.18 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.19 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.20 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.22 Foreign Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI: COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.1 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(A) Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(B) Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(C) Lawsuits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(D) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(E) ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(F) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(G) Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(H) Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(I) Environmental Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(J) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.2 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(A) Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(B) Corporate Powers; Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . 53
(C) Compliance with Laws, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(D) Payment of Taxes and Claims; Tax Consolidation. . . . . . . . . . . . . . . . . . . 54
(E) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(F) Inspection of Property; Books and Records; Discussions. . . . . . . . . . . . . . . 54
(G) ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(H) Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(I) Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(J) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(K) Foreign Employee Benefit Compliance . . . . . . . . . . . . . . . . . . . . . . . . 55
6.3 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(A) Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(B) Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(C) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(D) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(E) Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(F) Restricted Junior Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(G) Conduct of Business; Subsidiaries; Acquisitions . . . . . . . . . . . . . . . . . . 59
(H) Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . 59
(I) Sales and Leasebacks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(J) Margin Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(K) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(L) Issuance of Equity Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(M) Organizational Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(N) Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(O) Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(P) Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(Q) Subsidiary Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.4 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(A) Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(B) Maximum Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(C) Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(D) Minimum Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(E) Country Debt Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VII: DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.1 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.1 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
(a) Termination of Commitments; Acceleration. . . . . . . . . . . . . . . . . . . . . . 66
(b) Rescission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(c) Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.2 Defaulting Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.3 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.4 Preservation of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE IX: GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.2 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.3 Performance of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.7 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(A) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(B) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(C) Waiver of Certain Claims; Settlement of Claims. . . . . . . . . . . . . . . . . . . 71
(D) Survival of Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.8 Numbers of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.9 Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.11 Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL. . . . . . . . . . . . . . 72
(A) JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(B) OTHER JURISDICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(C) VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(D) WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.14 Subordination of Intercompany Indebtedness . . . . . . . . . . . . . . . . . . . . 74
9.15 No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE X: THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.1 Appointment; Nature of Relationship. . . . . . . . . . . . . . . . . . . . . . . . 75
10.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.4 No Responsibility for Loans, Creditworthiness, Collateral, Recitals, Etc.. . . . . 75
10.5 Action on Instructions of Lenders. . . . . . . . . . . . . . . . . . . . . . . . . 76
10.6 Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.8 The Agent's Reimbursement and Indemnification. . . . . . . . . . . . . . . . . . . 76
10.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.10 Lender Credit Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.11 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.12 Collateral Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE XI: SETOFF; RATABLE PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.2 Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.3 Application of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.4 Relations Among Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. . . . . . . . . . . . . 79
12.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(A) Permitted Participants; Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(B) Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(C) Benefit of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.3 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(A) Permitted Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(B) Effect; Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(C) The Register. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.4 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.5 Dissemination of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE XIII: NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
13.1 Giving Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
13.2 Change of Address. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XIV: COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
EXHIBITS AND SCHEDULES
EXHIBITS
--------
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B -- [Reserved]
EXHIBIT C -- Form of Compliance Certificate
(Definitions, 4.2, 6.1(A)(iii))
EXHIBIT D -- Form of Assignment Agreement
( 2.15, 12.3)
EXHIBIT E -- List of Closing Documents
( 4.1)
EXHIBIT F -- Form of Officer's Certificate
( 4.2, 6.1(A)(iii))
EXHIBIT G -- Financial Statements
( 5.4(A), 5.18)
EXHIBIT H -- Form of Request for Letter of Credit
( 2.16)
EXHIBIT I -- Form of Letter of Credit
( 2.16)
SCHEDULES
---------
The information presented on each of the following Schedules is dated as of
February 28, 1998.
Schedule 1.1.1 -- Permitted Existing Contingent Obligations
(Definitions)
Schedule 1.1.2 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.3 -- Permitted Existing Investments (Definitions)
Schedule 1.1.4 -- Permitted Existing Liens (Definitions)
Schedule 5.3 -- Conflicts; Governmental Consents ( 5.3)
Schedule 5.7 -- Litigation; Loss Contingencies ( 5.7)
Schedule 5.8 -- Subsidiaries ( 5.8)
Schedule 5.17 -- Insurance ( 5.17, 6.1(D), 6.2(E))
Schedule 5.20 -- Labor Matters; Compensation Agreements ( 5.20)
Schedule 5.21 -- Environmental Matters ( 5.21)
Schedule 6.3(F) -- Restricted Junior Payments
Schedule 6.3(H) -- Transactions with Shareholders and Affiliates
SHORT TERM CREDIT AGREEMENT
This Short Term Credit Agreement dated as of March 31, 1998 is entered
into among AGRIBRANDS INTERNATIONAL, INC., a Missouri corporation, any
SUBSIDIARY BORROWERS and any SUBSIDIARY OBLIGORS (as such terms are defined
herein) which are now or may hereafter become a party hereto from time to
time, the financial institutions from time to time a party hereto as LENDERS,
whether by execution of this Agreement or an assignment and acceptance
pursuant to Section 12.3, ABN AMRO BANK N.V., in its capacity as Agent for
-------------
itself and the other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
--------------------------
1.1 Certain Defined Terms. In addition to the terms defined in other
----------------------
sections of this Agreement, the following terms used in this Agreement shall
have the following meanings, applicable both to the singular and the plural
forms of the terms defined:
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
-----------
transactions, consummated on or after the date of this Agreement, by which the
-----
Company or any Subsidiary of the Company (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise, including,
without limitation, by surrender of or foreclosure on collateral provided by
customers or (ii) directly or indirectly acquires (in one transaction or as of
the most recent transaction in a series of transactions, including, without
limitation, by surrender of or foreclosure on collateral provided by
customers) at least a majority (in number of vote) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the membership,
ownership or other equity interests in a limited liability company or of the
outstanding partnership interests of a partnership.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
-------
of the several Loans made by the Lenders to a Borrower of the same Type and,
in the case of Eurodollar Advances and Korean Eurodollar Advances, for the
same Interest Period.
"AFFECTED LENDER" is defined in Section 2.15 hereof.
---------------- -------------
"AFFILIATE" of any Person means any other Person directly or indirectly
---------
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act) of greater than ten percent (10%) or more of any class of voting Capital
Stock (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person through ownership of Equity
Interests. In addition, each director of a Borrower or any Subsidiary of a
Borrower shall be deemed to be an Affiliate of each Borrower.
"AGENT" means ABN AMRO Bank N.V. in its capacity as contractual
-----
representative for itself and the Lenders pursuant to Article X hereof and any
--- ---------
successor Agent appointed pursuant to Article X hereof.
----------
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
---------------------
Lenders under this Agreement as adjusted from time to time pursuant to the
terms hereof. The initial Aggregate Commitment is Fifty-Five Million and
00/100 Dollars ($55,000,000.00).
"AGREEMENT" means this Short Term Credit Agreement, as it may be amended,
---------
restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
---------------------------------
principles as in effect as of the date of this Agreement in the United States.
If any changes in generally accepted accounting principles are hereafter
required or permitted and are adopted by the Company with the agreement of its
independent certified public accountants and such changes result in a change
in the method of calculation of any of the financial covenants, restrictions
or standards herein or in the related definitions or terms used therein
("Covenant Accounting Changes"), the parties hereto agree to enter into
-------------------------
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Company's consolidated financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, that no Covenant Accounting Change shall be given
-------- -------
effect in such calculations until such provisions are amended in a manner
reasonably satisfactory to the Required Lenders. If such amendment is entered
into, all references in this Agreement to Agreement Accounting Principles
shall mean generally accepted accounting principles as of the date of such
amendment except as agreed in connection with the Covenant Accounting Changes
set forth in such an amendment and together with any changes in generally
accepted accounting principles after the date of such amendment which are not
Covenant Accounting Changes.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
--------------------
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of
one percent (0.5%) per annum.
"APPLICABLE FACILITY FEE" as at any date of determination, shall be the
-------------------------
rate per annum then applicable in the determination of the amount payable
under Section 2.10(C) with respect to the Aggregate Commitment determined in
----------------
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE EURODOLLAR MARGIN" as at any date of determination, shall be
-----------------------------
the rate per annum then applicable to Eurodollars Rate Loans determined in
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE BASE RATE MARGIN" as at any date of determination, shall be
-----------------------------
the rate per annum then applicable to Base Rate Loans determined in accordance
with the provisions of Section 2.4(b).
---------------
"APPLICABLE LETTER OF CREDIT FEE" as at any date of determination, shall
--------------------------------
be the rate per annum then applicable in the determination of the amount
payable under Section 2.20 with respect to Letters of Credit, determined in
-------------
accordance with the provisions of Section 2.4(b).
---------------
"APPLICABLE MARGIN(S)" is defined in Section 2.4(b).
--------------------- ---------------
"ARRANGER" means ABN AMRO Bank N.V. in its capacity as the arranger for
--------
the loan transaction evidenced by this Agreement.
"AUTHORIZED OFFICER" means any of the chief executive officer, chief
-------------------
operating officer, chief financial officer, controller and treasurer of a
Borrower, acting singly.
"BASE RATE" means, for any day for any Loan, a rate per annum equal to
----------
(i) the Alternate Base Rate for such day plus (ii) the Applicable Base Rate
Margin applicable to such Loan, changing when and as the Alternate Base Rate
changes.
"BASE RATE ADVANCE" means an Advance which bears interest at the Base
-------------------
Rate.
"BASE RATE LOAN" means a Loan, or portion thereof, which bears interest
----------------
at the Base Rate.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
-------------
of ERISA (other than a Multiemployer Plan) in respect of which the Company or
any other member of the Controlled Group is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of
ERISA.
"BORROWER" shall mean the Company, Agribrands Canada, Inc., a company
--------
organized under the federal laws of Canada, Purina Italia, S.p.A., a company
organized under the laws of Italy, Purina Espana, S.A., a company organized
under the laws of Spain, Purina Hungaria Animal Feed Production & Trading
Company, Ltd., a company organized under the laws of Hungary, and Purina
Korea, Inc., a corporation organized under the laws of the Republic of Korea,
and each of their respective successors and assigns.
"BORROWING DATE" means a date on which an Advance, is made hereunder.
---------------
"BORROWING NOTICE" is defined in Section 2.4(a) hereof.
----------------- ---------------
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
-------------
selection of Revolving Loans bearing interest at the Eurodollar Rate, a day
(other than a Saturday or Sunday) on which banks are open for business in New
York, New York and Chicago, Illinois and on which dealings in United States
Dollars and Korean Won are carried on in the relevant interbank market and
(ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York and Chicago, Illinois.
"CALCULATION DATE" means (i) with respect to any Revolving Loan or Letter
----------------
of Credit in Korean Won, the Business Day of the making of such Revolving Loan
or the issuance of the Letter of Credit with respect to Korean Won; (ii) with
respect to outstanding Revolving Loans and Letters of Credit, (x) the Business
Day on which any subsequent Loan is made or Letter of Credit is issued, (y)
the twenty-fifth day of each calendar month (or, if such date is not a
Business Day, the next succeeding Business Day), and (z) any other Business
Day selected at the option of the Agent or at the direction of the Required
Lenders; provided, with respect to any option exercised pursuant to clause
-------- ------
(ii)(z) above, without the consent of the Agent required to calculate the
----
applicable Exchange Rate, the Calculation Date selected shall not be earlier
-
than the second (2nd) Business Day following exercise of such option.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
---------------------
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases) by the Company and its Subsidiaries during that period
that, in conformity with Agreement Accounting Principles, are required to be
included in or reflected by the property, plant, equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Company and
its Subsidiaries other than with respect to the acquisition of inventory in
the ordinary course of business.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
--------------
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (howsoever designated)
of corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person, in each such case
regardless of class or designation.
"CAPITALIZED LEASE" of a Person means any lease of property by such
------------------
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
-------------------------------
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH COLLATERAL ACCOUNT" means that certain deposit account maintained
-------------------------
at all times by the Company at ABN AMRO Bank N.V. with a balance not less than
$25,000,000 at any time.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
-----------------
unconditionally guaranteed by the government of the United States or the
government of any member of the European Union; (ii) domestic and Eurodollar
certificates of deposit and time deposits, bankers' acceptances issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, or its branches or agencies or the laws of
any member of the European Union and having a rating of B or better by
Xxxxxxxx BankWatch, or rated A or better by S&P and A2 or better by Xxxxx'x;
(iii) shares of money market, mutual or similar funds having net assets in
excess of $500,000,000 maturing or being due or payable in full not more than
one hundred eighty (180) days after any Borrower's acquisition thereof and the
investments of which are limited to investment grade securities (i.e.,
securities rated at least Baa by Xxxxx'x or at least BBB by S&P) and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial,
industrial or utility companies which, at the time of acquisition, are rated
A-1 (or better) by S&P or P-1 (or better) by Xxxxx'x, or are backed by letters
of credit from banks rated B or better by Xxxxxxxx BankWatch or rated A or
better by S&P and A2 or better by Xxxxx'x; provided that the maturities of
--------
such Cash Equivalents shall not exceed 365 days.
"CASH INTEREST EXPENSE" will mean, for any period, the total Interest
-----------------------
Expense of the applicable entity actually paid in cash (including the interest
component of Capitalized Leases but excluding the arrangement fee set forth in
the letter agreement between the Agent, the Arranger and the Company dated
February 25, 1998) all as determined in conformity with Agreement Accounting
Principles.
"CHANGE" is defined in Section 3.2 hereof.
------ ------------
"CHANGE OF CONTROL" means any of the following:
-------------------
(i) any "person" or "group" (as such terms are used in Sections 13(d)
--------------
and 14(d) of the Exchange Act)is or becomes the "beneficial owner" (as defined
-----
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 20% or more of the
combined voting power of the Company's Capital Stock ordinarily having the
right to vote at an election of directors;
(ii) during any period of 12 consecutive calendar months,
individuals:
(a) who were directors of the Company on the first day of such period, or
(b) whose election or nomination for election to the board of directors of
the Company was recommended or approved by at least a majority of the
directors then still in office who were directors of the Company on the first
day of such period, or whose election or nomination for election was so
approved,
shall cease to constitute a majority of the board of directors of the Company;
(iii) the Company consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of its
property to any Person, or any corporation consolidates with or merges into
the Company, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Company is reclassified or changed into or
exchanged for cash, securities or other property; and
(iv) except as provided by Section 6.3(B)(iv) with respect to the
------------------
sale, dissolution or liquidation of certain Subsidiaries of the Company, the
Company shall cease to own of record and beneficially, with sole voting and
dispositive power, at least 80% of the outstanding shares of Capital Stock of
each Subsidiary Borrower and each Subsidiary Obligor ordinarily having the
right to vote at an election of directors or shall cease to have the power,
directly or indirectly, to elect a majority of the board of directors of each
Subsidiary Borrower.
"CLOSING DATE" means the date on which the Agent notifies the Company in
-------------
writing that all of the conditions precedent under Sections 4.1 and 4.2 have
------------ ---
been satisfied and any of the Borrowers may request Loans, and any of the
Borrowers or the Subsidiary Obligors may request Letters of Credit, under this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"COLLATERAL DOCUMENT" shall mean the Pledge Agreements, the Guaranties
--------------------
and all other security agreements, mortgages, loan agreements, notes,
guarantees, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by or on behalf of the Company
or any of its Subsidiaries and delivered to the Agent or any of the Lenders,
together with all agreements and documents referred to therein or contemplated
thereby.
"COLLATERAL" means all property and interest in property now owned or
----------
hereafter acquired by the Company which has been pledged to the Agent for the
benefit of the Holders of Secured Obligations under the Pledge Agreements.
"COMMISSION" means the Securities and Exchange Commission and any Person
----------
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
----------
make Revolving Loans, and to purchase participations in Letters of Credit not
exceeding the Dollar Amount set forth on Exhibit A to this Agreement opposite
---------
its name thereon under the heading "Commitment" or in the assignment and
acceptance by which it became a Lender, as such amount may be modified from
time to time pursuant to the terms of this Agreement or to give effect to any
applicable assignment and acceptance.
"COMPANY" means Agribrands International, Inc., a Missouri corporation,
-------
together with its successors and assigns.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
----------------------
Exhibit C delivered to the Agent and each Lender by the Company pursuant to
----------
the provisions of this Agreement and covering, among other things, its
--
calculation of the Applicable Margins, Applicable Facility Fee, Applicable
--
Letter of Credit Fee, its compliance with the financial covenants contained in
--
Section 6.4 and certain other provisions of this Agreement.
------------
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
-------------------------------------
Information Memorandum dated February 1998 and delivered by the Agent and the
Company to prospective Lenders in connection with this Agreement.
"CONSOLIDATED EBITDA" means, for any period, EBITDA of the Company and
--------------------
its Subsidiaries on a consolidated basis.
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
------------------------
would be included under shareholders' or members' equity for the Company and
its consolidated Subsidiaries deter-mined in accordance with Agreement
Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
-----------
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
----------------------
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability
of another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or
discounted or sold with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable, including Contractual
Obligations (contingent or otherwise) arising through any agreement to
purchase, repurchase, or otherwise acquire such Indebtedness, obligation or
liability or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.
"CONTINGENT PURCHASE PRICE OBLIGATION", as applied to any Person, means
--------------------------------------
any Contractual Obligation of such Person incurred in connection with an
Acquisition pursuant to which such Person is obligated to pay additional
consideration to the applicable seller in the form of an earnout, milestone
payment, contingent purchase price payment, or other similar performance based
compensation relating to post-Acquisition financial or operating performance
of the business acquired.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
-----------------------
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
-----------------
(other than Xxxxxxx Purina Company and any company that is a subsidiary of
such company as of the Closing Date) which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as
the Company; (ii) a partnership or other trade or business (whether or not
incorporated (other than Xxxxxxx Purina Company and any company that is a
subsidiary of such company as of the Closing Date)) which is under common
control (within the meaning of Section 414(c) of the Code) with the Company;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Company, any corporation described in
clause (i) above or any partnership or trade or business described in clause
------ ------
(ii) above (in each case, other than Xxxxxxx Purina Company and any company
---
that is a subsidiary of such company as of the Closing Date).
-
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.6(D) hereof.
------------------------------- --------------
"CUSTOMARY PERMITTED LIENS" means:
---------------------------
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens imposed
by law created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all such Liens do not
--------
in the aggregate materially detract from the value of assets or property of
any Borrower taken as a whole or materially impair the use thereof in the
operation of the businesses taken as a whole, and (B) all Liens securing bonds
to stay judgments or in connection with appeals that do not secure at any time
an aggregate amount exceeding $5,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements, building
restrictions and other similar charges or encumbrances on the use of real
property which do not interfere with the ordinary conduct of the business of
any Borrower or any Subsidiary of any Borrower;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against any Borrower or any
Subsidiary of any Borrower which do not constitute a Default under Section
-------
7.1(h);
---
(vi) Liens arising from leases, subleases or licenses granted to
others which do not interfere in any material respect with the business of any
Borrower or any Subsidiary of any Borrower; and
(vii) any interest or title of the lessor in the property subject to
any operating lease entered into by any Borrower or any Subsidiary of any
Borrower in the ordinary course of business.
"DEFAULT" means an event described in Article VII hereof.
------- ------------
"DOL" means the United States Department of Labor and any Person
---
succeeding to the functions thereof.
--
"DOLLAR" or "$" means the lawful money of the United States of America.
------ -
"DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of
--------------
such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the then applicable Exchange Rate.
"EBITDA" will mean, for any period, on a consolidated basis for the
------
applicable Person, the sum of the amounts for such period, without
duplication, of (i) net sales minus (ii) cost of products sold minus (iii)
----- -----
selling, general and administrative expenses, plus (iv) depreciation expense
----
to the extent deducted in computing the amounts in clauses (ii) and (iii)
------------ -----
above, plus (v) amortization expense, including, without limitation,
----
amortization of goodwill and other intangible assets to the extent deducted in
--
computing the amounts in clauses (ii) and (iii) above, all as determined in
------------ -----
accordance with Agreement Accounting Principles. EBITDA for each Subsidiary
shall be calculated excluding the effect of any service fees paid by such
Subsidiary to the Company.
"EBITDA CONTRIBUTION RATIO" shall mean the ratio of (i) Total Debt of the
-------------------------
Company and its Subsidiaries to (ii) the sum of 100% of EBITDA contributed by
Subsidiaries in countries with a rating of equal to or better than BBB- from
S&P and Baa3 from Xxxxx'x and 50% of EBITDA contributed by Subsidiaries in
countries with a rating of lower than BBB- from S&P or lower than Baa3 from
Xxxxx'x.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
---------------------------------------------------------
Requirements of Law derived from or relating to foreign, federal, state and
---
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601 et seq., the Occupational Safety and Health
-- ---
Act of 1970, 29 U.S.C. 651 et seq., and the Resource Conservation and
-- ---
Recovery Act of 1976, 42 U.S.C. 6901 et seq., in each case including any
-- ---
amendments thereto, any successor statutes, and any regulations or guidance
promulgated thereunder, and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
-------------------
for (a) any liability under Environmental, Health or Safety Requirements of
Law, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant
into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
-----------------------------------
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site
Recovery Act" or "Responsible Property Transfer Act."
"EQUIPMENT" means all of the present and future (i) equipment, including,
---------
without limitation, machinery, manufacturing, distribution, selling, data
processing and office equipment, assembly systems, tools, molds, dies,
fixtures, appliances, furniture, furnishings, vehicles, vessels, aircraft,
aircraft engines, and trade fixtures, (ii) other tangible personal property
(other than the Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof owned by the Company or any of the other Borrowers.
"EQUITY INTERESTS" means Capital Stock and all warrants, options,
-----------------
purchase rights, conversion or exchange rights, other rights to acquire
-
Capital Stock and all voting rights, calls or claims of any character with
respect thereto (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars
-----------------
at any date means the equivalent in such currency of such amount of Dollars,
calculated on the basis of the then applicable Exchange Rate rounded up to the
nearest incremental amount of such currency as determined by the Agent from
time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time including (unless the context otherwise requires)
any rules or regulations promulgated thereunder.
"EURODOLLAR ADVANCE" means an Advance (other than a Korean Eurodollar
-------------------
Advance) which bears interest at the Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Loan or Korean
--------------------
Eurodollar Loan for the relevant Interest Period, the rate at which deposits
in Dollars are offered by ABN AMRO Bank N.V. to first-class banks in the
London interbank market at approximately (x) in the case of a Eurodollar Loan,
11:00 a.m. (London time) two Business Days and (y) in the case of a Korean
Eurodollar Loan, 11:00 a.m. (London time) three Business Days, prior to the
first day of such Interest Period, in the approximate amount of the portions
of the relevant Eurodollar Loan of ABN AMRO Bank N.V., and having a maturity
approximately equal to such Interest Period.
"EURODOLLAR LOAN" means a Loan (other than a Korean Eurodollar Loan), or
----------------
portion thereof, which bears interest at the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance or Korean
----------------
Eurodollar Advance for the relevant Interest Period, the sum of (a) (i) the
-----
Eurodollar Base Rate divided by (ii) one minus the Reserve Requirement
- -----
(expressed as a decimal) applicable to such Interest Period plus (b) the
- ----
percentage determined in accordance with Section 2.4(b) to be the Applicable
- --------------
Eurodollar Margin in connection with Eurodollar Loans.
"EXCHANGE RATE" means with respect to Korean Won on a particular date,
--------------
the rate at which Korean Won may be exchanged into Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of
the Agent in the London interbank market (or other market where the Agent's
foreign currency exchange operations in respect of Korean Won are then being
conducted) for Korean Won at or about 1:00 p.m. (local time), on such date for
the purchase of Dollars with Korean Won for delivery five (5) Business Days
later; provided, however, that if at the time of any such determination, for
-------- -------
any reason, no such spot rate is being quoted, the Agent may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
------------------------------
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (New York time) on such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
"FEES" are described in Section 2.10(C) hereof.
---- ----------------
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as
--------------------------------
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Company, any of its Subsidiaries or any
members of its Controlled Group and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
----------------------
Section 3(3) of ERISA which (i) is maintained or contributed to for the
benefit of employees of the Company, any of its Subsidiaries or any of its
ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of
ERISA, and (iii) under applicable local law, is required to be funded through
a trust or other funding vehicle.
"GOVERNMENTAL ACTS" is defined in Section 2.21(a) hereof.
------------------ ----------------
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
-----------------------
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY" means each of (i) those certain Guaranties executed in favor
--------
of the Agent for the benefit of the Holders of Secured Obligations pursuant to
which each of the Subsidiary Borrowers and Subsidiary Obligors shall guaranty
all of the Obligations of the other Subsidiary Borrowers and Subsidiary
Obligors and (ii) that certain Guaranty executed by the Company in favor of
the Agent for the benefit of the Holders of Secured Obligations pursuant to
which the Company shall guaranty all of the Obligations of the Subsidiary
Borrowers and the Subsidiary Obligors, in each case, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"HEDGING AGREEMENTS" is defined in Section 6.3(P).
------------------- ---------------
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
--------------------
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
---------------------------------
Obligations from time to time and shall refer to (i) each Lender in respect of
-
its Loans and the L/C Obligations owed directly or indirectly to such Lender
(including, if applicable, any agency or Affiliate of a Lender), (ii) the
Issuing Lenders in respect of Reimbursement Obligations and other Obligations
relating to its Letters of Credit, (iii) the Agent, the Arranger, and the
Issuing Lenders in respect of all other present and future obligations and
liabilities of any Borrower or any of their subsidiaries of every type and
description arising under or in connection with this Agreement or any other
Loan Document, (iv) each Indemnitee in respect of the obligations and
liabilities of any Borrower to such Person hereunder or under any of the Loan
Documents, (v) each Lender (or any agency or Affiliate thereof) in respect of
all Hedging Obligations of any Borrower or any of their Subsidiaries to such
lender (or agency or Affiliate thereof) and (vi) their respective successors,
transferees and assigns.
"INDEBTEDNESS" of any Person means (i) any indebtedness of such Person,
------------
contingent or otherwise, (a) in respect of borrowed money including all
principal, interest, fees and expenses with respect thereto (whether or not
the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or (b) evidenced by bonds, notes, acceptances,
debentures or other instruments or letters of credit (or reimbursement
obligations with respect thereto, including, in the case of the Borrowers,
Reimbursement Obligations with respect to amounts funded under the Letters of
Credit) or representing the balance deferred and unpaid of the purchase price
of any property (including pursuant to Capitalized Leases) or services, if and
to the extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles (except that any such balance that constitutes a trade
payable and/or an accrued liability arising in the ordinary course of business
shall not be considered Indebtedness); (ii) to the extent not otherwise
included, (a) any Capitalized Lease Obligations, (b) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production
from property now or hereafter owned or acquired by such Person, and (c)
Contingent Obligations in respect of Indebtedness of other Persons (exclusive
of whether such items would appear upon such balance sheet). The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent Obligations at such
date and (ii) in the case of Indebtedness of others secured by a Lien to which
the property or assets owned or held by such Person is subject, the lesser of
(x) the fair market value at such date of any asset subject to a Lien securing
the Indebtedness of others and (y) the amount of the Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in Section 9.7(B) hereof.
-------------------- ---------------
"INDEMNITEES" is defined in Section 9.7(B) hereof.
----------- ---------------
"INTEREST EXPENSE" means, for any period, the consolidated total interest
-----------------
expense of the Company and its Subsidiaries, determined on a consolidated
---
basis, whether paid or accrued, but without duplication (including the
---
interest component of Capitalized Leases), but excluding interest expense not
---
payable in cash (including amortization of discount) and excluding the
arrangement fee set forth in the letter agreement between the Agent, the
Arranger and the Company dated February 25, 1998, all as determined in
conformity with Agreement Accounting Principles.
"INTEREST PERIOD" means, (x) with respect to a Eurodollar Loan, a period
----------------
of one (1), two (2), three (3) or six (6) months, and, to the extent available
to all of the Lenders, upon request of the applicable Borrower and only if the
Lenders, in their discretion, shall agree, nine (9) months or twelve (12)
months, and (y) with respect to a Korean Eurodollar Loan, a period of one
(1), two (2) or three (3) months, and, to the extent available to all of the
Lenders, upon request of Purina Korea, Inc. and only if the Lenders, in their
discretion, shall agree, six (6) months, in each case commencing on a Business
Day selected by the applicable Borrower pursuant to this Agreement. Such
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months and, if applicable,
nine or twelve months, thereafter; provided, however, that if there is no such
-------- -------
numerically corresponding day in such next, second, third or sixth succeeding
month and, if applicable, ninth or twelfth succeeding month, such Interest
Period shall end on the last Business Day of such next, second, third or sixth
succeeding month and, if applicable, ninth or twelfth succeeding month. With
respect to a Korean Won Advance, Interest Period means a period designated by
the Agent of approximately ninety (90) days. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, provided, however, that if said next
-------- -------
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
----------
acquisition by that Person of any Equity Interest, notes, debentures or other
securities, or of a beneficial interest in any Equity Interest, notes,
debentures or other securities, issued by any other Person, (ii) any purchase
by that Person of all or substantially all of the assets of a business
conducted by another Person, and (iii) any loan, advance (other than deposits
with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable, advances to employees and similar items in each
case made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Indebtedness to
such Person arising from a sale of property by such Person other than in the
ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
---
functions thereof.
"ISSUING LENDER" means, as the context may require, ABN AMRO Bank N.V.,
---------------
with respect to Letters of Credit issued by it pursuant to this Agreement, and
any other Lender that becomes an Issuing Lender, pursuant to Section 2.16,
------------
with respect to Letters of Credit issued by such Lender.
"KNOWLEDGE" means, at any time in respect of any Person and relative to
---------
any matter, knowledge which the Authorized Officers of such Person would
reasonably be expected to have regarding such matter.
"KOREAN CD RATE" means with respect to any Korean Won Advance for any
----------------
specified Interest Period, the rate per annum, as determined by the Agent,
shown on page "KWCD 3M" screen of the Bloomberg L.P. service (or such other
page as may replace the "KWCD 3M" screen on that service) for the purpose of
displaying the rate offered in Seoul, Korea for 91-day certificates of deposit
issued in Seoul, Korea as of 11:00 a.m. (Seoul time) five (5) Business Days
prior to the first day of such Interest Period.
"KOREAN EURODOLLAR ADVANCE" means an Advance to Purina Korea, Inc., in Dollars
-------------------------
which bears interest at the Korean Eurodollar Rate.
"KOREAN EURODOLLAR LOAN" means a Loan, or portion thereof, which bears
------------------------
interest at the Korean Eurodollar Rate.
"KOREAN EURODOLLAR RATE" means a rate per annum equal to the Eurodollar
------------------------
Rate minus the Applicable Eurodollar Margin plus 3.50% per annum.
----- ----
"KOREAN WON ADVANCE" means an advance made pursuant to Section 2.1
-------------------- -----------
denominated in Korean Won to Purina Korea, Inc.
"KOREAN WON LOAN" means with respect to a Lender, such Lender's portion
-----------------
of any Korean Won Advance made pursuant to Section 2.1.
------------
"L/C DRAFT" means a draft drawn on an Issuing Lender pursuant to a Letter
---------
of Credit.
"L/C INTEREST" is defined in Section 2.17.
------------- -------------
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
----------------
of (i) the aggregate of the amount then available for drawing under each of
the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the Issuing Lender, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of
all Letters of Credit requested by any Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
-------
this Agreement, including the Issuing Lenders and their respective successors
and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
---------------------
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER(S) OF CREDIT" means the letters of credit to be issued by one of
--------------------
the Issuing Lenders pursuant to Section 2.16 hereof.
-------------
"LIEN" means any lien (statutory or other), mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance or preference,
----
priority or security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means with respect to a Lender, such Lender's portion of any
-------
Advance made pursuant to Section 2.1.
------------
"LOAN ACCOUNT" is defined in Section 2.10(F) hereof.
------------- ----------------
"LOAN DOCUMENTS" means this Agreement and all other documents,
---------------
instruments and agreements executed in connection therewith or contemplated
----
thereby, including the letter agreements regarding fees among the Agent, the
Arranger, and the Company and between the Agent and the Borrower, in each case
as the same may be amended, restated or otherwise modified and in effect from
time to time.
"LONG TERM CREDIT AGREEMENT" means that certain Long Term Credit
-----------------------------
Agreement, dated as of March __, 1998, by and among the Company, the
--
Subsidiary Borrowers, the Subsidiary Obligors, the Lenders and the Agent, as
--
the same may be amended, restated, supplemented or otherwise modified from
time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
------------
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
-------------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole,
(b) the ability of the Company and the other Borrowers and the Subsidiary
Obligors taken as a whole to perform their obligations under the Loan
Documents in any material respect, or (c) the ability of the Lenders or the
Agent to enforce in any material respect this Agreement, the Obligations or
their rights with respect to the Collateral other than any such inability
resulting form the gross negligence or willful misconduct of any Lender or the
Agent.
"MAXIMUM KOREAN COMMITMENT" shall mean the maximum amount which the
---------------------------
Lenders have agreed to provide as Loans or Letters of Credit to Purina Korea,
Inc. under this Agreement. The initial Maximum Korean Commitment is
$15,000,000.
"MAXIMUM KOREAN WON COMMITMENT" shall mean the maximum amount which the
-------------------------------
Lenders have agreed to provide as Loans or Letters of Credit to Purina Korea,
Inc. in Korean Won under this Agreement. The Dollar Amount of the initial
Maximum Korean Won Commitment is $7,500,000.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
-------
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
-------------------
4001(a)(3) of ERISA which is, or within the immediately preceding six (6)
years was, contributed to by either the Company or any member of the
Controlled Group.
"NOTICE OF ASSIGNMENT" is defined in Section 12.3(B) hereof.
---------------------- ----------------
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
-----------
covenants and duties owing by any of the Borrowers or Subsidiary Obligors to
the Agent, the Arranger, or the Lenders, the Issuing Lenders, any Affiliate of
any of the foregoing or any Indemnitee, of any kind or nature, present or
future, arising under this Agreement or any other Loan Document, whether or
not evidenced by any note, guaranty or other instrument, whether or not for
the payment of money, whether arising by reason of an extension of credit,
loan, guaranty, indemnification, or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements, paralegals' fees (in each case whether or
not allowed), and any other sum chargeable to any of the Borrowers or
Subsidiary Obligors under this Agreement or any other Loan Document.
"OTHER TAXES" is defined in Section 2.10(E)(ii) hereof.
------------ --------------------
"PARTICIPANTS" is defined in Section 12.2(A) hereof.
------------ ----------------
"PAYMENT DATE" means the last Business Day of each March, June, September
------------
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
----
thereto.
"PERMITTED ACQUISITION" is defined in Section 6.3(G) hereof.
---------------------- ---------------
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
--------------------------------------------
Obligations of the Borrowers and all other Subsidiaries of the Company
--
identified as such on Schedule 1.1.1 to this Agreement.
- ---------------
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrowers
-------------------------------
and all other Subsidiaries of the Company identified as such on Schedule 1.1.2
--------------
to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrowers
--------------------------------
and all other Subsidiaries of the Company identified as such on Schedule 1.1.3
--------------
to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrowers or
-------------------------
all other Subsidiaries of the Company identified as such on Schedule 1.1.4 to
--------------
this Agreement.
"PERSON" means any natural person, corporation, firm, company, joint
------
venture, partnership, association, enterprise, trust or other entity or
organization, or any government, domestic or foreign, or political subdivision
or any agency, department or instrumentality thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
----
respect of which the Company or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means those certain Pledge Agreements pursuant to
------------------
which the Company pledges to the Agent for the benefit of the Holders of
Secured Obligations all of the Capital Stock of each of the Subsidiary
Borrowers and Subsidiary Obligors.
"PRIME RATE" shall mean the rate of interest per annum announced from
-----------
time to time by the Agent as its prime lending rate in effect at its principal
office in New York, New York; each change in the Prime Rate shall be effective
on the date such change is announced. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate charged to any
customers. ABN AMRO Bank N.V. and the other Lenders may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
----------------
obtained by dividing (A) such Lender's Commitment at such time (as adjusted
from time to time in accordance with the provisions of this Agreement) by (B)
the Aggregate Commitments at such time; provided, however, if all of the
-------- -------
Commitments are terminated pursuant to the terms of this Agreement, then "Pro
Rata Share" means the percentage obtained by dividing (x) the sum of all of
such Lender's Loans and L/C Obligations by (y) the aggregate amount of all
Loans and L/C Obligations.
"PURCHASERS" is defined in Section 12.3(A) hereof.
---------- ----------------
"RATE OPTION" means the applicable Eurodollar Rate or Base Rate.
------------
"REGULATION G" means Regulation G of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by nonbank, nonbroker lenders for the
purpose of purchasing or carrying margin stock (as defined therein).
"REGULATION T" means Regulation T of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by and to brokers and dealers of
securities for the purpose of purchasing or carrying margin stock (as defined
therein).
"REGULATION U" means Regulation U of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying Margin Stock applicable to member banks of the Federal Reserve
System.
"REGULATION X" means Regulation X of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by foreign lenders for the purpose of
purchasing or carrying margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in Section 2.18 hereof.
------------------------- -------------
"RELEASE" means any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration of
---
Contaminants into the indoor or outdoor environment, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" is defined in Section 2.15 hereof.
------------------- -------------
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
----------------
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
after such event occurs; provided, however, that a failure to meet the minimum
-------- -------
funding standards of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
----------------
are at least sixty-six and two-thirds percent (66-2/3%), provided, however,
-------- -------
that, if any of the Lenders shall have failed to fund its Revolving Credit
Share of any Loan requested by any Borrower which such Lenders are obligated
to fund under the terms of this Agreement and any such failure has not been
cured, then for so long as such failure continues, "REQUIRED LENDERS" means
Lenders (excluding all Lenders whose failure to fund such Loans have not been
so cured) whose Pro Rata Shares represent at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate Pro Rata Shares of such non-defaulting
Lenders; provided, further, however, that, if the Commitments have been
-------- ------- -------
terminated pursuant to the terms of this Agreement, "REQUIRED LENDERS" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C
Obligations are at least sixty-six and two-thirds percent (66-2/3%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
-------------------
other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject including, without limitation, the Securities Act, the Securities
Exchange Act, Regulations G, T, U and X, ERISA, the Fair Labor Standards Act,
the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or Permit or environmental,
labor, employment, occupational safety or health law, rule or regulation,
including Environmental, Health or Safety Requirements of Law.
"RESERVE REQUIREMENT" means the maximum reserve requirement, as
--------------------
prescribed by the Board of Governors of the Federal Reserve System (or any
---
successor) with respect to "Eurodollar liabilities" or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or category of extensions of
credit or other assets which includes loans by a non-United States office of
any Lender to United States residents.
"RESET DATE" is defined in Section 1.2.
----------- ------------
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
-------------------------
direct or indirect, on account of any ownership, membership or other Equity
Interest in the Company now or hereafter outstanding, except a dividend
payable solely in additional interests of the same type, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any ownership, membership or other Equity
Interest in the Company or any such interests or shares of any class of
Capital Stock of the Company now or hereafter outstanding, (iii) any payment
made to redeem, purchase, repurchase or retire, or to obtain the surrender of,
any outstanding options or other rights to acquire any ownership, membership
or other Equity Interests in the Company and (iv) any payment of a claim for
the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of any ownership, membership or other Equity
Interests in the Company or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission.
"REVOLVING ADVANCE" means a borrowing hereunder consisting of the
------------------
aggregate amount of the several ratable Revolving Loans made by the Lenders to
-
any Borrower having Commitments to such Borrower of the same Type and, in the
case of Eurodollar Advances, denominated in the same currency and for the same
Interest Period.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
-----------------------------
by which the Aggregate Commitment at such time exceeds the Dollar Amount of
the Revolving Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
-----------------------------
(i) the outstanding principal Dollar Amount of the Revolving Loans at such
time, plus (ii) the L/C Obligations at such time.
----
"REVOLVING CREDIT SHARE" means, with respect to any Lender, the
------------------------
percentage obtained by dividing (A) such Lender's Commitment at such time by
---
(B) the Aggregate Commitment at such time.
"REVOLVING LOAN" is defined in Section 2.1.
--------------- ------------
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 3.2 hereof.
------------------------------- ------------
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
--------------------
all Hedging Obligations owing to one or more of the Lenders (or any agency or
Affiliate thereof) by any of the Borrowers or Subsidiary Obligors.
"S&P" means Standard & Poor's Ratings Group.
---
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any
----------------------
member of the Controlled Group for employees of the Company or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
----------
outstanding Capital Stock having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any company, partnership, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a direct or indirect Subsidiary of the Company.
"SUBSIDIARY BORROWERS" means those Borrowers which are Subsidiaries of
---------------------
the Company.
"SUBSIDIARY OBLIGORS" means Purina Korea, Inc., a corporation organized
--------------------
under the laws of Korea, Industrias Purina S.A. de C.V., a company organized
under the laws of Mexico, Purina Colombiana S.A., a company organized under
the laws of Colombia, Agribrands Purina do Brasil, Ltda., a company organized
under the laws of Brazil, Purina Philippines, Inc., a corporation organized
under the laws of the Philippines, and Purina de Venezuela, C.A., a company
organized under the laws of Venezuela.
"TAXES" is defined in Section 2.10(E)(i) hereof.
----- -------------------
"TERMINATION DATE" means the earlier of (a) March 29, 1999, or any
-----------------
subsequent date to which the Termination Date may have been extended pursuant
to the terms of Section 2.24 or (b) the date of termination of the Commitments
------------
pursuant to Section 8.1.
------------
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
------------------
Benefit Plan; (ii) the withdrawal of the Company or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Company
or such Controlled Group member was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or the cessation of operations which results in
the termination of employment of twenty percent (20%) of Benefit Plan
participants who are employees of the Company or any member of the Controlled
Group; (iii) the imposition of an obligation on the Company or any member of
the Controlled Group under Section 4041 of ERISA to provide affected parties
written notice of intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Benefit Plan; or (vi) the
partial or complete withdrawal of the Company or any member of the Controlled
Group from a Multiemployer Plan.
"TOTAL DEBT" means the sum of all Indebtedness of the Company and its
-----------
Subsidiaries (including, without limitation and without duplication, standby
-------
letters of credit (whether on or off-balance sheet)) minus ordinary course
-----
liability for trade indebtedness (including reimbursement under commercial
letters of credit).
"TRANCHE A OBLIGATIONS" means the Obligations of the Borrowers other than
---------------------
Purina Korea, Inc.
"TRANCHE B OBLIGATIONS" means the Obligations of the Subsidiary Obligors.
---------------------
"TRANSFEREE" is defined in Section 12.5 hereof.
---------- -------------
"TYPE" means, with respect to any Advance, its nature as a Base Rate
----
Advance or a Eurodollar Advance or a Korean Eurodollar Advance or a Korean Won
Advance.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or
------------------
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any accounting terms used in
this Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with United States generally
accepted accounting principles in existence as of the date hereof.
1.2 Currency Equivalents. Not later than 1:00 p.m., New York time or
---------------------
Seoul, Korea time, as applicable, on each Calculation Date, the Agent shall
(i) determine the Exchange Rate as of such Calculation Date with respect to
Korean Won and (ii) give notice thereof to the Company and the Lenders. The
Exchange Rates so determined shall become effective immediately with respect
to any new Loans being made or Letters of Credit being issued on any
Calculation Date and otherwise on the fifth Business Day immediately following
the relevant Calculation Date (a "RESET DATE"), shall remain effective until
the next succeeding Reset Date and shall during the period of their
effectiveness be employed in making any computation of currency equivalents
required to be made under this Agreement.
ARTICLE II: THE CREDITS
----------------------------
2.1 Revolving Loans to the Company and the Subsidiary Borrowers. Upon
-----------------------------------------------------------
the satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2
------------ ---
hereof, from and including the date of this Agreement and prior to the
Termination Date, each Lender with a Commitment severally and not jointly
agrees, on the terms and conditions set forth in this Agreement, to make
revolving loans to the Company and/or the Subsidiary Borrowers from time to
time, in Dollars or, with respect to Purina Korea, Inc., Korean Won, in a
Dollar Amount, not to exceed such Lender's Revolving Credit Share of the
Dollar Amount of the Revolving Credit Availability at such time (each
individually, a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS");
provided, however, that no Lender shall be obligated to make any Revolving
------ -------
Loan hereunder to any Borrower unless the "Revolving Credit Obligations" owed
-
by such Borrower under and as defined under the Long Term Credit Agreement
shall be equal to the amounts set forth in the second proviso of the first
sentence of Section 2.1 of the Long Term Credit Agreement, provided that, with
--------
respect to Revolving Loans to Purina Korea, Inc. and denominated in Korean Won
and subject to the conditions precedent set forth in Sections 4.1 and 4.2
------------ ---
hereof, Purina Korea, Inc. may request Revolving Loans denominated in Korean
Won hereunder so long as the Dollar Amount of "Revolving Credit Obligations"
denominated in Korean Won under and as defined in the Long Term Credit
Agreement is equal to the "Maximum Korean Won Commitment" under and as defined
in the Long Term Credit Agreement; provided, further, however, at no time
-------- ------- -------
shall the Dollar Amount of the Revolving Credit Obligations in Korean Won
exceed the Maximum Korean Won Commitment other than as a result of currency
fluctuations and then only to the extent permitted in Section 2.2(B);
--------------
provided, further, however, at no time shall the amount of the Revolving
------- -------
Credit Obligations owed by any of the Borrowers pursuant to this Agreement
exceed the corresponding amounts listed below:
Agribrands International, Inc. $ 5,000,000
Agribrands Canada, Inc. $ 6,500,000
Purina Italia S.p.A. $ 4,000,000
Purina Espana, S.A. $ 2,500,000
Purina Hungaria Animal Feed
Production & Trading Company Ltd. $ 2,000,000
Purina Korea, Inc. $15,000,000
Each Revolving Advance under this Section 2.1 shall consist of Revolving Loans
-----------
made by each such Lender ratably in proportion to such Lender's respective
Revolving Credit Share. Subject to the terms of this Agreement, the Borrowers
may borrow, repay and reborrow at any time prior to the Termination Date.
Korean Won Advances and Korean Eurodollar Advances shall bear interest at the
rates prescribed in Section 2.4(c). On the Termination Date, the outstanding
--------------
principal balance of the Revolving Loans shall be paid in full by the
applicable Borrower and prior to the Termination Date prepayments of the
Revolving Loans shall be made if and to the extent required in Section 2.2(B).
--------------
2.2 Prepayments. (A) Optional Payments. Upon prior notice to the Agent
----------- -----------------
which notice shall be given not later than 11:00 a.m. (New York time) on the
date of payment, the Borrowers may from time to time repay or prepay, without
penalty or premium all or any part of outstanding Base Rate Advances. Subject
to payment of all amounts payable pursuant to Section 3.4 upon not less than
-----------
(x) five (5) Business Days' prior notice with respect to Advances to Purina
Korea, Inc. and (y) two (2) Business Day's prior notice with respect to all
other Advances, in each case to the Agent which notice shall be given not
later than 11:00 a.m. (New York time or Seoul, Korea time, as applicable), the
Borrowers may from time to time repay or prepay all or any part of the Korean
Eurodollar Advances or Korean Won Advances, or Eurodollar Advances,
respectively. Unless the aggregate outstanding principal balance of the
applicable Loans is to be prepaid in full, voluntary prepayments of the Loans
shall be in the same aggregate minimum amounts and integral multiples in
excess of such amounts as are required for borrowings of Loans of the same
Type and in the same currency as set forth in Section 2.5.
------------
(B) Mandatory Prepayments. (a) If at any time the Dollar Amount of the
---------------------
Revolving Credit Obligations is greater than 105% of the Aggregate Commitment,
the Borrowers shall within five (5) Business Days after receiving notice
thereof from the Agent make a mandatory prepayment (i) of the Obligations in
an amount equal to such excess and (ii) of the Korean Won Loans and/or L/C
Obligations denominated in Korean Won in an aggregate amount such that after
giving effect thereto the Dollar Amount of the sum of the Korean Won Loans and
L/C Obligations denominated in Korean Won is less than or equal to the Maximum
Korean Won Commitment.
(b) If at any time (x) the "Revolving Credit Obligations" owed by any
Borrower or Subsidiary Obligor under and as defined in the Long Term Credit
Agreement shall be less than the amounts set forth in either of (A) the second
proviso of the first sentence of Section 2.1 of the Long Term Credit Agreement
or (B) the first proviso of the first sentence of Section 2.16 of the Long
Term Credit Agreement, and (y) the Revolving Credit Obligations of such
Borrower or Subsidiary Obligor hereunder shall be greater than zero, the
applicable Borrower or Subsidiary Obligor shall not later than the last day of
the then current Interest Period with respect thereto make a mandatory
prepayment of the Obligations owed by it in an amount equal to the excess of
the amounts set forth in either of (A) the second proviso of the first
sentence of Section 2.1 of the Long Term Credit Agreement or (B) the first
proviso of the first sentence of Section 2.16 of the Long Term Credit
Agreement, as applicable, over the "Revolving Credit Obligations" of such
Borrower or Subsidiary Obligor under and as defined in the Long Term Credit
Agreement.
(c) If at any time (x) the "Maximum Korean Won Commitment" under and as
defined in the Long Term Credit Agreement is greater than the Dollar Amount of
"Revolving Credit Obligations" denominated in Korean Won under and as defined
in the Long Term Credit Agreement, and (y) the Revolving Credit Obligations
denominated in Korean Won hereunder shall be greater than zero, Purina Korea,
Inc. shall not later than the then current Interest Period with respect
thereto make a mandatory prepayment of the Obligations hereunder denominated
in Korean Won in an amount equal to the excess of the "Maximum Korea Won
Commitment" under and defined in the Long Term Credit Agreement over the
Dollar Amount of "Revolving Credit Obligations" denominated in Korean Won
under and as defined in the Long Term Credit Agreement.
2.3 Method of Borrowing. The Agent shall promptly notify each Lender
--------------------
having Commitments of each Revolving Advance on the Borrowing Date of each
Base Rate Advance, three (3) Business Days before the Borrowing Date of each
Eurodollar Advance, three (3) Business Days before the Borrowing Date of each
Korean Eurodollar Advance, and five (5) Business Days before the Borrowing
Date for each Korean Won Advance, and, not later than 2:00 p.m. (New York time
or Seoul, Korea time, as applicable) on each Borrowing Date, each Lender
having Revolving Credit Commitments shall make available its Revolving Loan or
Loans, in funds immediately available in New York, New York to the Agent at
its address specified pursuant to Article XIII hereof unless the Agent has
------------
notified the Lenders that such Loan is to be made available to Purina Korea,
Inc. at the Agent's office in Seoul, Korea, in which case each Lender shall
make available its Revolving Loan or Loans, in funds immediately available to
the Agent at its office in Seoul, Korea not later than 2:00 p.m. at the
Agent's office in Seoul, Korea in Korean Won or Dollars, as requested. The
Agent will promptly make the funds so received from the Lenders available to
the applicable Borrower.
2.4 Method of Selecting Types and Interest Periods for Advances;
------------------------------------------------------------------
Determination of Applicable Margins, Interest on Advances to Purina Korea,
-----------------------------------------------------------------------
Inc. The Advances (other than Korean Won Advances or Korean Eurodollar
Advances) may be Base Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the applicable Borrower in accordance with this Article
-------
II. Advances to Purina Korea, Inc., shall bear interest as prescribed in
-
Section 2.4(c). The applicable Borrower may select, in accordance with this
-
Article II, Rate Options and Interest Periods applicable to portions of the
----------
Revolving Loans.
-
(a) Method of Selecting Types and Interest Periods for Advances. The
------------------------------------------------------------
applicable Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance or Korean Eurodollar Advance, the Interest Period
applicable to each Advance from time to time. The applicable Borrower shall
give the Agent irrevocable notice (a "BORROWING NOTICE") not later than 11:00
a.m., New York time (or Seoul time for Korean Won Advances or Korean
Eurodollar Advance) (i) on the Borrowing Date of each Base Rate Advance; (ii)
three (3) Business Days before the Borrowing Date for each Eurodollar Advance;
(iii) three (3) Business Days before the Borrowing Date for each Korean
Eurodollar Advance; and (iv) five (5) Business Days before the Borrowing Date
for each Korean Won Advance, specifying: (i) the Borrowing Date (which shall
be a Business Day) of such Advance; (ii) the aggregate amount of such Advance;
(iii) the Type of Advance selected, as applicable; and (iv) in the case of
each Eurodollar Advance or Korean Eurodollar Advance, the Interest Period.
There shall be (x) no more than twenty (20) Interest Periods in effect with
respect to all of the Revolving Loans at any time, and (y) with respect to any
Borrower individually, no more than four (4) Interest Periods in effect with
respect to all of the Revolving Loans made to such Borrower at any time, in
each case, with Interest Periods for the same term but in different currencies
or to different Borrowers being treated as separate Interest Periods. Each
Base Rate Advance shall bear interest from and including the date of the
making of such Advance to (but not including) the date of repayment thereof at
the Base Rate, changing when and as such Base Rate changes. Each Eurodollar
Advance, Korean Eurodollar Advance and Korean Won Advance shall bear interest
from and including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the interest rate
determined as applicable to such Advance. All Obligations (other than
Advances) shall bear interest from and including the date such amount is
payable under the terms of this Agreement or the other Loan Documents to (but
not including) the date of repayment thereof at the Base Rate, changing when
and as such Base Rate changes. Changes in the rate of interest on that
portion of any Advance maintained as a Base Rate Loan or such other
Obligations will take effect simultaneously with each change in the applicable
Base Rate.
(b) Determination of Applicable Margins, Applicable Letter of Credit Fee
--------------------------------------------------------------------
and Applicable Facility Fee.
------------------------------
(i) Definitions. As used in this Section 2.4(b) and in this Agreement,
----------- --------------
the following terms shall have the following meanings:
"Applicable Margins", "Applicable Facility Fee" and "Applicable Letter of
------------------ ----------------------- --------------------
Credit Fee" shall mean the Applicable Base Rate Margins and/or Applicable
-----------
Eurodollar Margins, with respect to Loans and the Applicable Facility Fee
----
and/or Applicable Letter of Credit Fee, with respect to fees payable as the
----
case may be. The Applicable Margins shall be determined, in accordance with
--
the provisions of this Section 2.4(b), by reference to the following:
- ---------------
EBITDA APPLICABLE APPLICABLE APPLICABLE LETTER OF APPLICABLE APPLICABLE
CONTRIBUTION BASE RATE EURODOLLAR MARGIN CREDIT FEE FOR FACILITY FEE FOR FACILITY FEE FOR
RATIO MARGIN FOR FOR TRANCHE A LETTERS OF CREDIT COMMITMENTS COMMITMENTS
TRANCHE A OBLIGATIONS AND ISSUED FOR THE WITH RESPECT TO WITH RESPECT TO
OBLIGATIONS APPLICABLE LETTER OF ACCOUNT OF TRANCHE A TRANCHE B
CREDIT FEE FOR LETTERS SUBSIDIARY OBLIGORS OBLIGATIONS OBLIGATIONS
OF CREDIT ISSUED FOR (OTHER THAN PURINA
THE ACCOUNT OF KOREA, INC.)
BORROWERS (OTHER
THAN PURINA KOREA,
INC.)
LEVEL I GREATER THAN
1.50 TO 1.00 0.25% 1.50% 1.75% 0.50% Z 1.75%
LEVEL II LESS THAN OR
EQUAL TO 1.50 TO
1.00 AND GREATER 0% 1.00% 1.25% 0.375% 1.25%
THAN OR EQUAL TO
1.00 TO 1.00
LEVEL III LESS THAN 1.00
TO 1.0
0% 0.75% 1.00% 0.25% 1.00%
LEVEL IV COMPANY'S
RATING EQUAL TO
OR BETTER THAN 0% 0.50% 0.75% 0.175% 0.75%
BBB- FROM S&P
OR BAA3 FROM
XXXXX'X
(ii) Determination of Applicable Margins, Applicable Letter of Credit
-----------------------------------------------------------------
Fee and Applicable Facility Fee.
---------------------------------
(A) The Applicable Margins in respect of any Loan, the Applicable Letter
of Credit Fee payable under Section 2.10(C) and the Applicable Facility Fee
---------------
payable under Section 2.10(c) shall be determined by reference to the table
----------------
set forth in clause (i) above, as applicable, on the basis of the EBITDA
-----------
Contribution Ratio determined by reference to the most recent financial
statements delivered pursuant to Section 6.1(A)(i) or 6.1(A)(ii); provided,
----------------- ---------- --------
however, for the period from the Closing Date until August 31, 1998, the
-----
Applicable Margins, Applicable Letter of Credit Fee, Applicable Facility Fee
---
shall be at Level II; provided, further that Level IV shall be applicable only
-------- -------
in the event that the Company shall have a rating of equal to or better than
BBB- from S&P or Baa3 from Xxxxx'x and, provided, further, however, that the
-------- ------- -------
Borrowers shall not be eligible for any reduction in the pricing prescribed in
this Section 2.4 in the event that as of the date of determination, the
------------
Company's Consolidated EBITDA for the most recently completed four fiscal
-
quarters (or, prior to March 31, 1999, the period from the Closing Date to the
end of the most recently completed quarter) shall be less than 80% of the
Company's forecasted Consolidated EBITDA for such period as set forth on
Exhibit G hereto.
-----
(B) Upon receipt of the financial statements delivered pursuant to
Section 6.1(A)(i) or Section 6.1(A)(ii), as applicable, the Applicable Margins
------------ ------------------
for all outstanding Loans, the Applicable Letter of Credit Fee and Applicable
Facility Fee shall be adjusted, such adjustment being effective on the first
(1st) Business Day after receipt of such financial statements and the
Compliance Certificate to be delivered in connection therewith; provided,
--------
however, if the Borrowers shall not have timely delivered such financial
---
statements in accordance with Section 6.1(A)(i) or Section 6.1(A)(ii), as
- ------------------ ------------------
applicable, beginning with the date upon which such financial statements
should have been delivered and continuing until such financial statements are
delivered, it shall be assumed for purposes of determining the Applicable
Margins, the Applicable Facility Fee and the Applicable Letter of Credit Fee
that the EBITDA Contribution Ratio was greater than 1.50 to 1.0.
(c) Interest on Advances to Purina Korea, Inc. Advances to Purina
----------------------------------------------
Korea, Inc. in Korean Won shall bear interest in the per annum rate equal to
the Korean CD Rate minus 6.00% per annum. Advances to Purina Korea, Inc. in
-----
Dollars shall bear interest at a rate per annum equal to the Korean Eurodollar
Rate.
2.5 Minimum Amount of Each Advance. Each Eurodollar Advance or Korean
------------------------------
Eurodollar Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $100,000 if in excess thereof). Each Base Rate Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), provided, however, that any Base Rate Advance may be in the amount
-------- -------
of the unused Aggregate Commitment. Each Korean Won Advance shall be in the
minimum amount of 1,000,000,000 Won (and in multiples of 500,000,000 Won if in
excess thereof).
2.6 Method of Selecting Types and Interest Periods for Conversion and
------------------------------------------------------------------
Continuation of Advances.
------------------------
(A) Right to Convert. The Borrowers may elect from time to time,
------------------
subject to the provisions of Section 2.3, Section 2.4, and this Section 2.6 to
----------- ----------- -----------
convert all or any part of a Loan of any Type into any other Type or Types of
Loans; provided that any conversion of any Eurodollar Advance or Korean
--------
Eurodollar Advance shall be made on, and only on, the last day of the Interest
Period applicable thereto.
(B) Automatic Conversion and Continuation. Base Rate Loans shall
----------------------------------------
continue as Base Rate Loans unless and until such Base Rate Loans are
converted into Eurodollar Loans. Eurodollar Loans shall continue as
Eurodollar Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Loans shall be automatically converted
into Base Rate Loans unless the applicable Borrower shall have given the Agent
requesting that, at the end of such Interest Period, such Eurodollar Loans
continue as a Eurodollar Loan. Korean Eurodollar Advances shall continue as
Korean Eurodollar Advances until repaid and Korean Won Advances shall continue
as Korean Won Advances until repaid.
(C) No Conversion Post-Default or Post-Unmatured Default.
---------------------------------------------------------
Notwithstanding anything to the contrary contained in Section 2.6(A) or
--- --------------
Section 2.6(B), no Loan may be converted into or continued as a Eurodollar
---------
Loan except with the consent of the Required Lenders when any Default or
Unmatured Default has occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
------------------------------
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of
a Base Rate Loan into a Eurodollar Loan or continuation of a Eurodollar Loan
not later than 11:00 a.m. (New York time) three Business Days before the
proposed date of such conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or
continued; and (3) the amounts of Eurodollar Loan(s) into which such Loan is
to be converted or continued and the duration of the Interest Periods
applicable thereto.
2.7 Default Rate. After the occurrence and during the continuance of a
------------
Default, the interest rate(s) applicable to the Obligations and the letter of
credit fee payable under Section 2.20 with respect to Letters of Credit shall
------------
be increased by two percent (2.0%) per annum above the Base Rate, Eurodollar
Rate, Korean CD Rate, Korean Eurodollar Rate or Applicable Letter of Credit
Fee, as applicable.
2.8 Method of Payment. All payments of principal, interest, and fees
-------------------
hereunder shall be made, without setoff, deduction or counterclaim, to the
Agent (i) at the Agent's office in New York, New York (or, in the case of
Advances to Purina Korea, Inc., Seoul, Korea) in immediately available funds
or at any other Lending Installation of the Agent specified in writing by 9:00
a.m. (New York time) on the day before the date when due by the Agent to the
Company, by 12:00 noon (New York time) with respect to Advances to Borrowers
other than Purina Korea, Inc. and 12:00 noon (Seoul time) with respect to
Advances to Purina Korea, Inc. on the date when due and shall be made ratably
among the applicable Lenders with respect to Revolving Advances in proportion
to their Revolving Credit Shares (unless such amount is not to be shared
ratably in accordance with the other terms hereof). Each Advance shall be
repaid or prepaid in the currency in which it was made in the amount borrowed
and interest payable thereon shall be paid in such currency. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to Article XIII or at any Lending
------------
Installation specified in a notice received by the Agent from such Lender by
9:00 a.m. (New York time) on the Business Day prior to the date such payment
is to be made. The Borrowers authorize the Agent to charge any account of any
Borrower maintained with the Agent, as applicable, for each payment of
principal, interest and fees as it becomes due hereunder if not paid when due.
Notwithstanding the foregoing provisions of this Section, if, after the making
of any Advance in Korean Won, currency control or exchange regulations are
imposed in the Republic of Korea with the result that different types of such
currency (the "NEW CURRENCY") are introduced and the type of currency in which
the Advance was made (the "ORIGINAL CURRENCY") no longer exists or Purina
Korea, Inc. is not able to make payment to the Agent for the account of the
applicable Lenders in such Original Currency, then all payments to be made by
Purina Korea, Inc. hereunder in such Original Currency shall be made in such
amount and such type of the New Currency or Dollars as shall be equivalent to
the amount of such payment otherwise due hereunder in the Original Currency as
determined as of the date of repayment, it being the intention of the parties
hereto that the Borrowers take all risks of the imposition of any such
currency control or exchange regulations.
2.9 Evidence of Debt; Telephonic Notices.
----------------------------------------
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(b) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period,
if any, applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to subsections
-----------
(a) or (b) of this Section shall be prima facie evidence of the existence and
--- --- ----- -----
amounts of the obligations recorded therein; provided that the failure of any
--------
Lender or the Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of any Borrower to repay the Loans in
accordance with the terms of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it each be
evidenced by a promissory note. In such event, each Borrower shall prepare,
execute and deliver to such Lender a promissory note for Revolving Loans
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Agent and
consistent with the terms of this Agreement. Thereafter, the Loans evidenced
by such promissory notes and interest thereon shall at all times (including
after assignment pursuant to Section 12.3) be represented by one or more
-------------
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
(e) Each Borrower authorizes the Lenders and the Agent to extend,
convert or continue Advances, effect selections of Types of Advances and to
transfer funds based on telephonic notices made by any person or persons the
Agent or any Lender in good faith believes to be an Authorized Officer acting
on behalf of any Borrower. Each Borrower agrees to deliver promptly to the
Agent a written confirmation of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error. In case of disagreement
concerning such notices, if the Agent has recorded telephonic borrowing
notices, such recordings will be made available to the Company.
2.10 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest
-------------------------------------------------------------------
and Fee Basis; Taxes; Loan and Control Accounts.
------------------------------------------------------
(A) Promise to Pay. Each of the Borrowers unconditionally promises to
--------------
pay when due without setoff, deduction or counterclaim the principal amount of
each Loan made to it and all other Obligations incurred by it, and to pay all
unpaid interest accrued thereon, in accordance with the terms of this
Agreement, it being understood and agreed that each Subsidiary Borrower and
Subsidiary Obligor shall be obligated to repay only the Loans made to it and
pay the other Obligations incurred by it and certain other Loans made and
Obligations incurred by other Subsidiary Borrowers and Subsidiary Obligors.
Subject to the foregoing, the Borrowers and Subsidiary Obligors agree that
they will pay the Tranche A Obligations on or before the Termination Date and
the Tranche B Obligations on or before the date on which the Aggregate
Commitment with respect to Tranche B Obligations shall expire.
(B) Interest Payment Dates. Interest accrued on each Base Rate Loan
------------------------
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Base Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Loan or
Korean Eurodollar Loan or Korean Won Loan shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Loan or
Korean Eurodollar Loan is prepaid, whether by acceleration or otherwise, and
at maturity; provided, interest accrued on each Eurodollar Loan or Korean
--------
Eurodollar Loan having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest
Period. Interest accrued on the principal balance of all other Obligations
shall be payable in arrears (i) upon repayment thereof in full or in part,
(ii) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise) and (iii) if
not theretofore paid in full, on demand, commencing on the first such day
following the date such Obligation became payable pursuant to the terms of
this Agreement or the other Loan Documents.
(C) Fees. (i) The Company shall pay or cause the appropriate
----
Subsidiary to pay to the Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, a facility fee accruing at the rate of the
Applicable Facility Fee per annum from and after the Closing Date until the
Termination Date on the sum of the Aggregate Commitment in effect from time to
time minus the Maximum Korean Won Commitment. All such facility fees payable
under this clause (C) shall be payable quarterly in arrears on each Payment
-----------
Date commencing June 30, 1998 and on the Termination Date. In addition, the
Company shall pay to the Agent, for the account of the Lenders in accordance
with their Pro Rata Shares, a Korean facility fee accruing at the rate of
3.00% per annum payable on the Maximum Korean Won Commitment from and after
the Closing Date until the Termination Date, payable quarterly in arrears on
each Payment Date commencing June 30, 1998 and on the Termination Date.
(ii) The Company agrees to pay or cause the appropriate Subsidiary to
pay to the Agent the fees set forth in the letter agreement between the Agent
and the Company dated February 25, 1998.
(D) Interest and Fee Basis. Interest on Eurodollar Loans, Korean
-------------------------
Eurodollar Loans and Korean Won Loans and fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest on Base Rate Loans
shall be calculated for actual days elapsed on the basis of a 365/366-day
year. Interest shall be payable for the day an Obligation is incurred but not
for the day of any payment on the amount paid if payment is received prior to
12:00 noon (New York time) with respect to Advances (other than Advances to
Purina Korea, Inc.) and 12:00 noon (Seoul time) with respect to Advances to
Purina Korea, Inc. If any payment of principal of or interest on a Loan or
any payment of any other Obligations shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment; provided,
--------
however, if such extension of payment would cause payment of principal or
---
interest on any Eurodollar Loan or Korean Eurodollar Loan to be made in the
next following calendar month, such payment shall be made on the immediately
preceding Business Day.
For purposes of the Interest Act (Canada): (i) whenever any interest
under this Agreement is calculated using a rate based on a year of 360 days,
such rate determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to (x) the applicable rate based on a year of 360 days,
(y) multiplied by the actual number of days in the calendar year in which the
period for which such interest is calculated ends, and (z) divided by 360;
(ii) the principle of deemed reinvestment of interest shall not apply to any
interest calculation under this Agreement; and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.
Notwithstanding any provision to the contrary contained in this
Agreement, in no event shall the aggregate "interest" (as defined in Section
347 of the Criminal Code (Canada), as the same may be amended, replaced or
re-enacted from time to time) payable under this Agreement exceed the maximum
amount of interest on the "credit advanced" (as defined in that section) under
this Agreement lawfully permitted under that section and, if any payment,
collection or demand pursuant to this Agreement in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of
that section, such payment, collection or demand shall be deemed to have been
made by mutual mistake of the relevant Borrower and the Agent and the Lenders
and the amount of such payment or collection shall be refunded to the relevant
Borrower. For purposes of this Agreement, the effective annual rate of
interest shall be determined in accordance with generally accepted actuarial
practices and principles over the term the Revolving Credit Loans are
outstanding on the basis of annual compounding of the lawfully permitted rate
of interest and, in the event of any dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by the Agent will be conclusive for
the purposes of such determination.
(E) Taxes.
-----
(i) Any and all payments by any of the Borrowers or Subsidiary Obligors
hereunder shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings or any liabilities with respect thereto including those arising
after the date hereof as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by a
Governmental Authority but excluding, in the case of each Lender and the
Agent, such taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by such Lender's or Agent's, as the case
may be, income by the United States of America or any Governmental Authority
of the jurisdiction under the laws of which such Lender or Agent, as the case
may be, is organized or incorporated (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities which the Agent or
a Lender determines to be applicable to this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit being
hereinafter referred to as "TAXES"). Subject to Section 2.10(E)(vii), if any
---------------------
of the Borrowers or Subsidiary Obligors shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under the other Loan
Documents to any Lender or the Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.10(E))
---------------
such Lender or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Borrower or
Subsidiary Obligor shall make such deductions, and (iii) such Borrower or
Subsidiary Obligor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. If a
withholding tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after the date of this Agreement,
to such payments by any of the Borrowers made to the Lending Installation or
any other office that a Lender may claim as its Lending Installation, or (z)
after such Lender's selection and designation of any other Lending
Installation, to such payments made to such other Lending Installation, such
Lender shall use reasonable efforts to make, fund and maintain its Loans and
issue Letters of Credit through another Lending Installation of such Lender in
another jurisdiction so as to reduce the Borrowers' liability hereunder, if
the making, funding or maintenance of such Loans and the issuance of such
Letters of Credit through such other Lending Installation of such Lender does
not, in the good faith judgment of such Lender, otherwise adversely affect
such Loans, or obligations under the Commitments or such Lender. With respect
to such deduction or withholding for or on account of any Taxes and to confirm
that all such Taxes have been paid to the appropriate Governmental
Authorities, the Company shall promptly (and in any event not later than
thirty (30) days after receipt) furnish to each Lender and the Agent such
certificates, receipts and other documents as may be required (in the judgment
of such Lender or the Agent) to establish any tax credit to which such Lender
or the Agent may be entitled. A payment may be made by the Company or by the
Subsidiary that is the Borrower with respect to the Loan that gives rise to
such payment.
(ii) In addition, the Company agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges, or
similar levies that arise from any payment made hereunder, from the issuance
of Letters of Credit hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit (hereinafter
referred to as "OTHER TAXES").
(iii) Subject to Section 2.10(E)(vii), the Company indemnifies each
---------------------
Lender and the Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.10(E)) paid by such Lender
---------------
or the Agent (as the case may be) and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. This
indem-nification shall be made within thirty (30) days after the date such
Lender or the Agent (as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender or the Agent
under this Section 2.10(E) submitted to the Company and the Agent by such
----------------
Lender or the Agent shall show in reasonable detail the amount payable and the
calculations used to determine such amount and shall, absent manifest error,
be final, conclusive and binding upon all parties hereto.
(iv) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes by any Borrower or Subsidiary Obligor, such Borrower or Subsidiary
Obligor shall furnish to the Agent the original or a certified copy of a
receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of any of
the Borrowers or Subsidiary Obligor hereunder, the agreements and obligations
of the Borrowers and Subsidiary Obligor contained in this Section 2.10(E)
---------------
shall survive the payment in full of principal and interest hereunder, the
termination of the Letters of Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrowers and Subsidiary
Obligor under this Section 2.10(E) (except as expressly provided by subsection
--------------- ----------
(vii) below), (A) each Lender that has a Commitment that is not created or
-----
organized under the laws of the United States of America or a political
---
subdivision thereof shall deliver to the Company and the Agent on or before
---
the Closing Date, or, if later, the date on which such Lender becomes a Lender
--
pursuant to Section 12.3 hereof, a true and accurate certificate executed in
------------
duplicate by a duly authorized officer of such Lender, in a form satisfactory
to the Company and the Agent, to the effect that such Lender is capable under
the provisions of an applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied by two executed
copies of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of the
IRS) of receiving payments of interest and fees hereunder without deduction or
withholding of United States federal income tax and (B) each Lender shall
deliver to the Company and the Agent on or before the Closing Date, or, if
later, the date on which such Lender becomes a Lender, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender,
in a form satisfactory to the Company and the Agent, to the effect that such
Lender is capable under the provisions of an applicable tax treaty or under
the provisions of applicable law of receiving payments of interest with
respect to the Advances to Purina Korea, Inc. hereunder without deduction or
withholding of income tax. Each such Lender further agrees to deliver to the
Company and the Agent, from time to time a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender
substantially in a form satisfactory to the Company and the Agent, before or
promptly upon the occurrence of any event requiring a change in the most
recent certificate previously delivered by it pursuant to this Section
-------
2.10(E)(vi). Further, each Lender which delivers a certificate accompanied by
----
Form 1001 of the IRS covenants and agrees to deliver to the Company and the
Agent within fifteen (15) days prior to January 1, 1999, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is still in
effect, another such certificate and two accurate and complete original signed
copies of Form 1001 (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to the Company and the Agent within fifteen (15) days prior
to the beginning of each subsequent taxable year of such Lender during which
this Agreement is still in effect, another such certificate and two accurate
and complete original signed copies of IRS Form 4224 (or any successor form or
forms required under the Code or the applicable regulations promulgated
thereunder).
Each such certificate shall certify pursuant to this Section 2.10(E)(vi)
-------------------
as to one of the following:
(a) that such Lender is capable of receiving payments of interest
hereunder without deduction or withholding of United States of America federal
income tax;
(b) that such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of the applicable income tax as
specified therein but is capable of recovering the full amount of any such
deduction or withholding from a source other than the Borrowers and the
Subsidiary Obligor and will not seek any such recovery from the Borrowers or
the Subsidiary Obligor; or
(c) that, as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by a
Governmental Authority after the date such Lender became a party hereto, such
Lender is not capable of receiving payments of interest hereunder without
deduction or withholding of applicable income tax as specified therein and
that it is not capable of recovering the full amount of the same from a source
other than the Borrowers and the Subsidiary Obligors.
Each Lender shall promptly furnish to the Company and the Agent such
additional documents as may be reasonably required by the Company or the Agent
to establish any exemption from or reduction of any Taxes or Other Taxes
required to be deducted or withheld and which may be obtained without undue
expense to such Lender.
A Borrower shall provide such information and take such action as a
Lender may reasonably request without undue expense to such Borrower to enable
the Lender to comply with the foregoing provisions of this subsection (vi).
---------------
(vii) None of the Borrowers shall be required to pay any additional
amounts under subsection (i) above or indemnification under subsection (iii)
-------------- ----------------
above to the extent that the obligation to pay such additional amounts or
indemnification would not have arisen but for: (a) a failure by the Lender or
Agent to comply with the provisions of subsection (vi) above; or (b) the
---------------
certifications referred to in subsection (vi) above not being true.
----------------
(viii) Each Lender and the Agent agree that if it shall become aware
that it is entitled to receive a refund or a tax credit in respect of Taxes or
Other Taxes as to which it has been indemnified by the Company or any other
Borrower pursuant to this Section 2.10(E), it shall promptly notify the
----------------
Company of the availability of such refund or tax credit and at the request of
the Company will apply for such refund or take the benefit of such tax credit;
provided, however the failure to provide such notice shall not relieve the
Company or any other Borrower of any of their Obligations hereunder. Upon
receipt of such refund or the benefit of such tax credit, the Lender or Agent
agrees to pay such refund or an amount equal to the benefit of such tax credit
to the applicable Borrower along with any interest actually received from the
taxing authority, net of all out-of-pocket expenses of such Lender or Agent
incurred with respect to such refund or tax credit.
(F) Loan Account. Each Lender shall maintain in accordance with its
-------------
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of each of the Borrowers to such Lender owing to such Lender from
time to time, including the amount of principal and interest payable paid to
such Lender from time to time hereunder.
(G) Entries Binding. The entries made in each Loan Account shall be
----------------
conclusive and binding for all purposes, absent manifest error, unless the
Company objects to information contained in the Loan Account within thirty
(30) days of the Company's receipt of such information.
2.11 Notification of Advances, Interest Rates, Prepayments and Aggregate
-------------------------------------------------------------------
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
----------------------
each applicable Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice for Revolving Loans, Conversion/Continuation Notice
with respect to Revolving Loans, and repayment notice received by it
hereunder. The Agent will notify each applicable Lender of the interest rate
applicable to each Eurodollar Loan, Korean Eurodollar Loan and Korean Won Loan
promptly upon determination of such interest rate, and the Agent will give
each applicable Lender prompt notice of each change in the Alternate Base
Rate.
2.12 Lending Installations. Each Lender may book its Loans at any
----------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrowers, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.13 Non-Receipt of Funds by the Agent. Unless the applicable Borrower
---------------------------------
or a Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (i) in the case of a Lender,
the proceeds of a Loan or (ii) in the case of a Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders for
the account of the applicable Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such Lender or
Borrower, as the case may be, has not in fact made such payment to the Agent
the recipient of such payment shall, on demand by the Agent, repay to the
Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (i) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (ii) in the case of payment by a Borrower, the
interest rate applicable to the relevant Loan.
2.14 Termination Date. This Agreement shall be effective until the
-----------------
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent
indemnity and reimbursement obligations) shall have been fully and
indefeasibly paid and satisfied, all financing arrangements among the
Borrowers and the Lenders shall have been terminated (other than under Hedging
Agreements) and all of the Letters of Credit shall have expired, been canceled
or terminated, all of the rights and remedies under this Agreement and the
other Loan Documents shall survive and the Agent shall be entitled to retain
its security interest in and to all existing and future Collateral for the
benefit of itself and the Holders of Secured Obligations.
2.15 Replacement of Certain Lenders. In the event a Lender ("AFFECTED
------------------------------
LENDER") shall have: (i) failed to fund its Revolving Credit Share of any
Advance requested by any Borrower which such Lender is obligated to fund under
the terms of this Agreement and which failure has not been cured, (ii)
requested compensation from any Borrower under Sections 2.10(E), 3.1 or 3.2 to
---------------- --- ---
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 3.3 claiming that such Lender is unable to extend
-----------
Eurodollar Loans to any Borrower for reasons not generally applicable to the
other Lenders, (iv) declined to extend the Termination Date or the expiry date
of the Aggregate Commitment with respect to the Tranche B Obligations pursuant
to Section 2.24, or (v) has invoked Section 9.2, then, in any such case, any
------------- -----------
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by any Borrower and a copy to the
Borrowers in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly executed assignment and acceptance agreements in
substantially the form of Exhibit D five (5) Business Days after the date of
---------
such demand, to one or more financial institutions that comply with the
provisions of Section 12.3(A) (and, if selected by the Borrowers is reasonably
---------------
acceptable to the Agent, and, so long as no Default shall have occurred and is
continuing, if selected by the Agent is reasonably acceptable to the Company)
which any Borrower or the Agent, as the case may be, shall have engaged for
such purpose ("REPLACEMENT LENDER"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit and its obligation to
participate in Letters of Credit hereunder) in accordance with Section 12.3.
------------
The Agent agrees, upon the occurrence of such events with respect to an
Affected Lender and upon the written request of any Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions qualified to act as a Replacement Lender. Further, with respect
to such assignment the Affected Lender shall have concurrently received, in
cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
Sections 2.10(E), 3.1, and 3.2 with respect to such Affected Lender and
--------------- --- ---
compensation payable under Section 2.10(C) in the event of any replacement of
---- ---------------
any Affected Lender under clause (ii) or clause (iii) of this Section 2.15;
----------- ------------ ------------
provided that upon such Affected Lender's replacement, such Affected Lender
------
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10(E), 3.1, 3.2, 3.4, and 9.7, as well as to any fees
---------------- --- --- --- ---
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under Section 10.8. Upon the replacement of any Affected Lender
-------------
pursuant to this Section 2.15, the provisions of Section 8.2 shall continue to
------------ -----------
apply with respect to Advances which are then outstanding with respect to
which the Affected Lender failed to fund its Revolving Credit Share and which
failure has not been cured.
2.16 Letters of Credit. (a) Upon receipt of duly executed applications
-----------------
therefor in substantially the form of Exhibit H, and such other documents,
---------
instructions and agreements as such Issuing Lender may reasonably require, and
subject to the provisions of Article IV, the Agent shall, or any other Lender
----------
in its sole discretion may, issue standby or commercial letters of credit
denominated in Dollars for the account of the Company or one of the Subsidiary
Borrowers or Subsidiary Obligors or standby letters of credit denominated in
Korean Won for the account of Purina Korea, Inc., on terms as are satisfactory
to such Issuing Lender in substantially the form of Exhibit I; provided,
--------- --------
however, that no Letter of Credit will be issued hereunder by an Issuing
--
Lender if on the date of issuance, before or after taking such Letter of
Credit into account, (i) the Dollar Amount of the Revolving Credit Obligations
at such time would exceed the Aggregate Commitments at such time or (ii) the
amount (or with respect to standby Letters of Credit denominated in Korean
Won, the Dollar Amount) of the Revolving Credit Obligations owed by any of the
Borrowers or Subsidiary Obligors pursuant to this Agreement would exceed the
corresponding amounts listed below:
Agribrands International, Inc. $ 5,000,000
Agribrands Canada, Inc. $ 6,500,000
Purina Italia S.p.A. $ 4,000,000
Purina Espana, S.A. $ 2,500,000
Purina Hungaria Animal Feed
Production & Trading Company Ltd. $ 2,000,000
Purina Korea, Inc. $15,000,000
Industrias Purina S.A. de C.V. $ 5,000,000
Purina Colombiana S.A. $ 5,000,000
Agribrands Purina do Brasil, Ltda. $ 5,000,000
Purina Philippines, Inc. $ 2,500,000
Purina de Venezuela, C.A. $ 2,500,000
and provided, further, that no Letter of Credit shall be issued which has an
-------- -------
expiration date later than the date which is five (5) Business Days
immediately preceding the Termination Date; and provided, further, that all
-------- -------
commercial Letters of Credit requested hereunder shall be denominated only in
Dollars; and provided, however, that no Issuing Lender shall be obligated to
-------- -------
issue any Letter of Credit hereunder to any Borrower or Subsidiary Obligor
unless the "Revolving Credit Obligations" owed by such Borrower or Subsidiary
Obligor under and as defined under the Long Term Credit Agreement shall be
equal to the amounts set forth in the first proviso of the first sentence of
Section 2.16 of the Long Term Credit Agreement, provided that, with respect to
--------
standby Letters of Credit issued for the account of Purina Korea, Inc. and
denominated in Korean Won and subject to the conditions precedent set forth in
Sections 4.1 and 4.2 hereof, Purina Korea, Inc. may request standby Letters of
------------ ---
Credit denominated in Korean Won hereunder so long as the Dollar Amount of
"Revolving Credit Obligations" denominated in Korean Won under and as defined
in the Long Term Credit Agreement is equal to the "Maximum Korean Won
Commitment" under and as defined in the Long Term Credit Agreement. Each
Letter of Credit issued for the account of any Borrower may, upon the request
of the applicable Borrower, include a provision whereby such Letter of Credit
shall be renewed automatically for additional consecutive periods of 12 months
or less (but not beyond the date that is five Business Days prior to the
Termination Date) unless the Issuing Lender notifies the beneficiary thereof
at least 30 days prior to the then-applicable expiry date that such Letter of
Credit will not be renewed. Each Letter of Credit issued for the account of
any Subsidiary Obligor shall be renewed or extended beyond the then effective
expiry date of the Aggregate Commitment for the Tranche B Obligations at the
request of the applicable Subsidiary Obligor only with the consent of all of
the Lenders. Prior to issuing any Letter of Credit, the applicable Issuing
Lender shall request and the Agent shall provide confirmation that the request
for such Letter of Credit complies with the provisions of this Section
-------
2.16(a). If the Agent notifies the applicable Issuing Lender that it is
authorized to issue such Letter of Credit, and the conditions described in
Article IV have been satisfied, then such Issuing Lender shall issue such
--------
Letter of Credit as requested. The applicable Issuing Lender shall give the
-
Agent and each Lender prompt notice of the issuance of any such Letter of
Credit by it. Each Issuing Lender shall furnish to the Agent and each Lender
on the first Business Day of each month a written report, with respect to each
outstanding Letter of Credit issued by such Issuing Lender, summarizing
whether such Letter of Credit is a standby or commercial Letter of Credit, the
maximum amount available to be drawn thereon, and the beneficiary and the
issuance and expiration dates thereof. Together with each such monthly
report each Issuing Lender shall provide the Agent a copy of each Letter of
Credit issued by such Issuing Bank during the previous month.
(b) Reserved.
--------
2.17 Letter of Credit Participation. Immediately upon the issuance of
------------------------------
each Letter of Credit by any Issuing Lender hereunder, each Lender that has a
Commitment shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable Issuing Lender an
undivided interest and participation in and to such Letter of Credit, the
obligations of the applicable Borrower or Subsidiary Obligor in respect
thereof, and the liability of the applicable Issuing Lender thereunder
(collectively, an "L/C INTEREST") in an amount equal to the amount available
for drawing under such Letter of Credit multiplied by such Lender's Revolving
Credit Share.
The applicable Issuing Lender will notify the Agent promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit and the Agent will promptly notify each Lender that has a Commitment.
On or before the Business Day on which the applicable Issuing Lender makes
payment of each such L/C Draft or any other draw on a Letter of Credit, on
demand of the Agent received by each Lender that has a Commitment not later
than 12:00 noon (Seoul, Korea time) on the fifth (5th) Business Day after the
date of such demand with respect to Letters of Credit issued for the account
of Purina Korea, Inc., and 12:00 noon (New York time) on the third (3rd)
Business Day after the date of such demand with respect to all other Letters
of Credit, each Lender (other than the Issuing Lender) shall make payment on
such Business Day to the Agent for the account of the applicable Issuing
Lender, in immediately available funds in the applicable currency in an amount
equal to such Lender's Revolving Credit Share of the amount of such payment or
draw.
Upon the Agent's receipt of funds as a result of an Issuing Lender's
payment on an L/C Draft or any other draw on a Letter of Credit issued by an
Issuing Lender, the Agent shall promptly pay such funds to the Issuing Lender.
The obligation of each Lender that has a Commitment to pay the Agent for the
account of the applicable Issuing Lender under this Section 2.17 shall be
------------
unconditional, continuing, irrevocable and absolute. In the event that any
such Lender fails to make payment to the Agent of any amount due under this
Section 2.17, the Agent shall be entitled to receive, retain and apply against
----------
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent on behalf of the applicable Issuing Lender receives
such payment from such Lender or such obligation is otherwise fully satisfied;
provided, however, that nothing contained in this sentence shall relieve such
-------- -------
Lender of its obligation to reimburse the Agent for such amount in accordance
with this Section 2.17.
-------------
2.18 Reimbursement Obligation. Each of the Borrowers and Subsidiary
-------------------------
Obligors agrees unconditionally, irrevocably and absolutely upon receipt of
notice from the Agent or the applicable Issuing Lender to pay immediately to
the Agent, for the account of the applicable Issuing Lender or the account of
the Lenders, as the case may be, the amount of each advance which may be drawn
under or pursuant to a Letter of Credit issued for its account or an L/C Draft
related thereto (such obligation of each of the Borrowers and Subsidiary
Obligors to reimburse the Issuing Lender or the Agent for an advance made
under a Letter of Credit or L/C Draft being hereinafter referred to as a
"REIMBURSEMENT OBLIGATION" with respect to such Letter of Credit or L/C
Draft), each such payment to be made by the applicable Borrower or Subsidiary
Obligor to the Agent no later than 1:00 p.m. (New York time) or with respect
to Reimbursement Obligations owed by Purina Korea, Inc. 1:00 p.m. (Seoul time)
on the Business Day on which the applicable Issuing Lender makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit,
1:00 p.m. (New York time) or with respect to Reimbursement Obligations owed by
Purina Korea, Inc. 1:00 p.m. (Seoul time) on the date specified in a demand by
the Agent and such payment shall be made in the applicable currency in which
such Letter of Credit was issued. Any Issuing Lender may direct the Agent to
make such demand with respect to Letters of Credit issued by such Issuing
Lender. If any Borrower at any time fails to repay a Reimbursement Obligation
pursuant to this Section 2.18, such Borrower shall be deemed to have elected
------------
to borrow a Revolving Loan from the applicable Lenders, as of the date of the
Advance giving rise to the Reimbursement Obligation equal in amount to the
amount of the unpaid Reimbursement Obligation. Such Revolving Loan shall be
made as of the date of the payment giving rise to such Reimbursement
Obligation, automatically, without notice and without any requirement to
satisfy the conditions precedent otherwise applicable to an Advance of
Revolving Loans if such Borrower shall have failed to make such payment to the
Agent for the account of the applicable Issuing Lender prior to such time.
Such Revolving Loans shall constitute a Base Rate Advance, or, in the case of
standby Letters of Credit denominated in Korean Won, a Korean Won Advance, the
proceeds of which Advance shall be used to repay such Reimbursement
Obligation. If, for any reason, any Borrower or Subsidiary Obligor fails to
repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and, for any reason, the Lenders are unable to make or have no
obligation to make a Revolving Loan, then such Reimbursement Obligation shall
bear interest from and after such day, until paid in full, at the interest
rate applicable to a Base Rate Advance, or in the case of standby Letters of
Credit denominated in Korean Won, at the Korean CD Rate.
2.19 Cash Collateral. Notwithstanding anything to the contrary herein
---------------
or in any application for a Letter of Credit, after the occurrence and during
the continuance of Default, each Borrower and Subsidiary Obligor shall, upon
the Agent's demand, deliver to the Agent for the benefit of the Lenders, cash
collateral, having a value, as determined by such Lenders, equal to the
aggregate outstanding L/C Obligations of such Borrower or Subsidiary Obligor
in addition to amounts on deposit in the Cash Collateral Account. Any such
additional collateral shall be held by the Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Agent for the benefit
of the Lenders as collateral security for the Borrowers' and Subsidiary
Obligors' obligations in respect of this Agreement and each of the Letters of
Credit and L/C Drafts. Such amounts shall be applied to reimburse the Agent
or each Issuing Lender, as applicable, for drawings or payments under or
pursuant to Letters of Credit or L/C Drafts, or if no such reimbursement is
required, to payment of such of the other Obligations as the Agent shall
determine. If no Default shall be continuing, amounts remaining in any cash
collateral account (other than the Cash Collateral Account) established
pursuant to this Section 2.19 which are not to be applied to reimburse the
-------------
Agent for amounts actually paid or to be paid by the Agent in respect of a
Letter of Credit or L/C Draft, shall be promptly returned to the applicable
Borrower (after deduction of the Agent's expenses incurred in connection with
such cash collateral account).
2.20 Letter of Credit Fees. The Company agrees to pay (i) quarterly, in
---------------------
arrears, on each Payment Date to the Agent for the ratable benefit of the
Lenders having Commitments, except as set forth in Section 8.2, a letter of
-----------
credit fee ("LETTER OF CREDIT FEE") in the amount of:
(w) with respect to Letters of Credit issued for the account of the
Borrowers (other than Purina Korea, Inc.) and the Subsidiary Obligors (other
than Purina Korea, Inc.), a rate per annum equal to the Applicable Letter of
Credit Fee on the aggregate average daily outstanding amount available for
drawing under all of the Letters of Credit issued for its account;
(x) with respect to standby Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Dollars, a per annum rate equal to 3.50%
on the aggregate average daily outstanding amount available for drawing under
all standby Letters of Credit denominated in Dollars and issued for its
account;
(y) with respect to standby Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Korean Won, a per annum rate equal to
1.75% on the aggregate average daily outstanding amount available for drawing
under all of the standby Letters of Credit denominated in Korean Won and
issued for its account; and
(z) with respect to commercial Letters of Credit issued for the account of
Purina Korea, Inc. and denominated in Dollars, a per annum rate equal to 1.50%
on the aggregate average daily outstanding amount available for drawing under
all of the commercial Letters of Credit denominated in Dollars and issued for
its account; plus
----
(ii) to the Agent for the benefit of the Issuing Lenders, a fronting fee of
one-eighth of one percent (0.125%) per annum on the aggregate average daily
outstanding Dollar Amount available for drawing under all of the Letters of
Credit issued for the account of any Borrower or Subsidiary Obligor payable
quarterly, in arrears, on each Payment Date; plus
----
(iii) in each case, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Lender with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time
of invoice of such amounts.
2.21 Indemnification; Exoneration. (a) In addition to amounts payable
----------------------------
as elsewhere provided in this Agreement, each Borrower and Subsidiary Obligor
with respect to Letters of Credit issued for its account agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Lender and each
Lender from and against any and all liabilities and costs which the Agent, any
Issuing Lender or any Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit other than, in
the case of the Issuing Lender, as a result of its gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the Issuing Lender of a Letter of Credit
to honor a drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
(b) As among the Borrowers, the Subsidiary Obligors, the Lenders, the
Issuing Lenders and the Agent, the Borrowers and Subsidiary Obligors assume
all risks of the acts and omissions of, or misuse of such Letter of Credit by,
the beneficiary of any Letter of Credit. In furtherance and not in limitation
of the foregoing, subject to the provisions of the Letter of Credit
applications and Letter of Credit reimbursement agreements executed by the
applicable Borrower or Subsidiary Obligor at the time of request for any
Letter of Credit, the Issuing Lender of a Letter of Credit, the Agent and the
Lenders shall not be responsible (in the absence of gross negligence or
willful misconduct in connection therewith, as determined by the final
judgment of a court of competent jurisdiction): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance of the
Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply duly with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, or other similar form of teletransmission or otherwise; (v) for errors
in interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Lender and the
Lenders including, without limitation, any Governmental Acts. None of the
above shall affect, impair, or prevent the vesting of any of the Issuing
Lender's rights or powers under this Section 2.21.
-------------
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by an Issuing
Lender under or in connection with Letters of Credit issued on behalf of any
Borrower or Subsidiary Obligor or any related certificates shall not, in the
absence of gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, put the Issuing Lender, the
Agent or any Lender under any resulting liability to any Borrower or
Subsidiary Obligor or relieve any Borrower or Subsidiary Obligor of any of its
obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrowers or the Subsidiary Obligors hereunder, the agreements and obligations
of the Borrowers contained in this Section 2.21 shall survive the payment in
------------
full of principal and interest hereunder, the termination of the Letters of
Credit and the termination of this Agreement.
2.22 Judgment Currency. If, for the purposes of obtaining judgment in
-----------------
any court, it is necessary to convert a sum due from a Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein (the
"SPECIFIED CURRENCY") into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the Agent
could purchase the specified currency with such other currency at the Agent's
main office in New York, New York or Seoul, Korea or any other applicable
local office on the Business Day preceding that on which the final,
non-appealable judgment is given. The obligations of the applicable Borrower
in respect of any sum due to any Lender or the Agent hereunder shall,
notwithstanding any judgment in a currency other than the specified currency,
be discharged only to the extent that on the Business Day following receipt by
such Lender or Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or Agent (as the case may be) may in
accordance with normal, reasonable banking procedures purchase the specified
currency with such other currency. If the amount of the specified currency so
purchased is less than the sum originally due to such Lender or Agent, as the
case may be, in the specified currency, the applicable Borrower agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or Agent, as the
case may be, against such loss, and if the amount of the specified currency so
purchased exceeds (a) the sum originally due to any Lender or Agent, as the
case may be, in the specified currency and (b) any amounts shared with other
Lenders as a result of allocations of such excess as a disproportionate
payment to such Lender under Section 11.2, such Lender or Agent, as the case
------------
may be, agrees to remit such excess to the applicable Borrower. Without
prejudice to the survival of any of the other agreements of the Borrowers
hereunder, the agreements and obligations of the Borrowers in this Section
-------
2.22 shall survive the termination of this Agreement and the payment of all
-
other amounts owing hereunder.
2.23 Currency Disruption. Notwithstanding the satisfaction of all
--------------------
conditions referred to in Article II with respect to any Advance in Korean Won
----------
or in Dollars to Purina Korea, Inc., if, after the Closing Date, a material
adverse change in the banking market (including, without limitation, a
significant down-grading of the credit ratings of the major domestic banks in
the Republic of Korea or the sovereign debt of the Republic of Korea) occurs
or bank regulatory circumstances change or currency controls or restrictions
or other exchange regulations are imposed or other circumstances arise as a
result of which, in the reasonable opinion of the Agent or the Required
Lenders, Korean Won or Dollars in Korea are unavailable to the Lenders or are
no longer readily available or freely traded or other exchange regulations are
imposed in the Republic or Korea with the result that different types of
currency are introduced, then the Advances and standby Letters of Credit
denominated in Korean Won and the Advances in Dollars to Purina Korea, Inc.
and standby Letters of Credit denominated in Dollars for the account of Purina
Korea, Inc. shall no longer be available until such time as the Agent or the
Required Lenders determine that the disqualifying event or events no longer
exist; provided, that during the period that such Korean Won or Letters of
--------
Credit denominated in Dollars are unavailable pursuant to this Section 2.23,
------------
the Company's obligation to pay the Korean facility fee pursuant to Section
-------
2.10(C)(i) shall be suspended.
--------
2.24 Termination Date Extension. The Aggregate Commitment shall expire
--------------------------
on the Termination Date. Within the period beginning 59 days and ending 30
days before the then effective Termination Date, the Company may request in
writing that the Termination Date be extended for an additional period of 364
days, including the then effective Termination Date as one of the days in the
calculation of days elapsed. Within 30 days after such request, each Lender
may, in its sole discretion, agree to such extension to a new Termination Date
not more than 364 days following the then effective Termination Date by giving
written notice of such agreement to the Company and the Agent (and the failure
to provide such notice shall be determined to be a decision not to extend).
The Commitment of each Lender that declines to extend with respect to the
Aggregate Commitment may, at the option of the Company, be replaced in
accordance with Section 12.3 (but only to the extent a replacement Lender is
------------
then available) or the Aggregate Commitment reduced. The Required Lenders
must agree to any extension with respect to the Termination Date for any such
extension to become effective.
ARTICLE III: CHANGE IN CIRCUMSTANCES
------------------------------------------
3.1 Yield Protection. If any law or any governmental or
-----------------
quasi-governmental rule, regulation, policy, guideline or directive (whether
-----
or not having the force of law) adopted after the date of this Agreement and
having general applicability to all banks within the jurisdiction in which
such Lender operates (excluding, for the avoidance of doubt, the effect of and
phasing in of capital requirements or other regulations or guidelines passed
prior to the date of this Agreement), or any interpretation or application
thereof by any Governmental Authority charged with the interpretation or
application thereof, or the compliance of any Lender therewith,
(i) subjects any Lender (each reference in this Section 3.1 to a Lender
-----------
being in its capacity as a Lender or an Issuing Lender, or all of the
foregoing) or any applicable Lending Installation to any tax, duty, charge or
withholding on or from payments due from any of the Borrowers (excluding
taxation imposed by the United States of America or any Governmental Authority
of the jurisdiction under the laws of which such Lender is organized, on the
overall net income of any Lender or applicable Lending Installation), or
changes the basis of taxation of payments to any Lender in respect of its
Loans, its L/C Interests, the Letters of Credit or other amounts due it
hereunder, provided however that this clause (i) shall not apply with respect
----------
to any Taxes to which Section 2.10(E) applies, or
----------------
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation with respect to its Eurodollar Loans, Korean
Eurodollar Loans, Korean Won Loans, L/C Interests or the Letters of Credit
(other than reserves and assessments taken into account in calculating the
Eurodollar Rate or Korean Eurodollar Rate), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding
or maintaining the Eurodollar Loans, Korean Eurodollar Loans, Korean Won
Loans, the L/C Interests or the Letters of Credit or reduces any amount
received by any Lender or any applicable Lending Installation in connection
with Eurodollar Loans, Korean Eurodollar Loans, Korean Won Loans or Letters of
Credit, or requires any Lender or any applicable Lending Installation to make
any payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit, by
an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender
of making, renewing or maintaining its Loans, L/C Interests or Letters of
Credit or to reduce any amount received under this Agreement, then, within 15
days after receipt by the Company of written demand by such Lender pursuant to
Section 3.5, the Company shall pay or cause the appropriate Subsidiary to pay
------------
such Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans, L/C Interests, Letters of Credit and its
Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender (each
-------------------------------------------
reference in this Section 3.2 to a Lender being in its capacity as a Lender or
-----------
an Issuing Lender, or all of the foregoing) determines (i) the amount of
capital required or expected to be maintained by such Lender, any Lending
Installation of such Lender or any corporation controlling such Lender is
increased as a result of a "Change" (as defined below), and (ii) such increase
in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation
to make Loans hereunder, then, within 15 days after receipt by the Company of
written demand by such Lender pursuant to Section 3.5, the Company shall pay
-----------
or cause the appropriate Subsidiary to pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans, its L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "CHANGE" means (i) any change after the
date of this Agreement in the "Risk-Based Capital Guidelines" (as defined
below) excluding, for the avoidance of doubt, the effect of any phasing in of
such Risk-Based Capital Guidelines or any other capital requirements passed
prior to the date hereof, or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after
the date of this Agreement and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by
any Lender or any Lending Installation or any corporation controlling any
Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If (i) any Lender determines
-----------------------------------
that maintenance of its Eurodollar Loans, Korean Eurodollar Loans or Korean
Won Loans at a suitable Lending Installation would violate any applicable law,
rule, regulation, policy, guideline, interpretation or directive, whether or
not having the force of law, or (ii) the Agent or the Required Lenders
determine that (x) deposits of a type, currency and maturity appropriate to
match fund Eurodollar Advances, Korean Eurodollar Advances or Korean Won
Advances are not available or (y) the interest rate applicable to a Eurodollar
Advance, Korean Eurodollar Advances or Korean Won Advance is unavailable or
does not accurately reflect the cost of making or maintaining such a
Eurodollar Advance, Korean Eurodollar Advances or Korean Won Advance, then the
Agent shall suspend the availability of Eurodollar Advances, Korean Eurodollar
Advances or Korean Won Advances and, in the case of any occurrence set forth
in clause (i), require any Eurodollar Advances, Korean Eurodollar Advances or
----------
Korean Won Advances to be repaid or, at the option of the Company, converted
to Base Rate Advances denominated in Dollars or repaid at the end of the
current Interest Period or at such other time, as may be required by the
applicable law, rule, regulation, policy, guideline, interpretation or
directive.
3.4 Funding Indemnification. If (i) any payment of a Eurodollar Advance
-----------------------
or Korean Eurodollar Advance or Korean Won Advance occurs on a date which is
not the last day of the applicable Interest Period, (ii) any Loan in any
currency is converted to a Loan in any other currency on a date which is not
the last day of the applicable Interest Period, whether because of
acceleration, prepayment, illegality or otherwise, or if a Eurodollar Advance,
a Korean Eurodollar Advance or Korean Won Advance is not made or continued or
prepaid on the date specified by the applicable Borrower for any reason other
than default by the Lenders, the applicable Borrower agrees to compensate and
indemnify each Lender, on demand, for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Advance, the Korean Eurodollar Advance or Korean Won Advance.
3.5 Lender Statements; Survival of Indemnity. If reasonably possible,
----------------------------------------
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans, Korean Eurodollar Loans or Korean Won Loans to reduce
any liability of the Borrowers to such Lender under Sections 3.1 and 3.2 or to
------------ ---
avoid the unavailability of a Type of Advance under Section 3.3, so long as
-----------
such designation is not disadvantageous to such Lender in its sole
determination. Each Lender requiring compensation pursuant to Section 2.10(E)
---------------
or to this Article III shall use its reasonable efforts to notify the Company
-----------
and the Agent in writing of any Change, law, policy, rule, guideline or
directive giving rise to such demand for compensation not later than sixty
(60) days following the date upon which the responsible account officer of
such Lender knows or should have known of such Change, law, policy, rule,
guideline or directive; provided, that failure to give such notice shall not
--------
affect any obligations of the Borrowers hereunder with respect thereto;
provided, further that for each such Change, law policy, rule, guideline or
-- -------
directive giving rise to such demand, such reimbursement obligations shall be
limited to an amount equal to costs incurred sixty (60) days prior to such
notice and thereafter. Any demand for compensation pursuant to this Article
-------
III shall be in writing and shall state the amount due, if any, under Section
-- -------
3.1, 3.2 or 3.4 and shall set forth in reasonable detail the calculations upon
--- --- ---
which such Lender determined such amount. Such written demand shall be
rebuttably presumed correct for all purposes. Determination of amounts
payable under such Sections in connection with a Eurodollar Loan, Korean
Eurodollar Loan or Korean Won Loan shall be calculated as though each Lender
funded its Eurodollar Loan, Korean Eurodollar Loan or Korean Won Loan, as
applicable through the purchase of a deposit of the type, currency and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate, Korean Eurodollar Rate or Korean CD Rate, as applicable to
such Loan, whether in fact that is the case or not. The obligations of the
Borrowers under Sections 3.1, 3.2 and 3.4 shall survive payment of the
------------- --- ---
Obligations and termination of this Agreement.
ARTICLE IV: CONDITIONS PRECEDENT
-------------------------------------
4.1 Initial Advances and Letters of Credit. The Lenders shall not be
---------------------------------------
required to make the initial Loans or issue any Letters of Credit unless (i)
such initial Loans are made not later than May 29, 1998 and (ii) the Company's
Subsidiaries shall be capitalized (with contributions to capital, or, in the
Company's discretion, loans) as described in the Consolidating Financial
Forecasts for Subsidiaries dated February 25, 1998 and delivered to the Agent
on February 26, 1998 and (iii) the Borrowers and Subsidiary Obligors have
furnished to the Agent, with sufficient copies for the Lenders, all of the
documents reflected on the List of Closing Documents attached as Exhibit E to
---------
this Agreement; it being understood and agreed that the Agent will notify the
Company in writing promptly when all of the conditions precedent have been
satisfied, provided, that it is further understood and agreed that if all of
--------
the conditions precedent described in clauses (i), (ii) and (iii) above shall
----------- ---- -----
not have been satisfied on or before May 29, 1998, the Aggregate Commitment
hereunder shall be terminated as of such date (unless otherwise agreed by the
Company and all of the Lenders) and all fees otherwise payable hereunder shall
cease to accrue.
4.2 Each Advance and Letter of Credit. Except as expressly provided in
---------------------------------
Sections 2.17 with respect to the purchase of participations in Letters of
--------------
Credit, the Lenders shall not be required to make any Advance and the Issuing
---
Lender shall not be required to issue any Letter of Credit, unless on the
applicable Borrowing Date, or in the case of a Letter of Credit, the date on
which the Letter of Credit is to be issued:
(i) The "Revolving Credit Obligations" owed by any Borrower or
Subsidiary Obligor under and as defined in the Long Term Credit Agreement
shall be equal to the amounts set forth in either of (A) the second proviso of
the first sentence of Section 2.1 of the Long Term Credit Agreement or (B) the
first proviso of the first sentence of Section 2.16 of the Long Term Credit
Agreement, as applicable, or, with respect to Advances and Letters of Credit
denominated in Korean Won, the Dollar Amount of "Revolving Credit Obligations"
denominated in Korean Won under and as defined in the Long Term Credit
Agreement is equal to the "Maximum Korean Won Commitment" under and as defined
in the Long Term Credit Agreement;
(ii) There exists no Default or Unmatured Default; and
(iii) The representations and warranties contained in Article V are true
---------
and correct in all material respects as of such Borrowing Date, except for
representations and warranties made with reference to a specific date which
representations and warranties shall be true and correct in all material
respects as of such date.
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower requesting such Advance that the
conditions contained in Sections 4.2(i), (ii) and (iii) will have been
---------------- ---- -----
satisfied as of the date of such Advance or the issuance of such Letter of
Credit. Any Lender may require a duly completed officer's certificate in
substantially the form of Exhibit F hereto and/or a duly completed compliance
---------
certificate in substantially the form of Exhibit C hereto as a condition to
---------
making an Advance.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
-----------------------------------------------
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and the other financial accommodations to the
Borrowers and in order to induce the Issuing Lender to issue the Letters of
Credit for the account of the Borrowers and Subsidiary Obligors, each of the
Borrowers and the Subsidiary Obligors represents and warrants as follows to
each Lender and each Agent as of the date of this Agreement and thereafter on
each date as required by Section 4.2:
------------
5.1 Organization; Powers. Each of the Borrowers and Subsidiary Obligors
--------------------
(i) is a duly organized corporation validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
to do business as a foreign company or corporation and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing could have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement.
5.2 Authority.
---------
(A) Each of the Borrowers and each of the Subsidiary Obligors has the
requisite power and authority (i) to execute, deliver and perform each of the
Loan Documents which have been executed by it as required by this Agreement
and (ii) to file the Loan Documents which must be filed by it with any
Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Loan Documents which must be executed or filed by any of the
Borrowers or any Subsidiary Obligor which have been executed or filed as
required by this Agreement and to which any of the Borrowers or any Subsidiary
Obligor is party, and the consummation of the transactions contemplated
thereby, have been duly approved, to the extent required, by the respective
boards of managers or directors, as applicable, and, if necessary, the members
or shareholders or workers' councils of the applicable Borrower or Subsidiary
Obligor, as applicable, and such approvals have not been rescinded. No other
action or proceedings on the part of any Borrower or any Subsidiary Obligor or
other Person are necessary to consummate such transactions.
(C) Each of the Loan Documents to which any of the Borrowers or any
Subsidiary Obligor is a party has been duly executed, delivered or filed, as
the case may be, by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally), is in full force
and effect and no material term or condition thereof has been amended,
modified or waived from the terms and conditions contained in the Loan
Documents delivered to the Agent pursuant to Section 4.1 without the prior
-----------
written consent of the Required Lenders, and each of the Borrowers or each
Subsidiary Obligor has, and, to the best of such Borrower's or Subsidiary
Obligor's Knowledge, all other parties thereto have performed and complied
with all the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such parties, and no
unmatured default, default or breach of any covenant by any such party exists
thereunder.
5.3 No Conflict; Governmental Consents. The execution, delivery and
------------------------------------
performance of each of the Loan Documents to which any of the Borrowers or any
Subsidiary Obligor is a party do not and will not (i) conflict with the
documents of organization or governance of such Borrower or Subsidiary
Obligor, (ii) constitute tortious interference with any Contractual Obligation
of any Person or conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of
Law (including, without limitation, any Environmental Property Transfer Act)
or Contractual Obligation of any Borrower or any Subsidiary Obligor, or
require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect or to subject the
Agent, the Arranger, any of the Lenders or any Issuing Lender to any
liability, (iii) with respect to the Loan Documents, result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of any Borrower or any Subsidiary Obligor, other than Liens permitted
by the Loan Documents, or (iv) require any approval of the Borrower's or any
Subsidiary Obligor's members, shareholders, workers' council or other similar
constituent group except such as have been obtained. The execution, delivery
and performance of each of the Loan Documents to which any Borrower or any
Subsidiary Obligor is a party do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer
Act, except (i) filings, consents or notices which have been or, in the case
of any of the foregoing, not required prior to the Closing Date, will be made,
obtained or given, and (ii) filings, registrations and deliveries necessary to
create or perfect security interests in the Collateral.
5.4 Financial Statements. The historical and forecasted financial
---------------------
statements, including, without limitation, the Consolidating Financial
Forecasts for Subsidiaries dated February 25, 1998 and delivered to the Agent
on February 26, 1998 (the "Statements") of the Company and its Subsidiaries,
copies of which are attached hereto as Exhibit G, (i) with respect to the
---------
historical Statements, (a) were prepared in accordance with generally accepted
accounting principles consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, (b) fairly present on a
pro forma basis the consolidated financial position of the Company and its
Subsidiaries as of the date thereof and consolidated results of operations for
the period covered thereby; and (c) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and material Contingent Obligations; and (ii) with respect to the
forecasted Statements, the projections and assumptions expressed therein were
prepared in good faith and represent management's opinion based on the
information available to the Company at the time so furnished.
5.5 No Material Adverse Change. (a) Since November 30, 1997 up to the
--------------------------
Closing Date, except as disclosed in the Company's Form 10 filed on March 19,
1998 with the Commission (a copy of which has been delivered to the Agent),
there has occurred no change in the business, properties, condition (financial
or otherwise), results of operations or prospects of the Company and its
Subsidiaries taken as a whole or any other event which has had or is
reasonably likely to have a Material Adverse Effect.
(b) Since the Closing Date, there has occurred no change in the
business, properties, condition (financial or otherwise), results of
operations or prospects of the Company and its Subsidiaries taken as a whole
or any other event which has had or is reasonably likely to have a Material
Adverse Effect.
5.6 Taxes.
-----
(A) Tax Examinations. All deficiencies which have been asserted against
----------------
the Company or any of the Company's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally
settled or are being contested in good faith, and as of the Closing Date no
issue has been raised by any taxing authority in any such examination which,
by application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Company's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 6.2(D) and except as
--------------
reserved for in the Company's consolidated financial statements to the extent,
if any, required by Agreement Accounting Principles, neither the Company nor
any of the Company's Subsidiaries anticipates any material tax liability with
respect to the years which have not been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of each of the
------------------
Company and its Subsidiaries required to be filed have been timely filed, and
all taxes, assessments, fees and other governmental charges thereupon and upon
their respective property, assets, income and franchises which are shown in
such returns or reports to be due and payable have been paid except those
items which are being contested in good faith and have been reserved for in
accordance with Agreement Accounting Principles. The Company has no Knowledge
of any proposed tax assessment against the Company, or any of the Company's
other Subsidiaries that will have or is reasonably likely to have a Material
Adverse Effect.
5.7 Litigation; Loss Contingencies and Violations. Except for Permitted
---------------------------------------------
Existing Contingent Obligations and as set forth in Schedule 5.7 to this
------------
Agreement, there is no action, suit, proceeding or investigation of which the
Company has Knowledge or arbitration before or by any Governmental Authority
or private arbitrator pending or, to the Knowledge of the Company or any of
its Subsidiaries, threatened against the Company or any of its Subsidiaries or
any property of any of them (i) challenging the validity or the enforceability
of any material provision of the Loan Documents or (ii) which will have or is
reasonably likely to have a Material Adverse Effect. There is no material
loss contingency within the meaning of Agreement Accounting Principles which
has not been reflected in the consolidated financial statements of the Company
prepared and delivered pursuant to Section 6.1(A) for the fiscal period during
--------------
which such material loss contingency was incurred. Neither the Company nor
any of its Subsidiaries is (A) in violation of any applicable Requirements of
Law which violation will have or is reasonably likely to have a Material
Adverse Effect, or (B) subject to or in default with respect to any final
judgment, writ, injunction, restraining order or order of any nature, decree,
rule or regulation of any court or Governmental Authority which will have or
is reasonably likely to have a Material Adverse Effect.
5.8 Subsidiaries; Capital Stock. Schedule 5.8 to this Agreement (i)
----------------------------- ------------
contains a description as of the Closing Date of the corporate structure of
the Company, the Company's Subsidiaries and any other Person in which the
Company or any of its Subsidiaries holds an equity interest; and (ii)
accurately sets forth (A) the correct legal name, the jurisdiction of
organization or incorporation and the jurisdictions in which each Borrower and
the direct and indirect Subsidiaries of the Company is qualified to transact
business as a foreign company or corporation, (B) the authorized, issued and
outstanding shares of each class of Capital Stock of each entity referred to
above that is a corporation and the owners of such shares (both as of the
Closing Date and on a fully-diluted basis), and (C) a summary of the direct
and indirect ownership, membership, partnership, joint venture, or other
equity interests, if any, of the Company and each Subsidiary of the Company in
any Person that is not a corporation. Except as disclosed on Schedule 5.8,
------------
none of the issued and outstanding Capital Stock of the Company or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement,
and there are no warrants or options outstanding with respect to such Capital
Stock. As of the Closing Date, the outstanding Capital Stock of the Company
and each of its Subsidiaries will be duly authorized, validly issued, fully
paid and nonassessable and, with the exception of the Company, will not be
Margin Stock.
5.9 ERISA. No Benefit Plan has incurred any accumulated funding
-----
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Company nor any member of the Controlled
Group has incurred any liability to the PBGC which remains outstanding other
than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report
filed with the IRS with respect to each Benefit Plan and furnished to the
lenders is complete and accurate. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the
Company nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan. Neither the Company nor any member of the Controlled
Group has failed to make a required installment or any other required payment
under Section 412 of the Code on or before the due date for such installment
or other payment. Neither the Company nor any member of the Controlled Group
is required to provide security to a Benefit Plan under Section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in current
liability for the plan year. Neither the Company nor any of its Subsidiaries
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be qualified under Section 401(a) of the Code
as currently in effect is so qualified, and each trust related to any such
Plan is exempt from federal income tax under Section 501(a) of the Code as
currently in effect. The Company and all Subsidiaries are in compliance in
all material respects with the responsibilities, obligations and duties
imposed on them by ERISA and the Code with respect to all Plans (other than
Foreign Employee Benefit Plans and Foreign Pension Plans). Neither the
Company nor any of its Subsidiaries nor any fiduciary of any Plan has engaged
in a nonexempt prohibited transaction described in Sections 406 of ERISA or
4975 of the Code which could reasonably be expected to subject the Company to
liability individually or in the aggregate in excess of $2,500,000. Neither
the Company nor any member of the Controlled Group has taken or failed to take
any action which would constitute or result in a Termination Event, which
action or inaction could reasonably be expected to subject the Company nor any
of its Subsidiaries to liability in excess of $2,500,000. Neither the Company
nor any Subsidiary is subject to any liability under Sections 4063, 4064,
4069, 4204 or 4212(c) of ERISA and no other member of the Controlled Group is
subject to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA which could reasonably be expected to subject the Company to or any of
its Subsidiaries liability individually or in the aggregate in excess of
$2,500,000. Neither the Company nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to
any employee pursuant to any Plan or existing contract or arrangement.
5.10 Accuracy of Information. Each of (i) the Company's Form 10 filed
-----------------------
on March 19, 1998 with the Commission (a copy of which has been delivered to
the Agent), as of the date of filing of such Form 10, (ii) any registration
statement or report on Form 10-K, 10-Q and 8-K (or their equivalents) which
the Company shall have filed with the Commission as at the time of filing of
such registration or report, as applicable, and (iii) all written reports,
certificates and documents of the Company furnished by or on behalf of the
Company and any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents,
including, without limitation, the Confidential Information Memorandum
reviewed by the Company (provided that except as set forth in Section 5.4, no
-----------
representation or warranty is made with respect to the forward looking
information contained therein), in each case, as of the date furnished, do not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.
5.11 Securities Activities. Neither the Company nor any of its
----------------------
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
5.12 Material Agreements. Neither the Company nor any Subsidiary is a
-------------------
party to any agreement or instrument or subject to any charter or other
contractual or corporate restriction which will have or is reasonably likely
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received notice or has Knowledge that (i) it is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, or (ii) any condition exists which, with the giving of notice or the lapse
of time or both, would constitute a default with respect to any such
Contractual Obligation, in each case, except where such default or defaults,
if any, will not have or are not reasonably likely to have a Material Adverse
Effect.
5.13 Compliance with Laws. The Company and its Subsidiaries are in
----------------------
compliance with all Requirements of Law applicable to them and their
respective businesses, in each case where the failure to so comply
individually or in the aggregate will have or is reasonably likely to have a
Material Adverse Effect.
5.14 Assets and Properties. The Company and each of its Subsidiaries
----------------------
has good and marketable title to all of its assets and properties (tangible
and intangible, real or personal) owned by it or a valid leasehold interest in
all of its leased assets (except insofar as marketability may be limited by
any laws or regulations of any Governmental Authority affecting such assets),
and all such assets and property are free and clear of all Liens, except Liens
securing the Obligations and Liens permitted under Section 6.3(C).
---------------
Substantially all of the assets and properties owned by, leased to or used by
the Company and/or each such Subsidiary of the Company are in adequate
operating condition and repair, ordinary wear and tear excepted. Except for
Liens granted to the Agent for the benefit of the Agent and the Holders of
Secured Obligations, neither this Agreement nor any other Loan Document, nor
any transaction contemplated under any such agreement, will affect any right,
title or interest of the Company or such Subsidiary in and to any of such
assets in a manner that will have or is reasonably likely to have a Material
Adverse Effect.
5.15 Statutory Indebtedness Restrictions. Neither the Company, nor any
-----------------------------------
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or
the Investment Company Act of 1940, or any other federal, state, local or
foreign statute or regulation which limits its ability to consummate the
transactions contemplated hereby.
5.16 Post-Retirement Benefits. As of the Closing Date, the Company and
------------------------
its Subsidiaries have no expected cost of post-retirement medical and
insurance benefits payable by the Company or its Subsidiaries to its employees
and former employees, as estimated by the Company in accordance with Financial
Accounting Standards Board Statement No. 106.
5.17 Insurance. Schedule 5.17 to this Agreement accurately sets forth
--------- -------------
as of the Closing Date all insurance policies and programs currently in effect
with respect to the respective properties and assets and business of the
Company and its Subsidiaries, specifying for each such policy and program, (i)
the amount thereof, (ii) the risks insured against thereby, (iii) the name of
the insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the
annual premium with respect thereto and (vii) describes any reserves, relating
to any self-insurance program that is in effect. Such insurance policies and
programs reflect coverage that is reasonably consistent with prudent industry
practice.
5.18 Contingent Obligations. Except for Permitted Existing Contingent
----------------------
Obligations, neither the Company nor any of its Subsidiaries has any
Contingent Obligation, contingent liability, long-term lease, or synthetic
lease, not reflected in the financial statements attached hereto as Exhibit G
---------
or otherwise disclosed to the Agent and the Lenders in the other Schedules to
this Agreement, which could reasonably be expected to subject the Company nor
any of its Subsidiaries to liability individually or in the aggregate in
excess of (a) $2,500,000 with respect to payments for Contingent Purchase
Price Obligations, (b) $30,000,000 with respect to guarantees issued for the
benefit of third-parties as support for loans and advances made by such
third-parties to Subsidiaries (other than Subsidiary Borrowers and Subsidiary
Obligors) of the Company or (c) $2,500,000 for other amounts.
5.19 Restricted Junior Payments. Neither the Company nor any of its
----------------------------
Subsidiaries has directly or indirectly declared, ordered, paid or made or set
apart any sum or properties for any Restricted Junior Payment or agreed to do
so, except to the extent permitted pursuant to Section 6.3(F) of this
---------------
Agreement.
5.20 Labor Matters.
--------------
(A) There are on the Closing Date no material collective bargaining
agreements, other labor agreements or Multiemployer Plans covering any of the
employees of the Company or any of its Subsidiaries. As of the Closing Date,
no material labor disputes, strikes or walkouts affecting the operations of
the Company or any of its Subsidiaries, is pending, or, to the Company's
Knowledge, threatened, planned or contemplated.
(B) Set forth in Schedule 5.20 to this Agreement is a list, as of the
-------------
Closing Date, of all material consulting agreements, executive compensation
plans, deferred compensation agreements, employee pension plans or retirement
plans, employee profit sharing plans, employee stock purchase and stock option
plans, severance plans, group life insurance, hospitalization insurance or
other plans or arrangements of the Company and its Subsidiaries providing for
benefits for employees of the Company or its Subsidiaries.
5.21 Environmental Matters. (a) Except as disclosed on Schedule 5.21:
--------------------- -------------
(i) the operations of the Company and its Subsidiaries comply in all
material respects with all applicable Environmental, Health or Safety
Requirements of Law;
(ii) the Company and its Subsidiaries have all material permits,
licenses or other authorizations required under all applicable Environmental,
Health or Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Company, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the Company's
or any of its Subsidiaries' Knowledge, any of their respective past property
or operations, are subject to or are the subject of, any investigation known
to the Company or any of its Subsidiaries, any judicial or administrative
proceeding, order, judgment, decree, settlement or other agreement respecting:
(A) any material violation of Environmental, Health or Safety Requirements of
Law; (B) any material remedial action; or (C) any material claims or
liabilities arising from the Release or threatened Release of a Contaminant
into the environment;
(iv) there is not now, nor to the best of the Company's or any of its
Subsidiaries' Knowledge has there ever been on or in the property of the
Company or any of its Subsidiaries any material landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface impoundment or
hazardous waste storage facility of any kind, polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or
asbestos-containing material; and
(v) neither the Company nor any of its Subsidiaries has any material
Contingent Obligation or material contingent liability in connection with any
Release or threatened Release of a Contaminant into the environment.
(b) For purposes of this Section 5.21 "material" means any noncompliance
------------
or basis for liability which could reasonably be likely to subject the Company
to liability individually in excess of $2,500,000 or in the aggregate in
excess of $5,000,000.
5.22 Foreign Employee Benefit Matters. (a) Each Foreign Employee
-----------------------------------
Benefit Plan is in compliance in all respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such Plan, except for any non-compliance the consequences of
which, in the aggregate, would not result in a material obligation to pay
money; (b) the aggregate of the accumulated benefit obligations under all
Foreign Pension Plans does not exceed to any material extent the current fair
market value of the assets held in the trusts or similar funding vehicles for
such Plans or reasonable reserves have been established in accordance with
prudent business practices or as required by Agreement Accounting Principles
with respect to any shortfall; (c) with respect to any Foreign Employee
Benefit Plan maintained or contributed to by the Company or any Subsidiary or
any member of its Controlled Group (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained; and (d) there are no actions,
suits or claims (other than routine claims for benefits) pending or, to the
Knowledge of the Company and its Subsidiaries, threatened against the Company
or any Subsidiary of it or any ERISA Affiliate with respect to any Foreign
Employee Benefit Plan, except to the extent the consequences of which, in the
aggregate, would not result in a material obligation to pay money.
ARTICLE VI: COVENANTS
-------------------------
Each of the Borrowers covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than contingent indemnity and reimbursement obligations),
unless the Required Lenders shall otherwise give prior written consent:
6.1 Reporting. The Borrowers shall:
---------
(A) Financial Reporting. Furnish to the Agent (which will promptly
--------------------
furnish copies of the following to the Lenders):
(i) Quarterly Reports. As soon as practicable, and in any event within
-----------------
forty-five (45) days after the end of the first three fiscal quarters in each
fiscal year beginning with the fiscal quarter ending February 28, 1998, the
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such period, the related consolidated and
consolidating statements of income and the related consolidated statement of
stockholders' equity and cash flow of the Company and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, certified by the chief
financial officer of the Company on behalf of the Company as fairly presenting
in all material respects the consolidated and, as applicable, consolidating
financial position of the Company and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in accordance with Agreement Accounting Principles, subject to
normal year end adjustments.
(ii) Annual Reports. As soon as practicable, and in any event within
---------------
ninety (90) days after the end of each fiscal year, (a) the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as at the end
of such fiscal year and the related consolidated and consolidating statements
of income and the related consolidated statement of stockholders' equity and
cash flow of the Company and its Subsidiaries for such fiscal year, and, in
comparative form the corresponding figures for the previous fiscal year, (b) a
schedule from the Company setting forth for each item in clause (a) hereof,
----------
the corresponding figures from the xxxxxxx-dated financial budget for the
current fiscal year delivered pursuant to Section 6.1(A)(iv), and (c) an audit
------------------
report on the items (other than the consolidating financial statements) listed
in clause (a) hereof of independent certified public accountants of recognized
----------
national standing, which audit report shall be unqualified and shall state
that such financial statements fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with Agreement Accounting Principles and that
the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards. The deliveries made pursuant to this clause (ii) shall be
-----------
accompanied by a certificate of such accountants that, in the course of their
examination necessary for their certification of the foregoing (such
examination utilizing only their customary audit procedures without any
necessity of conducting extra procedures for purposes of this certificates),
they have obtained no knowledge of such Default or Unmatured Default under
Section 6.4, or if, in the opinion of such accountants, any Default or
---------
Unmatured Default shall exist, stating the nature and status thereof. Such
----
deliveries shall also, not later than one hundred twenty days after the end of
such fiscal year, be accompanied by the management recommendation letter from
such accountants delivered in connection with such financial statements (x)
confirming that although no separate internal controls audit was conducted, in
the process of their regular audit, the internal systems and controls were
reviewed on a limited basis, and (y) listing any recommendations made to the
Company with respect to its internal systems and controls. If the Required
Lenders are not satisfied with the management recommendation letter's
treatment of the Company's internal systems and controls, they shall have the
right to require the Company to direct independent certified public
accountants of recognized national standing to prepare an audit report on the
internal systems and controls of the Company and its Subsidiaries.
(iii) Officer's Certificate. Together with each delivery of any
----------------------
financial statement pursuant to clauses (i) and (ii) of this Section 6.1(A),
----------- ---- --------------
(a) an Officer's Certificate of the Company, substantially in the form of
Exhibit F attached hereto and made a part hereof, stating that no Default or
------
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof and (b) a Compliance Certificate,
substantially in the form of Exhibit C attached hereto and made a part hereof,
---------
signed by the Company's chief financial officer, setting forth the Company's
calculations for the period then ended for Section 2.2(B) and for Section
-------------- -------
2.4(b) and which demonstrate compliance, when applicable, with the provisions
--
of Section 6.4, and which calculate the EBITDA Contribution Ratio for purposes
-----------
of determining the Applicable Eurodollar Margins, the Applicable Base Rate
Margins, the Applicable Letter of Credit Fee, and the Applicable Facility Fee.
(iv) Budgets. As soon as practicable and in any event not later than
-------
thirty (30) days following the beginning of each fiscal year beginning with
the fiscal year beginning September 1, 1998, a copy of the budget (including a
budgeted balance sheet and income statement) of the Company for the upcoming
fiscal year prepared in such detail as shall be reasonably satisfactory to the
Agent.
(B) Notice of Default. Promptly upon any of the chief executive
-------------------
officer, chief operating officer, or chief financial officer of the Company
obtaining Knowledge (i) of any condition or event which constitutes a Default
or Unmatured Default, or becoming aware that any Lender or Agent has given any
written notice with respect to a claimed Default or Unmatured Default under
this Agreement, or (ii) that any Person has given any written notice to the
Company or any Subsidiary of the Company or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 7.1(e), deliver to the Agent and the Lenders an Officer's Certificate
---------------
specifying (a) the nature and period of existence of any such claimed default,
Default, Unmatured Default, condition or event, (b) the notice given or action
taken by such Person in connection therewith, and (c) what action the Company
has taken, is taking and proposes to take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Company obtaining Knowledge of the
--------
institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries not previously disclosed pursuant to Section 5.7, which action,
-----------
suit, proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances
which expose, in the Company's reasonable judgment, the Company or any of its
Subsidiaries to liability in an amount aggregating $2,500,000 or more, give
written notice thereof to the Agent and the Lenders and provide such other
information as may be reasonably available to enable each Lender and the Agent
and its counsel to evaluate such matters; and (ii) in addition to the
requirements set forth in clause (i) of this Section 6.1(C), upon request of
---------- --------------
the Agent or the Required Lenders, promptly give written notice of the status
of any action, suit, proceeding, governmental investigation or arbitration
disclosed on Schedule 5.7 or covered by a report delivered pursuant to clause
------------ ------
(i) above and provide such other information as may be reasonably available to
---
it that would not result in loss of any attorney-client privilege by
disclosure to the Lenders to enable each Lender and the Agent and its counsel
to evaluate such matters.
(D) Insurance. As soon as practicable and in any event within one
---------
hundred twenty (120) days of the end of each fiscal year commencing with the
fiscal year ending August 31, 1998 deliver to the Agent and the Lenders (i) a
report in form as attached as Schedule 5.17 or otherwise in form and substance
-------------
reasonably satisfactory to the Agent outlining all material insurance coverage
maintained as of the date of such report by the Company and its Subsidiaries
and the duration of such coverage and (ii) an insurance broker's statement
that all premiums with respect to such coverage have been paid when due.
(E) ERISA Notices. Deliver or cause to be delivered to the Agent and
--------------
the Lenders, at the Company's expense, the following information and notices
as soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Company obtains
Knowledge that a Termination Event has occurred which could reasonably be
expected to subject the Company to or any of its Subsidiaries liability
individually or in the aggregate in excess of $2,500,000, a written statement
of the chief financial officer of the Company describing such Termination
Event and the action, if any, which the Company has taken, is taking or
proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten
(10) Business Days after any member of the Controlled Group obtains Knowledge
that a Termination Event has occurred which could reasonably be expected to
subject the Company to or any of its Subsidiaries liability individually or in
the aggregate in excess of $2,500,000, a written statement of the chief
financial officer of the Company describing such Termination Event and the
action, if any, which the member of the Controlled Group has taken, is taking
or proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Company or any of its
Subsidiaries obtains Knowledge that a prohibited transaction (defined in
Sections 406 of ERISA and Section 4975 of the Code) has occurred, a statement
of the chief financial officer of the Company describing such transaction and
the action which the Company or such Subsidiary has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days after any material increase in the
benefits of any existing Plan or the establishment of any new Benefit Plan or
the commencement of, or obligation to commence, contributions to any Benefit
Plan or Multiemployer Plan to which the Company or any member of the
Controlled Group was not previously contributing, notification of such
increase, establishment, commencement or obligation to commence and the amount
of such contributions;
(iv) within ten (10) Business Days after the Company or any of its
Subsidiaries receives notice of any unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Code,
copies of each such letter;
(v) within thirty (30) Business Days after the establishment of any
Foreign Employee Benefit Plan or the commencement of, or obligation to
commence, contributions to any Foreign Employee Benefit Plan to which the
Company or any Subsidiary was not previously contributing which, in any case,
would materially increase the Company's employment costs, notification of such
establishment, commencement or obligation to commence and the amount of such
contributions;
(vi) within ten (10) Business Days after the filing thereof with the IRS, a
copy of each funding waiver request filed with respect to any Benefit Plan and
all communications received by the Company or a member of the Controlled Group
with respect to such request;
(vii) within ten (10) Business Days after receipt by the Company or any
member of the Controlled Group of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of
each such notice;
(viii) within ten (10) Business Days after receipt by the Company or any
member of the Controlled Group of a notice from a Multiemployer Plan regarding
the imposition of withdrawal liability, copies of each such notice;
(ix) within ten (10) Business Days after the Company or any member of
the Controlled Group fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before
the due date for such installment or payment, a notification of such failure;
and
(x) within ten (10) Business Days after the Company or any member of the
Controlled Group knows or has reason to know that (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
For purposes of this Section 6.1(E), the Company, any of its Subsidiaries and
--------------
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.
(F) Labor Matters. Notify the Agent and the Lenders in writing,
--------------
promptly upon the Company's or any of its Subsidiaries' learning thereof, of
(i) any labor dispute to which the Company or any of its Subsidiaries may
become a party, including, without limitation, any strikes, lockouts or other
disputes relating to such Persons' plants and other facilities and (ii) any
Worker Adjustment and Retraining Notification Act liability incurred with
respect to the closing of any plant or other facility of the Company or any of
its Subsidiaries where, in the case of (i) or (ii), such is reasonably likely
to have a Material Adverse Effect.
(G) Other Indebtedness. Deliver to the Agent and the Lenders (i) a copy
------------------
of each regular report, notice or communication regarding potential or actual
defaults (including any accompanying officers' certificate) delivered by or on
behalf of the Company or any of its Subsidiaries to the holders of
Indebtedness for money borrowed with respect to Indebtedness the outstanding
principal balance of which is at least $2,500,000 pursuant to the terms of the
agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered
to such holders, and (ii) a copy of each notice or other communication
received by the Company or any of its Subsidiaries from the holders of
Indebtedness for money borrowed with respect to Indebtedness the outstanding
principal balance of which is at least $2,500,000 pursuant to the terms of
such Indebtedness, such delivery to be made promptly after such notice or
other communication is received by the Company or the applicable Subsidiary.
(H) Other Reports. Deliver or cause to be delivered to the Agent and
--------------
the Lenders copies of all 10-Ks, 10-Qs and 8-Ks filed with the Commission by
the Company.
(I) Environmental Notices. Deliver to the Agent and the Lenders as soon as
---------------------
possible and in any event within ten (10) days after receipt by the Company or
any of its Subsidiaries, a copy of (i) any notice or claim to the effect that
the Company or any of its Subsidiaries is or may be liable to any Person as a
result of the Release by the Company, any of its Subsidiaries, or any other
Person of any Contaminant into the environment, and (ii) any notice alleging
any violation of any Environmental, Health or Safety Requirements of Law by
the Company or any of its Subsidiaries if, in either case, such notice or
claim relates to an event which could reasonably be expected to subject the
Company or any of its Subsidiaries to liability individually or in the
aggregate in excess of $2,500,000.
(J) Other Information. Within a reasonable period of time following
------------------
receipt of a request therefor from the Agent, prepare and deliver to the Agent
and the Lenders such other information with respect to the Company, any of its
Subsidiaries, or the Collateral, including, without limitation, schedules
identifying and describing the Collateral and any dispositions thereof, as
from time to time may be reasonably requested by the Agent or any Lender.
6.2 Affirmative Covenants.
----------------------
(A) Existence, Etc. Except as provided by Section 6.3(B)(iv) with
---------------- ------------------
respect to the sale, dissolution or liquidation of certain Subsidiaries of the
Company, the Company shall, and shall cause each of its Subsidiaries to, at
all times maintain its existence and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises
material to its businesses except that any Subsidiary of the Company may merge
with or liquidate into the Company or any other Subsidiary of the Company;
provided that the surviving entity expressly assumes any liabilities, if any,
-----
of either of such Subsidiaries with respect to the Obligations pursuant to an
assumption agreement reasonably satisfactory to the Agent; provided further
-------- -------
that the Consolidated Net Worth of the surviving corporation is not less than
the Consolidated Net Worth of the Subsidiary with any liability with respect
to the Obligations immediately prior to such merger; and provided further, if
-------- -------
the corporation being merged out of existence or liquidated is a party to a
Pledge Agreement the surviving entity shall execute and deliver such
documents, instruments, agreements and opinions in connection therewith as
shall be required by the Agent in connection with any such Pledge Agreement
(and all accrued interest in connection therewith) of such entity shall be
repaid in full as of the date of such liquidation or merger.
(B) Corporate Powers; Conduct of Business. Except as provided by
-----------------------------------------
Section 6.3(B)(iv) with respect to the sale, dissolution or liquidation of
-------------
certain Subsidiaries of the Company, the Company (x) shall, and shall cause
each of its Subsidiaries to qualify and remain qualified to do business in
each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or is reasonably
likely to have a Material Adverse Effect and (y) will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.
(C) Compliance with Laws, Etc. The Company shall, and shall cause its
--------------------------
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless failure to
comply or obtain is not reasonably anticipated to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Company shall
----------------------------------------------
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or
assets or in respect of any of its franchises, business, income or property
before any penalty or interest accrues thereon, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 6.3(C)) upon any of
--------------
the Company's or such Subsidiary's property or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided, however,
-------- -------
that no such taxes, assessments and governmental charges referred to in clause
------
(i) above or claims referred to in clause (ii) above (and interest, penalties
--- -----------
or fines relating thereto) need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefor.
The Company will not permit any of its Subsidiaries to file or consent to the
filing of any consolidated income tax return with any Person other than the
Company or any of its Subsidiaries.
(E) Insurance. The Company shall maintain for itself and its
---------
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full
force and effect the insurance policies and programs listed on Schedule 5.17
-------------
to this Agreement or substantially similar policies and programs or other
policies and programs as reflect coverage that is reasonably consistent with
prudent industry practice.
(F) Inspection of Property; Books and Records; Discussions. The Company
------------------------------------------------------
shall permit, and cause each of the Subsidiary Borrowers and Subsidiary
Obligors to permit, any authorized representative(s) designated by the Agent
(together with an authorized representative of any Lender that may request to
accompany such authorized representative of the Agent) to visit and inspect
any of the properties of the Company or any of the Subsidiary Borrowers and
Subsidiary Obligors, to examine, audit, check and make copies of their
respective financial and accounting records, books, journals, orders, receipts
and any non-privileged correspondence and other data relating to their
respective businesses or the transactions contemplated hereby (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested; provided, however, that the Borrowers' and
-------- -------
Subsidiary Obligors' obligation to reimburse the Agent for reasonable costs
and expenses incurred in connection with such inspections shall be limited to
no more than one (1) inspection during any twelve-month period if such
inspections are conducted at a time when no Default or Unmatured Default shall
have occurred and is continuing. So long as no Default or Unmatured Default
shall have occurred and is continuing, and to the extent reasonably
practicable, any such inspection with respect to a Borrower or Subsidiary
Obligor will be coordinated with an Authorized Officer of the Company. The
Company shall keep and maintain, and cause each of the Company's Subsidiaries
to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with Agreement Accounting Principles
shall be made of all dealings and transactions in relation to their respective
businesses and activities, including, without limitation, transactions and
other dealings with respect to the Collateral. If a Default has occurred and
is continuing, the Company, upon the Agent's request, shall turn over copies
of any such records to the Agent or its representatives.
(G) ERISA Compliance. The Company shall, and shall cause each of its
-----------------
domestic Subsidiaries to, establish, maintain and operate all Plans (other
than Foreign Employee Benefit Plans and Foreign Pension Plans) to comply in
all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Company shall cause all property used
-----------------------
or useful in the conduct of its business or the business of any Subsidiary to
be maintained and kept in adequate condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly conducted at all times; provided,
--------
however, that nothing in this Section 6.2(H) shall prevent the Company from
------ --------------
discontinuing the operation or maintenance of any of such property if such
-
discontinuance is, in the judgment of the Company, desirable in the conduct of
-
its business or the business of any Subsidiary and not disadvantageous in any
respect to the Agent or the Lenders.
(I) Environmental Compliance. The Company and its Subsidiaries shall
-------------------------
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Company and its Subsidiaries to liability, individually in excess of
$2,500,000, or in the aggregate in excess of $5,000,000.
(J) Use of Proceeds. The Borrower shall use the proceeds of the Loans
---------------
to pay transaction costs in connection with the transactions evidenced by the
Loan Documents, to refinance existing indebtedness of the Company and its
Subsidiaries and to provide funds for the working capital needs and other
general corporate purposes of the Borrowers and their Subsidiaries. The
Company will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Loans to purchase or carry any "Margin Stock" or to make any
Acquisition, other than any Permitted Acquisition pursuant to Section 6.3(G).
--------------
(K) Foreign Employee Benefit Compliance. The Company shall, and shall
-----------------------------------
cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain
and operate all Foreign Employee Benefit Plans to comply in all material
respects with all laws, regulations and rules applicable thereto and the
respective requirements of the governing documents for such Plans, except for
failures to comply which, in the aggregate, would not result in a material
obligation to pay money.
6.3 Negative Covenants.
-------------------
(A) Indebtedness. Neither the Company nor any of its Subsidiaries shall
------------
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(a) the Obligations;
(b) Permitted Existing Indebtedness, and any extension, renewal,
refunding or refinancing thereof, provided that any such extension, renewal,
--------
refunding or refinancing is in an aggregate principal amount not greater than
the principal amount of and interest, fees and expenses accrued on, such
Permitted Existing Indebtedness outstanding at the time thereof and is on
terms (including, without limitation, maturity, amortization, interest rate,
premiums, fees, covenants, subordination, events of default, and remedies) not
materially less favorable to the obligor or adverse to the Lenders than the
terms of such Permitted Existing Indebtedness;
(c) Indebtedness permitted pursuant to Section 6.3(H) arising from
--------------
intercompany loans from (1) the Company, or any other Subsidiary of the
Company to any Borrower, (2) any Subsidiary that is not a Borrower to any
other Subsidiary or (3) any Borrower to any Subsidiary of the Company which is
not a Borrower; provided, that all such Indebtedness is subordinated to the
--------
Obligations on terms provided in this Agreement;
(d) Indebtedness in respect of Hedging Agreements permitted under
Section 6.3(P);
---------
(e) Indebtedness permitted by Sections 6.4(B) and 6.4(E)(2);
---------------- ---------
(f) Indebtedness constituting Contingent Obligations permitted by
Section 6.3(E);
---------
(g) unsecured Indebtedness and other liabilities incurred in the
ordinary course of business and consistent with past practice, but not
incurred through the borrowing of money or the obtaining of credit (other than
customary trade terms).
(B) Sales of Assets. Neither the Company nor any of its Subsidiaries
----------------
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) sales of certain assets of Purina Colombiana S.A., Purina de
Venezuela, C.A., Purina de Guatemala, S.A., and Purina Peru S.A., in each case
as described in that certain Agreement and Plan of Reorganization, dated as of
April 1, 1998, by and among the Company, Xxxxxxx Purina Company, and Xxxxxxx
Purina International Holding Company, Inc., as in effect on the Closing Date
and without giving effect to any amendment or modification thereto;
(iii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than the Capital Stock of any Subsidiary
of the Company) if such transaction (a) is of assets no longer required in the
ordinary course of business, (b) is for not less than fair market value, and
(c) when combined with all such other sales, assignments, transfers,
conveyances or other dispositions (i) during any fiscal year represents the
disposition of not greater than ten percent (10%) of the Company's
Consolidated Net Worth calculated as of the date of such sale, assignment,
transfer, conveyance or other disposition and after giving effect to such
transaction; and
(iv) (x) disposition of assets, dissolution, liquidation or sales of
shares of Subsidiaries (other than stock or assets of Subsidiary Borrowers or
Subsidiary Obligors) resulting from a determination by the Company to
discontinue its operations in a particular jurisdiction and (y) with the prior
written consent of all of the Lenders, the dissolution, liquidation or sale of
shares of any Subsidiary Borrower or Subsidiary Obligor and only so long as
any such sale or other disposition is for all cash consideration.
(C) Liens. Neither the Company nor any of its Subsidiaries shall
-----
directly or indirectly create, incur, assume, permit or suffer to exist any
Lien on or with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) Liens securing financing under governmental or other special programs
which are more advantageous to the Company than the financing available under
this Agreement, to the extent such Liens are required in order to participate
in such programs, and any renewals or extensions of any such Liens;
(v) other Liens securing indebtedness not exceeding, in the aggregate, ten
percent (10%) of the Company's Consolidated Net Worth at the time of
incurrence thereof; and
(vi) pledges of assets of entities other than Borrowers and Subsidiary
Obligors to secure Indebtedness of Subsidiaries which are neither Borrowers
nor Subsidiary Obligors.
(D) Investments. Except for Permitted Existing Investments in an amount
-----------
not greater than the amount thereof on the Closing Date, neither the Company
nor any of its Subsidiaries shall directly or indirectly make or own any
Investment except:
(i) Investments constituting Permitted Acquisitions permitted by
Section 6.3(G);
-----------
(ii) Investments in Cash Equivalents;
(iii) Investments consisting of Indebtedness of employees to the
extent such Indebtedness does not exceed in the aggregate $1,000,000 in any
fiscal year;
(iv) Investments in a particular jurisdiction other than the United
States of locally generated funds;
(v) Investments in Affiliates permitted by Section 6.3(H);
---------------
(vi) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(vii) Investments consisting of deposit accounts maintained by the
Company and its Subsidiaries in connection with its cash management system in
the ordinary course of business and consistent with past practice;
(viii) Investments consisting of compensating balances maintained by
Purina Korea, Inc. in Korea as required by domestic financial institutions as
support for loans and advances made by such financial institutions to Purina
Korea, Inc.; provided, such amounts do not in the aggregate exceed $8,000,000
--------
at any time; and
(ix) Investments constituting Contingent Obligations permitted by
Section 6.3(E) or Restricted Junior Payments permitted by Section 6.3(F); and
------------ --------------
(x) Investments with any other Persons which do not exceed in the
aggregate ten percent (10%) of the Consolidated Net Worth of the Company
(calculated as of the date of each such Investment).
(E) Contingent Obligations. Neither the Company nor any of its
-----------------------
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, material contingent liability, long-term
lease, synthetic lease or Contractual Obligation, not reflected in the
financial statements attached hereto as Exhibit G, except: (i) as set forth on
---------
Schedule 1.1.1, (ii) recourse obligations issued for the benefit of
---------------
customers, employees, vendors or other trading partners in the ordinary course
---------
of its business, (iii) guarantees to officers of the Company and its
subsidiaries of obligations of such officers with respect to the business of
the Company and its subsidiaries, (iv) guarantees incurred in connection with
or resulting from Permitted Acquisitions or other Investments not otherwise
prohibited under this Agreement; provided, that to the extent specified in
--------
this Agreement, such guarantees referred to in this clause (iv) shall be
-----------
treated as Indebtedness for purposes of this Agreement, and (v) guarantees
issued by the Company for the benefit of third-parties as support for loans
and advances made by such third-parties to (x) Subsidiary Borrowers or
Subsidiary Obligors and (y) Subsidiaries of the Company (other than Subsidiary
Borrowers and Subsidiary Obligors) in an amount, contingent or otherwise, not
to exceed $30,000,000 at any time.
(F) Restricted Junior Payments. Neither the Company nor any of its
----------------------------
Subsidiaries shall declare or make any Restricted Junior Payment, except:
(i) dividends payable by the Company in compliance with the corporation
law of the State of Missouri; and
(ii) Restricted Junior Payments made by any Subsidiary of the Company to
the Company or any other Subsidiary of the Company except that no Subsidiary
shall make any Investment in (x) any Affiliate (other than the Company) if as
a result thereof such Investments would at any time exceed in the aggregate
forty percent (40%) of Consolidated Net Worth of the Company or (y) any
Affiliate (other than a Borrower or Subsidiary Obligor) if as a result thereof
such Investments would at any time exceed in the aggregate fifteen percent
(15%) of the Consolidated Net Worth of the Company;
provided, however, that the Restricted Junior Payments described in clause (i)
-------- ------- ----------
and clause (ii) shall not be permitted if either a Default or an Unmatured
------------
Default shall have occurred and be continuing at the date of declaration or
payment thereof or would result therefrom.
(G) Conduct of Business; Subsidiaries; Acquisitions. Neither the
---------------------------------------------------
Company nor any of its Subsidiaries shall engage in any business, or acquire
any other business, other than the businesses in, or reasonably related to,
the lines of business carried on by them on the date hereof. The Company
shall not and shall not permit any of its Subsidiaries to create, capitalize
or acquire any Subsidiary after the date hereof or enter into any transaction
or series of transactions in which it acquires all or any significant portion
of the assets of another Person, or such Person merges with or liquidates into
the Company or any of its Subsidiaries, unless (x) such transaction is in
connection with the Company's acquisition from Xxxxxxx Purina Company and/or
Xxxxxxx Purina International Holding Company of the Capital Stock of each of
the Company's Subsidiaries on or about the Closing Date or (y) such
transaction meets the following requirements (each such transaction
constituting a "PERMITTED ACQUISITION"):
(1) no Default or Unmatured Default shall have occurred and be
continuing or would result from such transaction or transactions or the
incurrence of any Indebtedness in connection therewith;
(2) to the extent any such transaction, together with all such other
transactions, exceeds in the aggregate $5,000,000 during any fiscal year,
prior to each such transaction, the Company shall deliver to the Agent and the
Lenders a certificate from one of the Company's Authorized Officers
demonstrating to the satisfaction of the Agent and the Required Lenders that
after giving effect to such transaction or transactions and the incurrence of
any Indebtedness permitted by Section 6.3(A) in connection therewith on a pro
--------------
forma basis as if such acquisition, merger or liquidation and such incurrence
of Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Company's most recently completed fiscal
quarter, the Company would have been in compliance with all provisions of
Section 6.4 at all times during such twelve-month period and not otherwise in
--------
Default;
(3) the transaction is consummated pursuant to a negotiated agreement on
a non-hostile basis and involves the purchase of, or entering into of, a
business line similar, or reasonably related, to that of the Company's and its
Subsidiaries as of the Closing Date;
(4) in the case of any merger permitted under this Agreement, the
surviving entity expressly assumes any liabilities, if any, either of the
Company or Subsidiary party thereto, as applicable, with respect to the
Obligations pursuant to an assumption agreement reasonably satisfactory to the
Agent; and
(5) the aggregate amount of Investments (including assumed liabilities)
in connection with all such transactions during the term of this Agreement
shall not exceed:
(A) for any single transaction or series of related transactions,
$20,000,000; and
(B) for all transactions, $80,000,000 (excluding Investments actually
made up to $4,000,000 in the aggregate in connection with the Company's
development of production facilities in Shanggao, China).
(H) Transactions with Shareholders and Affiliates. Except as set forth
---------------------------------------------
on Schedule 6.3(H), neither the Company nor any of its Subsidiaries shall
----------------
directly or indirectly (i) enter into or permit to exist any transaction
-
(including, without limitation, the purchase, sale, lease or exchange of any
-
property or the rendering of any service) with any holder or holders of any
Capital Stock or other Equity Interests in the Company, or with any Affiliate
of the Company, on terms that are less favorable to the Company or its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate; or (ii) enter into or permit to exist any such non-arm's length
transaction, including without limitation loans and advances to or other
Investments in (x) any Affiliate (other than the Company) if as a result
thereof such Investments would at any time exceed in the aggregate forty
percent (40%) of Consolidated Net Worth of the Company or (y) any Affiliate
(other than a Borrower or Subsidiary Obligor) if as a result thereof such
Investments would at any time exceed in the aggregate fifteen percent (15%) of
the Consolidated Net Worth of the Company.
(I) Sales and Leasebacks. Neither the Company nor any of its
----------------------
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an Operating Lease, a synthetic
lease or a Capitalized Lease, of any property (whether real or personal or
mixed) (i) which it or one of its Subsidiaries sold or transferred or is to
sell or transfer to any other Person, or (ii) which it or one of its
Subsidiaries intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by it or one of its
Subsidiaries to any other Person in connection with such lease, unless in
either case the sale involved is not prohibited under Section 6.3(B) and the
--------------
lease involved is not prohibited under Section 6.3(A).
---------------
(J) Margin Regulations. Neither the Borrower nor any of its
-------------------
Subsidiaries, shall use all or any portion of the proceeds of any credit
-
extended under this Agreement to purchase or carry Margin Stock.
(K) ERISA. The Company shall not (i) engage, or permit any of its
-----
Subsidiaries to engage, in any prohibited transaction described in Sections
406 of ERISA or 4975 of the Code for which a statutory or class exemption is
not available or a private exemption has not been previously obtained from the
DOL;
(ii) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to
any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to pay timely
required contributions or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate, any
Benefit Plan which would result in any liability of the Company or any
Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer Plan
which the Company or any Controlled Group member may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment; or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that the
Company or any Controlled group member is required to provide security to such
Plan under Section 401(a)(29) of the Code.
(L) Issuance of Equity Interests. Neither the Company nor any of its
-----------------------------
Subsidiaries shall issue any ownership, membership or other equity interests
after the date of this Agreement if such issuance causes a Change of Control
to occur.
(M) Organizational Documents. Neither the Company nor any of its
-------------------------
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective organizational documents as in effect on
the date hereof in any manner adverse to the interests of the Lenders without
the prior written consent of the Required Lenders.
(N) Other Indebtedness. Neither the Company nor any of its Subsidiaries
------------------
shall amend, supplement or otherwise modify the terms of any Indebtedness owed
by a Borrower or Subsidiary of the Company that would be materially adverse to
the Lenders, including, without limitation, with respect to subordination.
(O) Fiscal Year. The Company shall not change its fiscal year for
------------
accounting or tax purposes from a period consisting of the 12-month period
ending on August 31 of each calendar year.
(P) Hedging Obligations. The Company shall not and shall not permit any
-------------------
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements other than hedging
or other derivative transactions (i) relating to the acquisition of raw
materials or the sale of products of the Company which are intended to protect
the Company against the risks of changes in market prices or (ii) relating to
currencies in which the Company receives revenues or incurs expenses which are
intended to protect the Company against the risks of changes in the exchange
rates relating to such currencies or (iii) relating to the interest rates on
its outstanding or proposed Indebtedness which are intended to protect the
Company against the risks of changes in the interest rates relating to such
borrowing (such hedging agreements collectively are sometimes referred to
herein as "HEDGING AGREEMENTS"). In the event a Lender elects to enter into
any Hedging Agreements with the Company or any of its Subsidiaries, the
obligations of the Company or such Subsidiary with respect to such Hedging
Agreements shall be Secured Obligations secured by the Collateral.
(Q) Subsidiary Covenants. The Company will not, and will not permit any
--------------------
Subsidiary Borrower or Subsidiary Obligor to, create or otherwise cause to
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary Borrower or Subsidiary Obligor to (i) pay dividends
or make any other distribution on its stock, or make any other Restricted
Junior Payment, (ii) pay any Indebtedness or other Obligation owed to the
Company or any other Subsidiary, (iii) make loans or advances or other
Investments in the Company or any other Subsidiary, or (iv) sell, transfer or
otherwise convey any of its property to the Company or any other Subsidiary.
6.4 Financial Covenants. The Company shall comply with the following:
-------------------
(A) Interest Coverage Ratio. The Company shall maintain a ratio
-------------------------
("INTEREST COVERAGE RATIO") of (i) EBITDA to (ii) Cash Interest Expense of at
least 2.50 to 1.00 as of the end of each fiscal quarter commencing with the
fiscal quarter ending August 31, 1998 through the Termination Date.
In each case the Interest Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
----- -------
Interest Coverage Ratio shall be calculated using EBITDA and Cash Interest
Expense for the period commencing on April 1, 1998 through August 31, 1998,
(b) for the fiscal quarter ending November 30, 1998, the Interest Coverage
Ratio shall be calculated using EBITDA and Cash Interest Expense for the
period commencing on April 1, 1998 through November 30, 1998, and (c) for the
fiscal quarter ending February 28, 1999, the Interest Coverage Ratio shall be
calculated using EBITDA and Cash Interest Expense for the period commencing on
April 1, 1998 through February 28, 1999).
(B) Maximum Leverage Ratio. The Company shall not permit the ratio
------------------------
("LEVERAGE RATIO") of (i) Total Debt to (ii) EBITDA to be greater than 3.00 to
1.00 as of the end of each fiscal quarter commencing with the fiscal quarter
ending August 31, 1998 through the Termination Date.
The Leverage Ratio shall be calculated, in each case, as of the last day of
each fiscal quarter based upon (A) for purposes of calculating Total Debt,
Indebtedness as of the last day of each such fiscal quarter; and (B) for
EBITDA, the actual amount for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
---- -------
Leverage Ratio shall be calculated using EBITDA for such fiscal quarter
multiplied by four, (b) for the fiscal quarter ending November 30, 1998, the
Leverage Ratio shall be calculated using EBITDA for the two fiscal quarters
ending November 30, 1998 multiplied by two (2), and (c) for the fiscal quarter
ending February 28, 1999, the Leverage Ratio shall be calculated using EBITDA
for the three fiscal quarters ending February 28, 1999 multiplied by
four-thirds (4/3)).
(C) Capital Expenditures. The Company will not, nor will it permit any
--------------------
Subsidiary to, expend, or be committed to expend, for Capital Expenditures
during any one fiscal year in the aggregate for the Company and its
Subsidiaries in excess of (a) $81,250,000 for the fiscal year ending August
31, 1998, (b) $40,000,000 for the fiscal year ending August 31, 1999 plus any
amount permitted to be expended in the previous fiscal year but not expended
and (c) $28,750,000 in the aggregate for the fiscal years ending August 31,
2000 and August 31, 2001 plus any amount permitted to be expended in the
previous fiscal year (pursuant to the absolute dollar limitation for such
fiscal year and not pursuant to any carryover provision from a prior fiscal
year) but not expended.
(D) Minimum Consolidated Net Worth. The Company shall not permit its
-------------------------------
Consolidated Net Worth at any time to be less than the amount set forth below
during the period set forth opposite such amount:
Minimum Consolidated Net Worth Applicable Period
--------------------------------- ------------------
$230,000,000 April 1, 1998 through and including August 31,
1998
$240,000,000 September 1, 1998 through and including August
31, 1999
$250,000,000 At all times thereafter.
For purposes of determining Consolidated Net Worth of the Company and its
Subsidiaries as required by this Section 6.4(D) only, Consolidated Net Worth
--------------
of the Company and its Subsidiaries shall be calculated excluding (i) the
effect of translation account adjustments for the fiscal year ending on August
31, 1998 of up to $10,000,000 and (ii) the effect of further translation
account adjustments of up to an additional $20,000,000.
(E) Country Debt Limitations. Indebtedness (whether under this
--------------------------
Agreement or otherwise) incurred by the Subsidiaries in any particular country
shall be subject to each of the following limitations:
(1) The applicable Borrower or Subsidiary Obligor shall not have
Indebtedness under this Agreement outstanding at any time in excess of the
maximum Dollar Amount set forth below:
Borrower's or Subsidiary Obligor's
-------------------------------------
Jurisdiction of Incorporation Maximum Dollar Amount
------------------------------- ---------------------
Canada $6,500,000
------ ----------
United States $5,000,000
------------- ----------
Italy $4,000,000
----------
Spain $2,500,000
----------
Hungary $2,000,000
------- ----------
Korea $15,000,000
----- -----------
Mexico $5,000,000
------ ----------
Colombia $5,000,000
----------
Brazil $5,000,000
----------
Philippines $2,500,000
----------
Venezuela $2,500,000
--------- ----------
(2) The ratio of (i) Total Debt for each of the Subsidiary Borrowers and
Subsidiary Obligors (including Indebtedness owed to Affiliates but excluding
Contingent Obligations in the form of standby Letters of Credit issued under
this Agreement for the account of such Subsidiary Borrower or Subsidiary
Obligor for the benefit of domestic financial institutions as support for
loans and advances made by such financial institutions to the applicable
Subsidiary Borrower or Subsidiary Obligor to the extent any such loans or
advances are outstanding) to (ii) EBITDA for each of the Subsidiary Borrowers
and Subsidiary Obligors (other than Purina Korea, Inc.) shall not at any time
exceed 3.00 to 1.00. The ratio of (i) Total Debt (including Indebtedness owed
to Affiliates but excluding Contingent Obligations in the form of standby
Letters of Credit issued under this Agreement for the account of Purina Korea,
Inc. for the benefit of domestic financial institutions as support for loans
and advances made by such financial institutions to Purina Korea, Inc. to the
extent any such loans or advances are outstanding) to (ii) EBITDA for Purina
Korea, Inc. shall not at any time exceed 2.25 to 1.00.
The foregoing ratios shall be calculated, in each case, as of the last day of
each fiscal quarter based upon (A) for purposes of calculating Total Debt and
Indebtedness as of the last day of each such fiscal quarter, and (B) for
EBITDA, the actual amount for the four-quarter period ending on such day
(provided; however, (a) for the fiscal quarter ending August 31, 1998, the
---- -------
foregoing ratios shall be calculated using EBITDA for such fiscal quarter
multiplied by four, (b) for the fiscal quarter ending November 30, 1998, the
foregoing ratios shall be calculated using EBITDA for the two fiscal quarters
ending November 30, 1998 multiplied by two (2), and (c) for the fiscal quarter
ending February 28, 1999, the foregoing ratios shall be calculated using
EBITDA for the three fiscal quarters ending February 28, 1999 multiplied by
four-thirds (4/3)).
ARTICLE VII: DEFAULTS
-------------------------
7.1 Defaults. Each of the following occurrences shall constitute a
--------
Default under this Agreement:
(a) Failure to Make Payments When Due. Any Borrower or Subsidiary
-------------------------------------
Obligor shall (i) fail to pay when due any of the Obligations consisting of
principal with respect to the Loans or Letters of Credit or (ii) shall fail to
pay within three (3) days of the date when due any of the other Obligations
under this Agreement or the other Loan Documents.
(b) Breach of Certain Covenants. Any Borrower or Subsidiary Obligor
-----------------------------
shall fail duly and punctually to perform or observe any agreement, covenant
or obligation binding on such Borrower under (i) Sections 6.1 or Sections
------------ --------
6.2(A), (B), (D), (E), (G), or (H), and such failure shall continue unremedied
-- --- --- --- --- ---
for ten (10) Business Days after the earlier to occur of (x) notice from the
Agent or any Lender to the Company of such Default and (y) the Company or any
of its Subsidiaries knew or should have known of such Default exercising
reasonable diligence, or (ii) Sections 6.2(C), (F), (I), (J), or (K), Section
--------------- --- --- --- --- -------
6.3 or Section 6.4.
--- ------------
(c) Breach of Representation or Warranty. Any representation or
----------------------------------------
warranty made or deemed made by any Borrower or Subsidiary Obligor to the
Agent or any Lender herein or by the Company or any of its Subsidiaries in any
of the other Loan Documents or in any statement or certificate at any time
given by any such Person pursuant to any of the Loan Documents shall be false
or misleading in any material respect on the date as of which made (or deemed
made).
(d) Other Defaults. Any Borrower or Subsidiary Obligor shall default in
--------------
the performance of or compliance with any term contained in this Agreement
(other than as covered by paragraphs (a), (b) or (c) of this Section 7.1), or
-------------- --- --- -----------
the Company or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in any of the other Loan Documents, and
such default shall continue for thirty (30) days after the earlier to occur of
(i) notice from the Agent or any Lender to the Company of such Default and
(ii) the Company or any of its Subsidiaries knew or should have known of such
default exercising reasonable diligence.
(e) Default as to Other Indebtedness. Any of the Company or any of its
--------------------------------
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than the Obligations) the outstanding principal
amount of which Indebtedness is in excess of $5,000,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Company or any such Subsidiary offer to
purchase such Indebtedness or other required repurchase of such Indebtedness,
or permit the holder(s) of such Indebtedness to accelerate the maturity of any
such Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due
and payable (by acceleration or otherwise) or required to be prepaid, redeemed
or otherwise repurchased by the Company or any of its Subsidiaries (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
----------------------------------------------------------
(i) An involuntary case shall be commenced against the Company, or its
Subsidiaries with an aggregate net worth equal to or greater than ten percent
(10%) of the Company's Consolidated Net Worth, and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or such
Subsidiaries in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any other
similar relief shall be granted under any applicable federal, state, local or
foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company, or its
Subsidiaries with an aggregate net worth equal to or greater than ten percent
(10%) of the Company's Consolidated Net Worth, or over all or a substantial
part of the property of the Company, or such Subsidiaries shall be entered; or
an interim receiver, trustee or other custodian of the Company or such
Subsidiaries or of all or a substantial part of the property of the Company or
such Subsidiaries shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the property of the Company or
such Subsidiaries shall be issued and any such event shall not be stayed,
dismissed, bonded or discharged within sixty (60) days after entry,
appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Company or
---------------------------------------------------
its Subsidiaries with an aggregate net worth equal to or greater than ten
percent (10%) of the Company's Consolidated Net Worth, shall (i) commence a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to
a voluntary case, under any such law, (iii) commence a voluntary case seeking,
or consent to, the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property, (iv) make
any assignment for the benefit of creditors or fail generally to pay debts as
they become due or (v) take any corporate action to authorize any of the
foregoing.
(h) Judgments and Attachments. Any money judgment(s), writ or warrant
-------------------------
of attachment, or similar process against any of the Company or any of its
Subsidiaries or any of their respective assets involving in any single case or
in the aggregate an amount in excess of $5,000,000 is (are) entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty
(60) days or in any event later than fifteen (15) days prior to the date of
any proposed sale thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered against
-----------
the Company, or its Subsidiaries with an aggregate net worth equal to or
greater than ten percent (10%) of the Company's Consolidated Net Worth,
decreeing its involuntary dissolution or split up and such order shall remain
undischarged and unstayed for a period in excess of sixty (60) days; or the
Company or such Subsidiaries shall otherwise dissolve or cease to exist except
as specifically permitted by this Agreement unless the dissolving entity is a
limited liability company which elects to continue its existence.
(j) Loan Documents; Failure of Security. At any time, for any reason,
-----------------------------------
(i) any Loan Document as a whole that materially affects the ability of the
Agent, or any of the Lenders to enforce the Obligations or enforce their
rights against the Collateral, ceases to be in full force and effect or any of
the Company or any of its Subsidiaries party thereto seeks to repudiate its
obligations thereunder and the Liens intended to be created thereby are, or
any of the Company or any such Subsidiary seeks to render such Liens, invalid
and unperfected, or (ii) any action shall be taken to discontinue or to assert
the invalidity or unenforceability of any Loan Document, or (iii) Liens on
Collateral with a fair market value in excess of $2,500,000 in favor of the
Agent contemplated by the Loan Documents shall, at any time, for any reason,
be invalidated or otherwise cease to be in full force and effect, or such
Liens shall not have the priority contemplated by this Agreement or the Loan
Documents.
(k) Termination Event. Any Termination Event occurs which the Required
-----------------
Lenders believe is reasonably likely to subject the Company or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$2,500,000.
(l) Waiver of Minimum Funding Standard. If the plan administrator of
-----------------------------------
any Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is
based could reasonably be expected to subject either the Company or any
Controlled Group member to liability individually or in the aggregate in
excess of $2,500,000.
(m) Change of Control. A Change of Control shall occur.
-------------------
(n) Environmental Matters. The Company or any of its Subsidiaries shall
---------------------
be the subject of any proceeding or investigation pertaining to (i) the
Release by the Company or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of any of the Company or any of its
Subsidiaries arising from the Release by any other Person of any Contaminant
into the environment, or (iii) any violation of any Environmental, Health or
Safety Requirements of Law by the Company or any of its Subsidiaries, which,
in any case, has or is reasonably likely to subject the Company or any of its
Subsidiaries to liability individually in excess of $2,500,000 or in the
aggregate in excess of $5,000,000.
(o) Guarantor Revocation. Except as provided by Section 6.3(B)(iv) with
-------------------- ------------------
respect to the sale, dissolution or liquidation of certain Subsidiaries of the
Company, any guarantor of the Obligations shall terminate or revoke or refuse
to perform or assert invalidity of any of its payment obligations under the
applicable guarantee agreement or breach any of the other terms of such
guarantee agreement which breach remains unremedied for five (5) days.
A Default shall be deemed "continuing" until waived in writing in
accordance with Section 8.3.
------------
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
------------------------------------------------------------------------------
REMEDIES
--------
8.1 Remedies.
(a) Termination of Commitments; Acceleration. If any Default described
----------------------------------------
in Section 7.1(f) or 7.1(g) occurs with respect to any of the Borrowers, the
--------------- ------
obligations of the Lenders to make Loans hereunder and the obligation of the
Agent or any Issuing Lender to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, any Lender or
any Issuing Lender. If any other Default occurs, the Required Lenders may (i)
terminate or suspend the obligations of the Lenders to make Loans hereunder
and the obligation of the Issuing Lenders to issue Letters of Credit
hereunder, or (ii) declare the Obligations to be due and payable, or both, and
upon any declaration under clause (ii), the Obligations shall become
------------
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrowers expressly waive.
(b) Rescission. If at any time after termination of the Lenders'
----------
obligations to make Loans or acceleration of the maturity of the Loans,
Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Defaults and Unmatured Defaults (other than nonpayment of
principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be waived pursuant to Section 8.3, then upon the
-----------
written consent of the Required Lenders and written notice to Borrowers, the
termination of Lenders' respective obligations to make Loans and the
respective Lenders' and the Issuing Lenders' obligations to participate in or
issue Letters of Credit or the aforesaid acceleration and its consequences may
be rescinded and annulled; but such action shall not affect any subsequent
Default or Unmatured Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the
Lenders and the Issuing Lenders to a decision which may be made at the
election of the Required Lenders; they are not intended to benefit Borrowers
and do not give Borrowers the right to require the Lenders to rescind or annul
any termination of the aforesaid obligations of the Lenders or Issuing Lenders
or any acceleration hereunder, even if the conditions set forth herein are
met.
(c) Enforcement. The Borrowers acknowledge that in the event the
-----------
Borrowers fail to perform, observe or discharge any of their respective
obligations or liabilities under this Agreement or any other Loan Document,
any remedy of law may prove to be inadequate relief to the Agent, the Issuing
Lenders and the Lenders; therefore, Borrowers agree that the Agent, the
Issuing Lenders and the Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
8.2 Defaulting Lender. In the event that any Lender fails to fund its
-----------------
Revolving Credit Share of any Advance requested or deemed requested by any
Borrower which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to as
a "NON PRO RATA LOAN"), until the earlier of such Lender's cure of such
failure and the termination of the Commitments, the proceeds of all amounts
thereafter repaid to the Agent by the Borrowers and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrowers by the Agent ("CURE
LOANS") on behalf of such Lender to cure, in full or in part, such failure by
such Lender, but shall nevertheless be deemed to have been paid to such Lender
in satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(i) the foregoing provisions of this Section 8.2 shall apply only with
-----------
respect to the proceeds of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section 2.6;
------------
(ii) any such Lender shall be deemed to have cured its failure to fund
its Revolving Credit Share of any Advance at such time as an amount equal to
such Lender's original Revolving Credit Share of the requested principal
portion of such Advance is fully funded to the applicable Borrower, whether
made by such Lender itself or by operation of the terms of this Section 8.2,
-----------
and whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(iii) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the applicable Borrower as
to its desired application, all repayments of principal which, in accordance
with the other terms of this Agreement, would be applied to the outstanding
Base Rate Loans shall be applied first, ratably to all Base Rate Loans
-----
constituting Non Pro Rata Loans, second, ratably to Base Rate Loans other than
------
those constituting Non Pro Rata Loans or Cure Loans and, third, ratably to
-----
Base Rate Loans constituting Cure Loans;
(iv) for so long as and until the earlier of any such Lender's cure of
the failure to fund its Revolving Credit Share of any Advance and the
termination of the Commitments, the term "Required Lenders" for purposes of
this Agreement shall mean Lenders (excluding all Lenders whose failure to fund
their respective Revolving Credit Shares of such Advance have not been so
cured) whose Pro Rata Shares represent at least sixty-six and two-thirds
(66-2/3%) of the aggregate Pro Rata Shares of such Lenders; and
(v) for so long as and until any such Lender's failure to fund its
Revolving Credit Share of any Advance is cured in accordance with Section
-------
8.2(ii), (A) such Lender shall not be entitled to any facility fees with
---
respect to its Commitments and (B) such Lender shall not be entitled to any
-
letter of credit fees, which facility fees and letter of credit fees shall
accrue in favor of the performing Lenders, shall be allocated among such
performing Lenders ratably based upon their relative Commitments.
8.3 Amendments. Subject to the provisions of this Article VIII, the
---------- ------------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers and Subsidiary Obligors may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the
Borrowers or the Subsidiary Obligors hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall,
-------- -------
without the consent of each Lender affected thereby:
(i) Postpone or extend the Termination Date or any other date fixed for
any payment of principal of, or interest on, the Loans, the Reimbursement
Obligations or any fees or other amounts payable to such Lender (except with
respect to (a) any modifications of the provisions relating to prepayments of
Loans and other Obligations and (b) a waiver of the application of the default
rate of interest pursuant to Section 2.7 hereof and (c) as expressly provided
-----------
by the terms of Section 2.24).
-------------
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon.
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters.
(iv) Increase the amount of the Commitment of any Lender hereunder
(except with respect to an increase in any sublimits for any Types of Loans
within the Commitments).
(v) Permit any Borrower to assign its rights under this Agreement.
(vi) Amend Section 2.24 or this Section 8.3.
------------- ------------
(vii) Except as provided by Section 6.3(B)(iv) with respect to the sale,
------------------
dissolution or liquidation of certain Subsidiaries of the Company, release any
guarantor of all or any part of the Obligations or release all or
substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. No amendment of any
provision of this Agreement relating to any Issuing Lender shall be effective
without the written consent of the Agent and each of the Issuing Lenders. The
Agent may waive payment of the fee required under Section 12.3(B) without
---------------
obtaining the consent of any of the Lenders.
8.4 Preservation of Rights. No delay or omission of the Lenders, the
-----------------------
Issuing Lenders or the Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance of a Letter of
Credit notwithstanding the existence of a Default or the inability of the
Borrowers to satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence. Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment
or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in writing signed by the Lenders
required pursuant to Section 8.3, and then only to the extent in such writing
-----------
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative and all shall be available to the Agent, the
Issuing Lenders and the Lenders until the Obligations have been paid in full.
ARTICLE IX: GENERAL PROVISIONS
-----------------------------------
9.1 Survival of Representations. All representations and warranties of
---------------------------
the Borrowers and Subsidiary Obligors contained in this Agreement shall
survive delivery of this Agreement and the making of the Loans herein
contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
------------------------
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrowers and neither the Agent nor any Issuing Lender shall be obligated
to issue any Letter of Credit for the account of any Borrower or Subsidiary
Obligor in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Performance of Obligations. Each of the Borrowers and the
----------------------------
Subsidiary Obligors agrees that the Agent may, but shall have no obligation to
(i) at any time, pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral and (ii)
after the occurrence and during the continuance of a Default make any other
payment or perform any act required of any Borrower or Subsidiary Obligor
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral.
The Agent shall use its best efforts to give the applicable Borrower or
Subsidiary Obligor notice of any action taken under this Section 9.3 prior to
-----------
the taking of such action or promptly thereafter provided the failure to give
such notice shall not affect the applicable Borrower's or Subsidiary Obligor
obligations in respect thereof. Each of the Borrowers and the Subsidiary
Obligors agrees to pay the Agent, upon demand, the principal amount of all
funds advanced by the Agent under this Section 9.3, together with interest
-----------
thereon at the rate from time to time applicable to Base Rate Loans from the
date of such advance until the outstanding principal balance thereof is paid
in full. If any Borrower or Subsidiary Obligor fails to make payment in
respect of any such advance under this Section 9.3 within one (1) Business Day
-----------
after the date such Borrower or Subsidiary Obligor receives written demand
therefor from the Agent, the Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the Agent, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata
Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day during
the period commencing on the date of such demand and ending on the date such
amount is received. The failure of any Lender to make available to the Agent
its Pro Rata Share of any such unreimbursed advance under this Section 9.3
-----------
shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Agent. All outstanding principal of, and
interest on, advances made under this Section 9.3 shall constitute Obligations
-----------
secured by the Collateral until paid in full by the Borrowers and the
Subsidiary Obligors.
9.4 Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire agreement
-----------------
and understanding among the Borrowers, the Subsidiary Obligors, the Agent, and
the Lenders and supersede all prior agreements and understandings relating to
the subject matter thereof.
9.6 Several Obligations; Benefits of this Agreement. The respective
-------------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other. The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7 Expenses; Indemnification.
--------------------------
(A) Expenses. Subject to the letter agreements dated February 25, 1998
--------
and November 3, 1997 among the Company, the Agent and the Arranger with
respect to costs and expenses incurred on or prior to the Closing Date, the
Borrowers and Subsidiary Obligors shall reimburse the Agent and the Arranger
for any reasonable costs, internal charges and out-of-pocket expenses
(including attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent or the Arranger, which attorneys and paralegals may
be employees of the Agent or the Arranger) paid or incurred by the Agent or
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. Each of the Borrowers and Subsidiary Obligors also agrees to
reimburse the Agent, the Lenders and the Issuing Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent,
the Lenders and the Issuing Lenders, which attorneys and paralegals may be
employees of the Agent, the Lenders or the Issuing Lenders) paid or incurred
by the Agent, any Lender or any Issuing Lender in connection with the
collection of the Obligations and enforcement of the Loan Documents. In
addition to expenses set forth above, each of the Borrowers and Subsidiary
Obligors agrees to reimburse the Agent, promptly after the request therefor,
for each audit, collateral analysis or other business analysis performed by
the Agent (or its authorized representative) for the benefit of the Lenders in
connection with this Agreement or the other Loan Documents in an amount equal
to the Agent's then customary charges for each person employed to perform such
audit or analysis, plus all reasonable costs and expenses (including without
limitation, travel expenses) incurred by the Agent in the performance of such
audit or analysis; provided, that each Borrower and Subsidiary Obligor shall
--------
only be responsible for expenses in connection with one (1) such audit or
business analysis performed with respect to such Borrower or Subsidiary
Obligor, as applicable, in any twelve-month period at a time when no Default
had occurred or was continuing. The Agent shall provide the Borrowers with a
detailed statement of all reimbursements requested under this Section 9.7(A).
--------------
(B) Indemnity. Each of the Borrowers and Subsidiary Obligors further
---------
agrees to defend, protect, indemnify, and hold harmless the Agent, the
Arranger, each and all of the Lenders, each and all of the Issuing Lenders,
and each of their respective Affiliates, and each of such Agent's, Arranger's,
Lender's, Issuing Lender's or Affiliate's respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article IV) (collectively, the "INDEMNITEES") from and
----------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall
be designated a party thereto), imposed on, incurred by, or asserted against
such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents, or any act, event or
transaction related or attendant thereto, the making of the Loans, and the
issuance of and participation in Letters of Credit hereunder, the management
of such Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Loan Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety Requirements of
Law arising from or in connection with the past, present or future operations
of the Company, its Subsidiaries or any of their respective predecessors in
interest, or, the past, present or future environmental, health or safety
condition of any respective property of the Company or its Subsidiaries, the
presence of asbestos-containing materials at any respective property of the
Company or its Subsidiaries or the Release or threatened Release of any
Contaminant into the environment (collectively, the "INDEMNIFIED MATTERS");
provided, however, the Borrowers and Subsidiary Obligors shall have no
-------- -------
obligation to an Indemnitee hereunder with respect to (i) Indemnified Matters
-------
to the extent any such Indemnified Matter is found in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from such
Indemnitee's gross negligence or wilful misconduct or (ii) Indemnified Matters
arising solely out of a dispute between the Agent or a dispute between any
Lender and the Agent. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers and Subsidiary Obligors
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. Each of the
----------------------------------------------------
Borrowers and each of the Subsidiary Obligors agrees to assert no claim
against any of the Indemnitees on any theory of liability for consequential
damages, indirect damages, exemplary damages, punitive damages or any other
similar theory of damages howsoever categorized. No settlement shall be
entered into by the Company or any if its Subsidiaries with respect to any
claim, litigation, arbitration or other proceeding relating to or arising out
of the transaction evidenced by this Agreement or the other Loan
Documents(whether or not the Agent, any Lender, any Issuing Lender or any
Indemnitee is a party thereto) unless such settlement releases all Indemnitees
from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
------------------------
Borrowers and Subsidiary Obligors under this Section 9.7 shall survive the
-----------
termination of this Agreement.
9.8 Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10 Severability of Provisions. Any provision in any Loan Document
----------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11 Nonliability of Lenders. The relationship among the Borrowers, the
-----------------------
Subsidiary Obligors and the Lenders, Issuing Lenders and the Agent shall be
solely that of borrower and lender. Neither the Agent nor any Lender nor any
Issuing Lender shall have any fiduciary responsibilities to the Borrowers or
to the Subsidiary Obligors. Neither the Agent, nor any Lender, nor any
Issuing Lender undertakes any responsibility to the Borrowers or the
Subsidiary Obligors to review or inform the Borrowers or Subsidiary Obligors
of any matter in connection with any phase of the Borrowers' or Subsidiary
Obligors' business or operations.
9.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF
--------------
ITSELF, THE OTHER AGENTS, THE LENDERS AND THE ISSUING LENDERS, AT CHICAGO,
ILLINOIS BY ACKNOWLEDGING AND AGREEING TO IT THERE. THIS AGREEMENT SHALL BE
GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ILLINOIS. WITHOUT LIMITING THE FOREGOING, ANY DISPUTE BETWEEN
ANY BORROWER OR ANY SUBSIDIARY OBLIGOR AND THE AGENT, ANY LENDER, ANY ISSUING
LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM
IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
9.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
--------------------------------------------------------------
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
------------ --------------
PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO
WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION
--------------
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH OF THE BORROWERS AND SUBSIDIARY OBLIGORS
-------------------
AGREES THAT THE AGENT, ANY LENDER, ANY ISSUING LENDER OR ANY HOLDER OF SECURED
OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST ANY BORROWER OR ANY
SUBSIDIARY OBLIGOR OR ANY BORROWER'S OR SUBSIDIARY OBLIGOR'S PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER SUCH BORROWER OR SUBSIDIARY OBLIGOR OR (2) REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF THE
BORROWERS AND SUBSIDIARY OBLIGORS AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT UNDER THIS CLAUSE (B) BY
----------
SUCH PERSON TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
PERSON ALL OF WHICH PERMISSIVE COUNTERCLAIMS MAY BE BROUGHT ONLY IN THE
JURISDICTION SET FORTH IN CLAUSE (A) ABOVE. EACH OF THE BORROWERS AND
-----------
SUBSIDIARY OBLIGORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
-------------
(C) VENUE. EACH OF THE BORROWERS AND SUBSIDIARY OBLIGORS IRREVOCABLY
-------
WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY
----- --- ----------
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
--------------------
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
9.14 Subordination of Intercompany Indebtedness. Each of the Borrowers
------------------------------------------
and Subsidiary Obligors agrees that any and all claims of such Borrower or
Subsidiary Obligor against any other Borrower, any Subsidiary Obligor, any
endorser, obligor or any other guarantor of all or any part of the Secured
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all Secured
Obligations. Notwithstanding any right of any Borrower or Subsidiary Obligor
to ask, demand, xxx for, take or receive any payment from any other Borrower
or any Subsidiary Obligor, all rights, liens and security interests of any
Borrower or Subsidiary Obligor, whether now or hereafter arising and howsoever
existing, in any assets of any other Borrower or any Subsidiary Obligor
(whether constituting part of Collateral given to any Holder of Secured
Obligations or the Agent to secure payment of all or any part of the Secured
Obligations or otherwise) shall be and are subordinated to the rights of the
Holders of Secured Obligations and the Agent in those assets. No Borrower or
Subsidiary Obligor shall have any right to possession of any such asset or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Secured Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied and all financing
arrangements among the Borrowers, Subsidiary Obligors and the Holders of
Secured Obligations have been terminated. So long as any Default shall have
occurred and is continuing, if all or any part of the assets of any Borrower
or Subsidiary Obligor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Borrower or
Subsidiary Obligor, whether partial or complete, voluntary or involuntary, and
whether by reason of liquidation, bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or proceeding, or
if the business of any Borrower or Subsidiary Obligor is dissolved or if
substantially all of the assets of any Borrower or Subsidiary Obligor are
sold, then, and in any such event, any payment or distribution of any kind or
character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any such
Borrower or Subsidiary Obligor to any other Borrower or Subsidiary Obligor
("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered directly to the Agent
for application on any of the Secured Obligations, due or to become due, until
such Secured Obligations (other than contingent indemnity obligations) shall
have first been fully paid and satisfied. The Borrowers and the Subsidiary
Obligors irrevocably authorize and empower the Agent to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor and to make and present for and on behalf of the applicable Borrower
or Subsidiary Obligor such proofs of claim and take such other action, in the
Agent's own name or in the name of the applicable Borrower or Subsidiary
Obligor or otherwise, as the Agent may deem necessary or advisable for the
enforcement of this Section 9.14; provided, that the Agent agrees not to
------------- --------
exercise such powers unless a Default shall have occurred and is continuing.
The Agent may vote such proofs of claim in any such proceeding, receive and
collect any and all dividends or other payments or disbursements made thereon
in whatever form the same may be paid or issued and apply the same on account
of any of the Secured Obligations. Should any payment, distribution, security
or instrument or proceeds thereof be received by any Borrower or Subsidiary
Obligor upon or with respect to the Intercompany Indebtedness at any time a
Default shall have occurred and be continuing and prior to the satisfaction of
all of the Secured Obligations (other than contingent indemnity obligations)
and the termination of all financing arrangements among the Borrowers, the
Subsidiary Obligors and the Holders of Secured Obligations, the applicable
Borrower or Subsidiary Obligor shall receive and hold the same in trust, as
trustee, for the benefit of the Holders of Secured Obligations and shall so
long as any Default shall have occurred and be continuing promptly deliver the
same to the Agent, for the benefit of the Holders of Secured Obligations, in
precisely the form received (except for the endorsement or assignment of the
Borrower where necessary), for application to any of the Secured Obligations,
due or not due, and, until so delivered, the same shall be held in trust by
the Borrower or Subsidiary Obligor, as applicable, as the property of the
Holders of Secured Obligations. If any Borrower or Subsidiary Obligor fails
to make any such endorsement or assignment to the Agent, the Agent or any of
its officers or employees are irrevocably authorized to make the same. So
long as any Default shall have occurred and is continuing, the Borrowers and
Subsidiary Obligors agree that until the Secured Obligations (other than the
contingent indemnity obligations) have been paid in full (in cash) and
satisfied and all financing arrangements among the Borrowers, Subsidiary
Obligors and the Holders of Secured Obligations have been terminated, the
Borrowers and Subsidiary Obligors will not assign or transfer to any Person
(other than the Agent) any claim such Borrower or Subsidiary Obligor has or
may have against any other Borrower or Subsidiary Obligor.
9.15 No Strict Construction. The parties hereto have participated
------------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
ARTICLE X: THE AGENT
-------------------------
10.1 Appointment; Nature of Relationship. ABN AMRO Bank N.V. is
--------------------------------------
appointed by the Lenders (each reference in this Article X to a Lender being
---------
in its capacity either as a Lender or an Issuing Lender, or any or all of the
foregoing) as the Agent hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term "Agent," it is
-----
expressly understood and agreed that the Agent shall not have any fiduciary
---
responsibilities to any Lender by reason of this Agreement and that the Agent
is merely acting as the representative of the Lenders with only those duties
as are expressly set forth in this Agreement and the other Loan Documents. In
its capacity as the Lenders' contractual representative, the Agent (i) does
not assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders agrees to assert
no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender
waives.
10.2 Powers. The Agent shall have and may exercise such powers under
------
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties or fiduciary duties to the Lenders, or
any obligation to the Lenders to take any action hereunder or under any of the
other Loan Documents except any action specifically provided by the Loan
Documents required to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its respective
-----------------
directors, officers, agents or employees shall be liable to any of the
Borrowers, the Subsidiary Obligors, the Lenders or any Lender for any action
taken or omitted to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith except to the extent any such
action or inaction is found in a final non-appealable judgment by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.
10.4 No Responsibility for Loans, Creditworthiness, Collateral,
---------------------------------------------------------------
Recitals, Etc. Neither the Agent nor any of its respective directors,
-------
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of
any condition specified in Article IV; (iv) the existence or possible
-----------
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of any of the Liens on any of the
Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or
for the financial condition of any Subsidiary Obligor of any or all of the
Obligations, the Company or any of its Subsidiaries.
10.5 Action on Instructions of Lenders. The Agent shall in all cases be
---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders (except with respect to actions that require the consent of
all of the Lenders as provided in Section 8.3), and such instructions and any
-----------
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all Holders of Secured Obligations. The Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that
it may incur by reason of taking or continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of its
--------------------------------
duties hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact, and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement among the Agent and the Lenders, as the
case may be, and all matters pertaining to its duties hereunder and under any
other Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be entitled to
--------------------------------
rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8 The Agent's Reimbursement and Indemnification. The Lenders agree
---------------------------------------------
to reimburse and indemnify the Agent ratably in proportion to their respective
Pro Rata Shares (i) for any amounts not reimbursed by the Borrowers or
Subsidiary Obligors for which the Agent is entitled to reimbursement or
indemnification by the Borrowers or Subsidiary Obligors under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents including as a result of
a dispute among the Lenders or between any Lender and the Agent, and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
including as a result of a dispute among the Lenders or between any Lender and
the Agent, provided that no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have arisen from the gross negligence
or willful misconduct of the Agent.
10.9 Rights as a Lender. With respect to its Commitments, Loans made by
------------------
it and Letters of Credit issued by it as an Issuing Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document as
any Lender and may exercise the same as through it were not the Agent, and the
term "Lender" or "Lenders" or "Issuing Lender" or "Issuing Lenders", as
applicable, shall, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money
to, enter into Hedging Agreements and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Company or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
10.10 Lender Credit Decision. Each Lender acknowledges that it has,
------------------------
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Company, the Borrowers and
the Subsidiary Obligors and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement and the other Loan Documents.
10.11 Successor Agent. The Agent may resign at any time by giving
----------------
written notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint, on behalf
of the Borrowers and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty days after the retiring Agent's giving notice
of resignation, then the retiring Agent may appoint, on behalf of the
Borrowers and the Lenders, a successor Agent. Notwithstanding anything herein
to the contrary, so long as no Default has occurred and is continuing, each
such successor Agent shall be subject to approval by the Company, which
approval shall not be unreasonably withheld. Such successor Agent shall be a
commercial bank having capital and retained earnings of at least $500,000,000.
Upon the acceptance of any appointment as the Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder
and under the other Loan Documents. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article X shall continue in effect
---------
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent hereunder and under the other Loan Documents.
10.12 Collateral Documents. Each Lender authorizes the Agent to enter
--------------------
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. Each Lender agrees that no Lender
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights
and remedies may be exercised solely by the Agent for the benefit of the
Holders of Secured Obligations upon the terms of the Collateral Documents.
10.13. No Duties Imposed Upon Syndication Agent, Documentation Agent or
----------------------------------------------------------------
Arranger. None of the Persons identified on the cover page to this Agreement,
--------
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders identified on the cover page to
this Agreement, the signature pages to this Agreement or otherwise in this
Agreements as a "Syndication Agent" or "Documentation Agent" or "Arranger"
shall have or be deemed to have any fiduciary duty to or fiduciary
relationship with any Lender. In addition to the agreements set forth in
Section 10.10, each of the Lenders acknowledges that it has not relied, and
----------
will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE XI: SETOFF; RATABLE PAYMENTS
------------------------------------------
11.1 Setoff. In addition to, and without limitation of, any rights of
------
the Lenders or Issuing Lenders under applicable law, if any Default occurs and
is continuing, any indebtedness from any Lender or Issuing Lender to any of
the Borrowers or Subsidiary Obligors (including all account balances, whether
provisional or final and whether or not collected or available) may be offset
and applied toward the payment of the Obligations owing to such Lender, such
Issuing Lender and the other Obligations, whether or not the Obligations, or
any part hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Loans (other than payments received pursuant
to Sections 2.24, 3.1, 3.2 or 3.4) in a greater proportion than that received
------------- --- --- ---
by any other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans. If any Lender, whether
in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligation or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to the obligations owing to
them. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
11.3 Application of Payments. Subject to the provisions of Section 8.2,
----------------------- -----------
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
Section 11.3, apply all payments and prepayments in respect of any Obligations
---------
and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of the
Loans which the Agent may have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or the Borrower or
Subsidiary Obligor;
(B) second, to pay interest on and then principal of any advance made
under Section 9.3 for which the Agent has not then been paid by the Borrowers
-----------
or the Subsidiary Obligors or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and Issuing Lender;
(E) fifth, to pay interest due in respect of Loans and L/C Obligations;
(F) sixth, to the ratable payment or prepayment of principal outstanding
on Loans and Reimbursement Obligations and Hedging Obligations in such order
as the Agent may determine in its sole discretion;
(G) seventh, to provide required cash collateral if any pursuant to Section
-------
2.19; and
---
(H) eighth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior
to the occurrence of a Default) by the Borrowers, all principal payments in
respect of Loans shall be applied first, to repay outstanding Base Rate Loans,
-----
and then to repay outstanding Eurodollar Loans and Korean Eurodollar Loans
----
with those Eurodollar Loans and Korean Eurodollar Loans, as applicable, which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods. The order of priority set forth in this
Section 11.3 and the related provisions of this Agreement are set forth solely
--------
to determine the rights and priorities of the Agent, the Lenders, the Issuing
Lender and other Holders of Secured Obligations as among themselves. As long
as a Default shall have occurred and is continuing, the order of priority set
forth in clauses (D) through (H) of this Section 11.3 may at any time and from
----------- --- ------------
time to time be changed by the Required Lenders without necessity of notice to
or consent of or approval by the Borrowers, the Subsidiary Obligors, or any
other Person. The order of priority set forth in clauses (A) through (C) of
----------- ---
this Section 11.3 may be changed only with the prior written consent of the
-------------
Agent.
11.4 Relations Among Lenders.
-------------------------
(a) Except with respect to the exercise of set-off rights of any Lender
in accordance with Section 11.1, the proceeds of which are applied in
-------------
accordance with this Agreement, and each Lender agrees that it will not take
any action, nor institute any actions or proceedings, against any Borrower,
any Subsidiary Obligor or any other obligor hereunder or with respect to any
Collateral or Loan Document, without the prior written consent of the Required
Lenders or, as may be provided in this Agreement or the other Loan Documents,
at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein
in case of the Agent) authorized to act for, any other Lender.
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
----------------------------------------------------------------------
12.1 Successors and Assigns. The terms and provisions of the Loan
------------------------
Documents shall be binding upon and inure to the benefit of the Borrowers, the
Subsidiary Obligors and the Lenders and their respective successors and
assigns, except that (i) none of the Borrowers or Subsidiary Obligors shall
have the right to assign their rights or obligations under the Loan Documents
and (ii) any assignment by any Lender must be made in compliance with Section
-------
12.3 hereof. Notwithstanding clause (ii) of this Section 12.1, any Lender may
---- ----------- ------------
at any time, without the consent of any Borrower, any Subsidiary Obligor or
the Agent, assign all or any portion of its rights under this Agreement, if
any, issued to it to a Federal Reserve Bank; provided, however, that no such
-------- -------
assignment shall release the transferor Lender from its obligations hereunder.
The Agent may treat each Lender as the owner of the Loans made by such Lender
for all purposes hereof unless and until such Lender complies with Section
-------
12.3 hereof in the case of an assignment thereof or, in the case of any other
-
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Loan agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of any Loan, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Loan.
12.2 Participations.
--------------
(A) Permitted Participants; Effect. Subject to the terms set forth in
------------------------------
this Section 12.2, any Lender may, in the ordinary course of its business and
------------
in accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender, any Commitment of such Lender, any L/C Interest of such Lender or
any other interest of such Lender under the Loan Documents on a pro-rata or
non-pro-rata basis; provided that without the prior written consent of the
--------
Agent, the amount of such participation shall not be for less than $5,000,000.
Notice of such participation to the Company and the Agent shall be required
prior to any participation becoming effective with respect to a Participant
which is not a Lender or an Affiliate thereof. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of all Loans made by it
for all purposes under the Loan Documents, all amounts payable by the
Borrowers and Subsidiary Obligors under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Borrowers,
Subsidiary Obligors and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents except that, for purposes of Article III hereof, the
-----------
Participants shall be entitled to the same rights as if they were Lenders;
provided however that no Participant shall be entitled to receive any greater
----- -------
payment under such Article III than the Lender would have been entitled to
------------
receive with respect to the rights participated.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
-------------
without the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents other than any amendment, modification
or waiver with respect to any Loan or Commitment in which such Participant has
an interest which requires the consent of all of the Lenders under Section
-------
8.3.
(C) Benefit of Setoff. The Borrowers and the Subsidiary Obligors agree
-----------------
that each Participant shall be deemed to have the right of setoff provided in
Section 11.1 hereof in respect to its participating interest in amounts owing
-------------
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right of setoff provided
--------
in Section 11.1 hereof with respect to the amount of participating interests
-------------
sold to each Participant except to the extent such Participant exercises its
right of set off. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1
------------
hereof, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance with
Section 11.2 as if each Participant were a Lender.
-------------
12.3 Assignments.
-----------
(A) Permitted Assignments. Any Lender may, in the ordinary course of
----------------------
its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or a portion of its rights
and obligations under this Agreement, including, without limitation, any
Commitments, any Loans owing to it, all of its interests as Issuing Lender
with respect to Letters of Credit, all of its participation interests in
existing Letters of Credit and its obligation to participate in additional
Letters of Credit in accordance with the provisions of this Section 12.3.
------------
Such assignment shall be substantially in the form of Exhibit D hereto and,
---------
without the prior consent of the Agent, shall not be permitted hereunder
unless (i) such assignment is either for all of such Lender's rights and
obligations under the Loan Documents or involves Loans and Commitments in an
aggregate amount of at least $5,000,000 and (ii) the Purchaser shall be able
to fund in Korean Won its share of any Advance requested or deemed requested
in Korean Won by Purina Korea, Inc. Notice to the Agent and the Company and
consent of the Company and the Agent (which consents will not be unreasonably
withheld) shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, however, no consent of the Company shall be required for any
-------
assignment to become effective at a time when a Default has occurred and is
continuing.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice
----------------------
of assignment, substantially in the form attached as Appendix I to Exhibit D
---------- ---------
hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required by
Section 12.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for
-----------
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment, Loans
and L/C Obligations under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser, if
not already a Lender, shall for all purposes be a Lender party to this
Agreement and any other Loan Documents executed by the Lenders and shall have
all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no consent or action
by any of the Borrowers, Subsidiary Obligors or the Lenders and no further
consent or action by the Agent shall be required to release the transferor
Lender with respect to the percentage of the Commitments, Loans and Letter of
Credit participations assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3(B), if requested
---------------
by the transferor Lender or Purchaser, the transferor Lender, the Agent and
the Borrowers shall make appropriate arrangements so that, to the extent notes
have been issued to evidence any of the transferred Loans, replacement notes
are issued to such transferor Lender and new notes or, as appropriate,
replacement notes, are issued to such Purchaser, in each case in principal
amounts reflecting their Commitments, as adjusted pursuant to such assignment.
(C) The Register. The Agent shall maintain at its address referred to
------------
in Section 13.1 a copy of each assignment delivered to and accepted by it
-------------
pursuant to this Section 12.3 and a register (the "REGISTER") for the
- -------------
recordation of the names and addresses of the Lenders and the Commitments of
-
and principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an assignment under this Section 12.3. The entries in the
-------------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Company and each of its Subsidiaries, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
12.4 Confidentiality. Subject to Section 12.5, the Agent and the
--------------- -------------
Lenders shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement in accordance with such Person's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices. Each of the Agent and the
Lenders agrees that it will not make use of any such confidential information
for personal gain or for transactions other than those contemplated by this
Agreement, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by
such Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Company and its
Subsidiaries provided that such source is not bound by a confidentiality
agreement known to such Agent or such Lender; provided, however, that the
-------- -------
Agent and any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which such Agent
or such Lender is subject or in connection with an examination of such Agent
or such Lender by any such Governmental Authority; (B) pursuant to subpoena or
other court process (and shall use its best efforts to provide advance notice
thereof to the extent foreseeable and permitted); (C) when required to do so
in accordance with the provisions of any applicable requirement of law (and
shall use its best efforts to provide advance notice thereof to the extent
foreseeable and permitted); (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent, any Lender or
their respective affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Agent's or such Lender's independent
auditors, accountants, attorneys and other professional advisors; (G) to any
affiliate of the Agent or such Lender, or to any prospective Transferee,
provided that such affiliate or prospective Transferee agrees to keep such
information confidential to the same extent required of the Agent and the
Lenders hereunder (and, so long as no Default shall have occurred and is
continuing, shall use its best efforts to provide advance notice thereof); and
(H) as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any of its Subsidiaries is
party or is deemed party with such Agent or such Lender. In any event, the
Agent and the Lenders may make disclosure reasonably required by a prospective
Transferee in connection with the contemplated participation or assignment or
as required or requested by any Governmental Authority or representative
thereof or pursuant to legal process and shall require any such Transferee or
prospective Transferee to agree (and require any of its Transferees to agree)
to comply with this Section 12.4. In no event shall the Agent or any Lender
------------
be obligated or required to return any materials furnished by the Borrowers or
Subsidiary Obligors; provided, however, each prospective Transferee shall be
-------- -------
required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrowers or
Subsidiary Obligors in connection with this Agreement.
12.5 Dissemination of Information1. Each of the Borrowers and
-------------------------------
Subsidiary Obligors authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "TRANSFEREE") and any prospective Transferee any and
all information in such Lender's possession concerning the Company and its
Subsidiaries and the Collateral; provided that prior to any such disclosure,
--------
such prospective Transferee shall agree to preserve in accordance with Section
-------
12.4 the confidentiality of any confidential information described therein.
----
ARTICLE XIII: NOTICES
-------------------------
13.1 Giving Notice. Except as otherwise permitted by Section 2.11 with
------------- ------------
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by facsimile and addressed or delivered to such party, with respect
to any Borrower or any Subsidiary Obligor, in care of the Company at the
address set forth below, and for any other party at its address set forth
below its signature hereto or at such other address as may be designated by
such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by facsimile, shall be deemed given when
transmitted; or, if by courier, one (1) Business Day after deposit with a
reputable overnight carrier services, with all charges paid. Notices to any
Borrower or any Subsidiary Obligor shall be addressed as follows:
Agribrands International, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxxx
Chief Financial Officer
Phone: (000)000-0000
Facsimile: (000)000-0000
13.2 Change of Address. Any of the Borrowers, Subsidiary Obligors, the
-----------------
Agent and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
ARTICLE XIV: COUNTERPARTS
-----------------------------
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this
Agreement by signing any such counterpart. Delivery of an executed signature
page hereof or thereof by facsimile transmission shall be effective as
delivery of a manually signed counterpart. This Agreement shall be effective
when it has been executed by the Borrowers, the Subsidiary Obligors, the Agent
and the Lenders and each party as notified the Agent by facsimile or
telephone, that it has taken such action.
IN WITNESS WHEREOF, the Borrowers, the Subsidiary Obligors, the Lenders and
the Agent have executed this Agreement as of the date first above written.
AGRIBRANDS INTERNATIONAL, INC.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
AGRIBRANDS CANADA, INC.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA ITALIA, S.P.A.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA ESPANA, S.A.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA HUNGARIA ANIMAL FEED PRODUCTION & TRADING COMPANY, LTD.
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
PURINA KOREA, INC.
as a Borrower and Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
INDUSTRIAS PURINA S.A. DE C.V.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA COLOMBIANA S.A.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
AGRIBRANDS PURINA DO BRASIL, LTDA.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA PHILIPPINES, INC.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
PURINA VENEZUELA, C.A.
as a Subsidiary Obligor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Assistant Treasurer
ABN AMRO BANK N.V.
as the Agent, an Issuing Lender,
and as a Lender
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
Notice Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: ________________
Telephone No.: 312/904-____
Facsimile No.: 312/904-_____
Payment Address for Dollars: Same as above.
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Authorized Agent
Notice Address:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx Xxxxx 0000, 0-00
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Payment Address for Dollars: Same as above.
THE BANK OF NOVA SCOTIA,
as Documentation Agent and as a Lender
By: /s/ F.C.H. Xxxxx
Name: F.C.H. Xxxxx
Title: Senior Manager - Loan Operations
Notice Address:
The Bank of Nova Scotia - Atlanta Agency
000 Xxxxxxxxx Xxxxxx XX -- Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Mr. Xxxxxx Xxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Payment Address for Dollars: Same as above.
CREDIT LYONNAIS, CHICAGO BRANCH.
as Syndication Agent and as a Lender
By: /s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: First Vice President
Notice Address:
Credit Lyonnais Chicago Branch
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Payment Address for Dollars: Same as above.
BANQUE NATIONALE DE PARIS,
as a Lender
By: /s/ Xxxxxx Xxxxxx du Bocage
Name: Xxxxxx Xxxxxx du Xxxxxx
Title: Executive Vice President and General Manager
Notice Address:
000 Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Payment Address for Dollars: Same as above.
THE BANK OF NOVA SCOTIA, SEOUL BRANCH,
as a Lender
By: /s/ X.X. Xxxxx
Name: X.X. Xxxxx
Title: Vice President and Manager
Notice Address:
9th Fl., KCCI Bldg.,
#00, 0-xx, Xxxxxxxxx-xx
Xxxxx-xx, Xxxxx, Xxxxx
Attention: X.X. Xxxxx
Telephone No.: 00-000-0000
Facsimile No.: 00-000-0000
Payment Address for Dollars: Same as above.
EXHIBIT A
TO
SHORT TERM CREDIT AGREEMENT
COMMITMENTS
Lender Amount of Commitment % of Aggregate Commitment
---------------------------------- --------------------- --------------------------
ABN AMRO Bank N.V. . . . . . . . . $ 15,000,000 27.000000000%
The Bank of Nova Scotia. . . . . . $ 13,750,000 25%
Credit Lyonnais. . . . . . . . . . $ 13,750,000 25%
The First National Bank of Chicago $ 7,500,000 13.636363636%
Banque Nationale de Paris. . . . . $ 5,000,000 9.09090909%
TOTAL. . . . . . . . . . . . . . . $ 55,000,000 100%
----------------------------------
EXHIBIT B
TO
SHORT TERM CREDIT AGREEMENT
[RESERVED].
EXHIBIT C
TO
SHORT TERM CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
---------------------------------
Pursuant to [Section 4.2] [Section 6.1(A)(iii)] of the Short Term Credit
----------- -------------------
Agreement (as amended, modified, restated or supplemented from time to time,
the "Credit Agreement"), dated as March 31, 1998, by and among Agribrands
International, Inc. (the "Company"), the Subsidiary Borrowers parties thereto,
the Subsidiary Obligors parties thereto, the financial institutions from time
to time party thereto (the "Lenders"), and ABN AMRO Bank N.V., as contractual
representative for itself and the other Lenders, the Company, through its
___________________________, hereby delivers to the Agent[, together with the
financial statements being delivered to the Agent pursuant to Section 6.1(A)
--------------
of the Credit Agreement,] this Compliance Certificate (the "Certificate") [for
the accounting period from ____________, 19__ to ___________, 19__].
Capitalized terms used herein shall have the meanings set forth in the Credit
Agreement. Subsection references herein relate to subsections of the Credit
Agreement.
I. MANDATORY PREPAYMENTS (Section 2.2(B))
---------------
A. Section 2.2(B)
---------------
(1) State whether the Dollar Amount of the Revolving Credit Obligations
exceeds 105% of the Aggregate Commitment. Yes/No
(2) If the answer to question (1) is yes, state the amount, if required,
of any mandatory prepayment on Schedule A.
-----------
II. FINANCIAL COVENANTS
A. MINIMUM INTEREST COVERAGE RATIO (Section 6.4(A))
---------------
1. EBITDA (net sales - cost of products sold -
selling, general and administrative expenses +
depreciation + amortization) for the period
from _______ to ________ $___________
2. Cash Interest Expense (as defined) for the period
from _______ to ________ $___________
3. "Interest Coverage" (Ratio of (1) to (2)) TO 1.0
B. MAXIMUM LEVERAGE RATIO (Section 6.4(B))
---------------
1. Total Debt (as defined) $___________
2. EBITDA (as determined under item II(A) above)
$___________
3. "Leverage Ratio" (Ratio of (1) to (2)) TO 1.0
C. CAPITAL EXPENDITURES (Section 6.4(C)).
---------------
State whether Capital Expenditures (as defined) was less than
or equal to [$_______] as at the end of the most recently
completed fiscal year. Yes/No
------
D. MINIMUM CONSOLIDATED NET WORTH
(Section 6.4(D)).
---------------
State whether Consolidated Net Worth (as defined)
was greater than [$________] at all times for the period
from __________ to __________ Yes/No
------
E. COUNTRY DEBT LIMITATIONS (Section 6.4(E))
---------------
1. State whether the Borrowers or Subsidiary Obligors
incurred Indebtedness under the Credit Agreement
in excess of the maximum Dollar Amount set forth
below:
Borrower's or Subsidiary Obligor's
Jurisdiction of Incorporation Maximum Dollar Amount
----------------------------------------------------------------- ----------------------
Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,500,000
----------------------------------------------------------------- ----------------------
United States . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000
----------------------------------------------------------------- ----------------------
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,000,000
----------------------
Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500,000
----------------------
Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000
----------------------------------------------------------------- ----------------------
Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000
----------------------------------------------------------------- ----------------------
Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000
----------------------------------------------------------------- ----------------------
Colombia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000
----------------------
Brazil. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000
----------------------
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500,000
----------------------
Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500,000
----------------------------------------------------------------- ----------------------
Yes/No
-----------------------------------------------------------------
2. State whether (x) the ratio of (i) Total Debt (as defined,
including Indebtedness owed to Affiliates but excluding
Contingent Obligations in the form of standby Letters of Credit
issued under the Credit Agreement for the account of such
Subsidiary Borrower or Subsidiary Obligor for the benefit of
domestic financial institutions as support for loans and advances
made by such financial institutions to the applicable Subsidiary
Borrower or Subsidiary Obligor to the extent any such loans or
advances are outstanding) to (ii) EBITDA (as determined under
item IIA above) for each of the Subsidiary Borrowers and
Subsidiary Obligors (other than Purina Korea, Inc.) at any time
exceeded 3.00 to 1.00 or (y) the ratio of (i) Total Debt (as
defined, including Indebtedness owed to Affiliates but excluding
Contingent Obligations in the form of standby Letters of Credit
issued under the Credit Agreement for the account of Purina
Korea, Inc. for the benefit of domestic financial institutions as
support for loans and advances made by such financial
institutions to Purina Korea, Inc. to the extent any such loans
and advances are outstanding) to (ii) EBITDA (as determined
under item IIA above) for Purina Korea, Inc. at any time
exceeded 2.25 to 1.00.
Yes/No
------
The Company hereby certifies, through its _________________, that the
information set forth above is accurate as of _______________, ____, to the
best of such officer's knowledge, after diligent inquiry, and that the
financial statements delivered herewith present fairly the financial position
of the Company and its Subsidiaries at the dates indicated and the results of
their operations and changes in their financial position for the periods
indicated in conformity with Agreement Accounting Principles, consistently
applied.
Dated: ______________, ____
AGRIBRANDS INTERNATIONAL, INC.
By:________________________________
Name:
Title:
EXHIBIT D
TO
SHORT TERM CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
------------------------------------------------
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") between (the
ASSIGNOR) and (the "ASSIGNEE") is dated as of,. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Short Term
----------------------
Credit Agreement (which, as it may be amended, restated, supplemented,
modified, renewed or extended from time to time is herein called the "CREDIT
AGREEMENT") described in Item 1 of Schedule 1 attached hereto ("SCHEDULE 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
-------------------------
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans,
if the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
--------------
(the "EFFECTIVE DATE") shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the
Agent) after a Notice of Assignment substantially in the form of Appendix I
----------
(attached hereto) has been delivered to the Agent. Such Notice of Assignment
must include the consents, if any, required to be delivered to the Agent by
Section 12.3(A) of the Credit Agreement. In no event will the Effective Date
--------------
occur if the payments required to be made by the Assignee to the Assignor on
the Effective Date under Sections 4 and 5 hereof are not made on the proposed
----------------
Effective Date. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the rights and
obligations of a Lender under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
--------------------
shall be entitled to receive from the Agent all payments of principal,
interest and fees with respect to the interest assigned hereby. The Assignee
shall advance funds directly to the Agent with respect to all Loans and
reimbursement payments made on or after the Effective Date with respect to the
interest assigned hereby. [In consideration for the sale and assignment of
Loans hereunder, (i) the Assignee shall pay the Assignor, on the Effective
Date, an amount equal to the principal amount of the portion of all Base Rate
Loans assigned to the Assignee hereunder and (ii) with respect to each
Eurodollar Loan and Korean Eurodollar Loan made by the Assignor and assigned
to the Assignee hereunder which is outstanding on the Effective Date, (a) on
the last day of the Interest Period therefor or (b) on such earlier date
agreed to by the Assignor and the Assignee or (c) on the date on which any
such Eurodollar Loan and Korean Eurodollar Loan either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the
------------ --- ---
"PAYMENT DATE"), the Assignee shall pay the Assignor in Dollars an amount
equal to the principal amount of the portion of such Eurodollar Rate Loan or
Korean Eurodollar Loan, as applicable, assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that
the Payment Date for such Eurodollar Loan or Korean Eurodollar Loan shall be
the Effective Date, they shall agree to the interest rate applicable to the
portion of such Loan assigned hereunder for the period from the Effective Date
to the end of the existing Interest Period applicable to such Eurodollar Rate
Loan or Korean Eurodollar Loan (the "AGREED INTEREST RATE") and any interest
received by the Assignee in excess of the Agreed Interest Rate shall be
remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the
applicable Borrower with respect to any Eurodollar Loan or Korean Eurodollar
Loan sold by the Assignor to the Assignee hereunder, the Assignee shall pay to
the Assignor interest for such period on the portion of such Eurodollar Loan
or Korean Eurodollar Loan sold by the Assignor to the Assignee hereunder at
the applicable rate provided by the Credit Agreement. In the event a
prepayment of any Eurodollar Loan or Korean Eurodollar Loan which is existing
on the Payment Date and assigned by the Assignor to the Assignee hereunder
occurs after the Payment Date but before the end of the Interest Period
applicable to such Eurodollar Loan or Korean Eurodollar Loan, the Assignee
shall remit to the Assignor the excess of the prepayment penalty paid with
respect to the portion of such Eurodollar Loan or Korean Eurodollar Loan
assigned to the Assignee hereunder over the amount which would have been paid
if such prepayment penalty was calculated based on the Agreed Interest Rate.
The Assignee will also promptly remit to the Assignor (i) any principal
payments received from the Agent with respect to Eurodollar Loans or Korean
Eurodollar Loan prior to the Payment Date and (ii) any amounts of interest on
Loans and fees received from the Agent which relate to the portion of the
Loans assigned to the Assignee hereunder for periods prior to the Effective
Date, in the case of Base Rate Loans or fees, or the Payment Date, in the case
of Eurodollar Loans or Korean Eurodollar Loan, and not previously paid by the
Assignee to the Assignor.] In the event that either party hereto receives any
payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The [Assignee shall pay to the
--------------------------------
Assignor a fee on each day on which a payment of interest or commitment fees
is made under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or commitment fees for
the period prior to the Effective Date or, in the case of Eurodollar Loans or
Korean Eurodollar Loan, the Payment Date, which the Assignee is obligated to
deliver to the Assignor pursuant to Section 4 hereof). The amount of such fee
shall be the difference between (i) the interest or fee, as applicable, paid
with respect to the amounts assigned to the Assignee hereunder and (ii) the
interest or fee, as applicable, which would have been paid with respect to the
amounts assigned to the Assignee hereunder if each interest rate was of 1%
less than the interest rate paid by the Borrowers or if the commitment fee was
___ of 1% less than the commitment fee paid by the Borrowers, as applicable.
In addition, the] [Assignee][Assignor] agrees to pay a $3,500 processing fee
required to be paid to the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
--------------------------------------------------------------
LIABILITY. The Assignor represents and warrants that it is the legal and
--------
beneficial owner of the interest being assigned by it hereunder and that such
---
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor,
the Agent, nor any other Lender, nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution,
legality, validity, enforceability, genuineness, sufficiency or collectability
of any Loan Document, including without limitation, documents granting the
Assignor, Agent and the other Lenders a security interest in assets of the
Company, any Subsidiary Borrower or any Subsidiary Obligor or any guarantor,
(ii) any representation, warranty or statement made in or in connection with
any of the Loan Documents, (iii) the financial condition or creditworthiness
of the Company, any Subsidiary Borrower or any Subsidiary Obligor or any
guarantor, (iv) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (v) inspecting any of the property,
books or records of the Company, any Subsidiary Borrower or any Subsidiary
Obligor, (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or (vii) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
-------------------------------
it has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Loan Documents, (iii) appoints and authorizes
the Agent to take such action as contractual representative on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto, (iv) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, including, without limitation, making Loans to
Purina Korea, Inc. in Korean Won, (v) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vi)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as
defined under ERISA and that its rights, benefits and interests in and under
the Loan Documents will not be "plan assets" under ERISA, [and (vii) attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying that the Assignee is entitled to receive payments under the Loan
Documents without deduction or withholding of any United States federal income
taxes].
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
---------
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
----------------------
have the right pursuant to Section 12.3(A) of the Credit Agreement to assign
---------------
the rights which are assigned to the Assignee hereunder to any entity or
person, provided that (i) any such subsequent assignment does not violate any
of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee is
not thereby released from its obligations to the Assignor hereunder, if any
remain unsatisfied, including, without limitation, its obligations under
[Sections 4, 5 and 8] hereof.
-------------------
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
-------------------------------------
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
----------------
of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between
the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by and
-------------
interpreted and enforced in accordance with the internal laws of the State of
Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
-------
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:
Name:
Title
[NAME OF ASSIGNEE]
By:
Name:
Title
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
SHORT TERM CREDIT AGREEMENT DATED AS OF MARCH 31, 1998 AMONG AGRIBRANDS
INTERNATIONAL, INC. (THE "COMPANY"), THE SUBSIDIARY BORROWERS PARTIES THERETO,
THE SUBSIDIARY OBLIGORS PARTIES THERETO, THE INSTITUTIONS FROM TIME TO TIME
PARTY THERETO AS LENDERS (THE "LENDERS"), AND ABN AMRO BANK N.V., AS
CONTRACTUAL REPRESENTATIVE ON BEHALF OF THE LENDERS.
2. Date of Assignment Agreement:,
3. Amounts to be Assigned (As of Date of Item 2 above):
-- REVOLVING LOAN
FACILITY
-----------------------------------------------------
TOTAL OF COMMITMENTS (LOANS) UNDER THE CREDIT
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . $
----------------------------------------------------- -
ASSIGNEES PERCENTAGE OF FACILITY PURCHASED UNDER THE
ASSIGNMENT AGREEMENT
___%
-----------------------------------------------------
AMOUNT OF ASSIGNED SHARE OF FACILITY UNDER THE
ASSIGNMENT AGREEMENT. . . . . . . . . . . . . . . . . $
4. Assignee's Aggregate (Loan
Amount)** Commitment Amount
Purchased Hereunder: $
5. Proposed Effective Date: _________ __, ____
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Name: Name:
Title: Title:
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
APPENDIX I
to Assignment Agreement
NOTICE
OF ASSIGNMENT
--------------
APPENDIX I to Assignment Agreement NOTICE OF ASSIGNMENTAPPENDIX I
-------------
to Assignment Agreement NOTICE OF ASSIGNMENTI to Assignment
-------------
Agreement NOTICE OF ASSIGNMENT to Assignment Agreement NOTICE
-------------
OF ASSIGNMENT
--------------
, 19
To: ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: [_______]
Telephone No.: 312/[________]
Facsimile No.: 312/[________]
AGRIBRANDS INTERNATIONAL, INC.
0000 Xxxxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: [_____________________]
Telephone No.: ___-___-____
Facsimile No.: ___-___-____
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Short Term Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to the Agent pursuant to Section 12.3(B) of the Credit Agreement.
----------------
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of, 19 (the "Assignment"), pursuant to which, among other
things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to
the facilities listed in Item 3 of Schedule 1. The Effective Date of the
Assignment shall be the later of the date specified in Item 5 of Schedule 1 or
two Business Days (or such shorter period as agreed to by the Agent) after
this Notice of Assignment and any consents and fees required by Sections
--------
12.3(A) and 12.3(B) of the Credit Agreement have been delivered to the Agent,
-- -------
provided that the Effective Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to each Borrower and the
Subsidiary Obligors and the Agent notice of the assignment and delegation
referred to herein. The Assignor will confer with the Agent before the date
specified in Item 5 of Schedule 1 to determine if the Assignment Agreement
will become effective on such date pursuant to Section 3 hereof, and will
confer with the Agent to determine the Effective Date pursuant to Section 3
hereof if it occurs thereafter. The Assignor shall notify the Agent if the
Assignment Agreement does not become effective on any proposed Effective Date
as a result of the failure to satisfy the conditions precedent agreed to by
the Assignor and the Assignee. At the request of the Agent, the Assignor
will give the Agent written confirmation of the satisfaction of the conditions
precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before
the Effective Date the processing fee of $3,500 required by Section 12.3(B) of
---------------
the Credit Agreement.
6. If notes evidencing the Borrowers' Obligations to the Assignor are
outstanding on the Effective Date, the Assignor and the Assignee request and
direct that the Agent prepare and cause the Borrowers to execute and deliver
new notes or, as appropriate, replacements notes, to the Assignor and the
Assignee. The Assignor and, if applicable, the Assignee each agree to deliver
to the Agent the original notes received by it from the Borrowers upon its
receipt of new notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its contractual
representative under the Loan Documents in accordance with the terms thereof.
The Assignee acknowledges that the Agent has no duty to supply information
with respect to any Borrower, any Subsidiary Obligor or the Loan Documents to
the Assignee until the Assignee becomes a party to the Credit Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Name: Name:
Title: Title:
ACKNOWLEDGED AND CONSENTED TO:
ABN AMRO BANK N.V., as Agent
By:
Name:
Title:
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT E
TO
SHORT TERM CREDIT AGREEMENT
LIST OF CLOSING DOCUMENTS
----------------------------
[Attached]
$110,000,000
CREDIT FACILITIES
TO
AGRIBRANDS INTERNATIONAL, INC.
and certain Subsidiaries thereof
March 31, 1998
LIST OF CLOSING DOCUMENTS
-------------------------
A. LOAN AND SECURITY DOCUMENTS
------------------------------
Credit Agreement ("Short Term Credit Agreement") among Agribrands
International, Inc., a Missouri corporation (the "Company"), the Subsidiary
Borrowers parties thereto, the Subsidiary Obligors parties thereto, the
financial institutions from time to time party thereto (collectively, the
"Lenders") and ABN AMRO Bank N.V., in its capacity as contractual
representative (the "Agent") for the Lenders, evidencing a 364-day $55,000,000
revolving credit facility to the Company, the Subsidiary Borrowers and the
Subsidiary Obligors from the Lenders.
Credit Agreement ("Long Term Credit Agreement", and, together with
the Short Term Credit Agreement, the "Credit Agreements") among the Company,
the Subsidiary Borrowers parties thereto, the Subsidiary Obligors parties
thereto, the Lenders and the Agent, evidencing a three-year $55,000,000
revolving credit facility to the Company, the Subsidiary Borrowers and the
Subsidiary Obligors from the Lenders.
Pledge Agreements from the Company to the Agent evidencing the
Borrower's pledge of (i) 65% of the Capital Stock of each of the Subsidiary
Borrowers and Subsidiary Obligors as security for the Obligations under each
of the Credit Agreements and (ii) 100% of the Capital Stock of each of the
Subsidiary Borrowers and Subsidiary Obligors as security for the Obligations
under each of the Credit Agreements of the other Subsidiary Borrowers and
Subsidiary Obligors and (iii) 100% of the Capital Stock of AgriInternational
Holdings, Inc., a Delaware corporation ("Holdings") as security for the
Obligations under each of the Credit Agreements, together with STOCK
CERTIFICATES and stock powers duly executed in blank.
Guarantee executed by the Company in favor of the Agent, guarantying
all of the Obligations of each of the Subsidiary Borrowers and Subsidiary
Obligors under the Credit Agreements.
Guarantee executed by Holdings in favor of the Agent, guarantying
all of the Obligations under the Credit Agreement.
Guarantee executed by each of the Subsidiaries of the Company listed
on Appendix A hereto in favor of the Agent, guarantying all of the Obligations
of each of the other Subsidiary Borrowers and Subsidiary Obligors under the
Credit Agreements.
Contribution Agreement executed by each of the Subsidiaries of the
Company listed on Appendix A hereto.
B. CORPORATE DOCUMENTS
--------------------
Certificate of the Secretary of the Company certifying (i)
resolutions of the Board of Directors of the Company approving and authorizing
the execution, delivery and performance of each document to which it is a
party, (ii) that there have been no changes in the Articles of Incorporation
of the Company since the date of the most recent certification thereof by the
Secretary of State of Missouri delivered to the Agent, (iii) the names and
true signatures of the incumbent officers of the Company authorized to sign
the documents to which it is a party, and (iv) the By-laws (attached thereto)
of the Company as in effect on the date of such certification.
Articles of Incorporation of the Company certified by the Secretary
of State of Missouri.
Good Standing Certificate for the Company from the offices of the
Secretary of State of Missouri.
Certificate of the Secretary of each of the Subsidiaries of the
Company listed on Appendix A hereto certifying (i) resolutions of the
governing board of each such Subsidiary approving and authorizing the
execution, delivery and performance of each document to which it is a party,
(ii) that there have been no changes in the constitutive agreements of such
Subsidiary since the date of the most recent certification thereof by the
appropriate Governmental Authority of its jurisdiction of incorporation
delivered to the Agent, (iii) the names and true signatures of the incumbent
officers of such Subsidiary authorized to sign the documents to which it is a
party, and (iv) the by-laws (attached thereto) of such Subsidiary as in effect
on the date of such certification.
Constitutive Agreements of each Subsidiary of the Company listed on
Appendix A hereto certified by the appropriate Governmental Authority of its
respective jurisdiction of incorporation.
C. LEGAL OPINIONS
---------------
Opinion of U.S. counsel to the Borrowers and Holdings in form and
substance satisfactory to the Agent: Xxxxx Xxxx L.L.P.
Opinion of foreign counsel to the Borrowers and Subsidiary Obligors
in form and substance satisfactory to the Agent in each of the jurisdictions
indicated below:
x. Xxxxxxx Xxxxxxxx, Xxxx & Xxxxxx [CANADA]
x. Xxxxx X. Xxxxxxx [ITALY]
c. Price Waterhouse, Edifici Caga De Madrid [SPAIN]
d. Burai-Xxxxxx & Partners [HUNGARY]
x. Xxx & Xxxxx [KOREA]
x. Xxxxx, Xxxxxx-Xxxxxxx Y Xxxxxxxxxx [MEXICO]
x. Xxxxxxxx & Xxxxxxxx [COLUMBIA]
x. Xxxxxxxx X. Xxxxxxx [BRAZIL]
i. Platon, Martinez, San Xxxxx & Xxxxx [PHILLIPPINES]
x. Xxxxxx Plaz & Xxxxxx [VENEZUELA]
D. CLOSING CERTIFICATES AND MISCELLANEOUS
-----------------------------------------
Pledged Account Agreement in respect of the Company's cash
collateral account, executed by each of the Company, the Agent and ABN Amro
Bank N.V.
Notice of Borrowing.
Officer's No-Default Certificate.
E. POST- CLOSING ITEMS
---------------------
APPENDIX A
LIST OF SUBSIDIARIES
----------------------
AgriInternational Holdings, Inc., a Delaware corporation
Agribrands Canada, Inc., a company organized under the federal laws of Canada
Purina Italia, S.p.A., a company organized under the laws of Italy
Purina Espana, S.A., a company organized under the laws of Spain
Purina Hungaria Animal Feed Production & Trading Company, Ltd., a company
organized under the laws of Hungary
Purina Korea, Inc., a corporation organized under the laws of the Republic of
Korea
Industrias Purina S.A. de C.V., a company organized under the laws of Mexico
Purina Colombiana S.A., a company organized under the laws of Colombia
Agribrands Purina do Brasil, Ltda., a company organized under the laws of
Brazil
Purina Philippines, Inc., a corporation organized under the laws of the
Philippines
Purina de Venezuela, C.A., a company organized under the laws of Venezuela
EXHIBIT F
TO
SHORT TERM CREDIT AGREEMENT
Form of Officer's Certificate
--------------------------------
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify that I am the of Agribrands
International, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"). Capitalized terms used herein and
not otherwise defined herein are as defined in that certain Short Term Credit
Agreement dated as of March 31, 1998, among the Company, the Subsidiary
Borrowers parties thereto, the Subsidiary Obligors parties thereto, the
financial institutions from time to time parties thereto as lenders (the
"Lenders"), ABN AMRO Bank N.V., in its capacity as contractual representative
for itself and the other Lenders (the "Agent") (as amended, restated,
supplemented or modified from time to time, the "Credit Agreement").
I further certify on behalf of the Company, that as of the date hereof,
to the best of my knowledge, after diligent inquiry of all relevant persons at
the Company and its Subsidiaries, (i) the representations and warranties of
the Borrowers and the Subsidiary Obligors contained in Article V of the Credit
---------
Agreement shall have been true and correct at all times during the period
commencing on __________, 19__ and ending on _____________, 19__ and as of the
date of this Officer's Certificate and (ii) as of the date of this Officer's
Certificate no Default or Unmatured Default exists [other than the following
(describe the nature of the Default or Unmatured Default and the status
thereof)].
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the Company
on this ____ day of ___________, ____.
____________________________
[Insert Name of Officer]
EXHIBIT G
TO
SHORT TERM CREDIT AGREEMENT
Financial Statements
[Attached].
EXHIBIT H
TO
CREDIT AGREEMENT
FORM OF REQUEST FOR LETTER OF CREDIT
------------------------------------------
TO: INSERT NAME OF ISSUING BANK., an Issuing Bank under that certain
Short Term Credit Agreement dated as of March 31, 1998 (the "Credit
Agreement") by and among Agribrands International, Inc. (the "Company"), the
Subsidiary Borrowers parties thereto, the Subsidiary Obligors parties thereto,
the financial institutions from time to time parties thereto (the "Lenders"),
and ABN AMRO Bank N.V., as contractual representative (the "Agent") for the
Lenders (such Credit Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement")
and
ABN AMRO BANK N.V., as Agent
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: [________]
Telecopier: 312-[_______]
Confirmation: 312-[______]
Pursuant to Section 2.16 of the Credit Agreement, the undersigned hereby
gives to the Issuing Bank a request for issuance of a [standby] [commercial]
Letter of Credit on behalf of the undersigned for the benefit ofINSERT NAME OF
BENEFICIARY., in the amount of [US $] [_____________ Korean Won], with an
effective date of ___________________, ____ (the "Effective Date") and an
expiry date of ___________, ____. [Provide description of documents and terms
in connection with commercial Letter of Credit].
The undersigned hereby certifies that (i) the representations and
warranties of the undersigned contained in Article V of the Credit Agreement
are and shall be true and correct in all material respects on and as of the
date hereof and on and as of the Effective Date; (ii) no Default or Unmatured
Default has occurred and is continuing on the date hereof or on the Effective
Date or will result from the issuance of the proposed Letter of Credit; and
(iii) the conditions set forth in Sections 2.16 and 4.2 of the Credit
Agreement have been satisfied.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Request for Letter of Credit.
Dated:,
[______________________]
By:
Name:
Title:
EXHIBIT I
TO
CREDIT AGREEMENT
FORM OF LETTER OF CREDIT
------------------------
[BENEFICIARY]
________________
________________
Re: Irrevocable Letter of Credit No., dated __________.
Dear [BENEFICIARY]:
[_______________________] (the "Issuer") hereby issues in favor of you,
[_______________], this irrevocable letter of credit ("Letter of Credit") for
an amount (the "Maximum Amount") of [U.S. $____________][______________ Korean
Won], effective immediately, which Maximum Amount will be reduced by the
amount of any payments made hereunder. Reference is hereby made to that
certain Short Term Credit Agreement, dated as of March 31, 1998, by and among
Agribrands International, Inc., a Missouri corporation (the "Company"), the
Subsidiary Borrowers parties thereto, the Subsidiary Obligors parties thereto,
the financial institutions from time to time parties thereto (the "Lenders"),
and ABN AMRO Bank N.V., as contractual representative (the "Agent") on behalf
of the Lenders (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.
The Issuer will honor one or more of your drafts drawn on the Issuer in
accordance with the terms set forth herein in an amount not in excess of the
Maximum Amount upon presentation prior to the Termination Date (as defined
below) of [(a) a draft in the form of Exhibit I attached hereto and made a
---------
part hereof, executed by you and (b) the original of this Letter of Credit
[and (c) _______________________________________________]] [your tested telex
stating the drawing amount and certifying that the amount claimed represents
amounts past due and outstanding under the facility granted by you to
[________________]].
Multiple drafts may be drawn under this Letter of Credit but the Maximum
Amount of this Letter of Credit will be permanently reduced by the amount of
any such draft. Presentation of the documents required for payment under this
Letter of Credit may be made by you prior to the expiration hereof at any time
during the Issuer's business hours at [_____________________________].
Provided that such documents and your presentation thereof conform to the
terms and conditions hereof, payment shall be made to you of the amount
demanded, in immediately available funds, not later than 3:00 p.m. (New York
time) three (3) business days following the presentment of the required
documents. If a demand for payment made by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, the
Issuer shall give you prompt notice that the purported negotiation was not
effected in accordance with the terms and conditions of this Letter of Credit,
stating the reasons therefor and that the Issuer is holding any documents at
your disposal or is returning the same to you, as the Issuer may elect. Upon
being notified that the proposed negotiation was not effected in accordance
with this Letter of Credit, you may attempt to correct any such non-conforming
demand for payment, if, and to the extent that, you are able to do so,
provided that any re-submission of documents shall be made not less than two
(2) business days prior to the expiration hereof.
This Letter of Credit shall expire at 5:00 p.m. (New York time) on
[______________] the "Termination Date").
This Letter of Credit is subject to the terms and conditions of the
Uniform Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce Publication No. 500, as amended or revised
from time to time ("Uniform Customs"), such amendments or revisions to be
controlling herein as of the official date of the effectiveness of such
amendments or revisions, as announced by the International Chamber of
Commerce. As to matters not governed by the Uniform Customs, the Letter of
Credit shall be deemed to be a contract made under the laws of the State of
New York and shall be governed and construed in accordance with the laws of
the State of New York. This Letter of Credit is not transferable in whole or
in part.
We undertake that your drafts drawn and presented on or before the time
of expiration of this Letter of Credit in conformity with the terms of this
Letter of Credit will be duly honored. Each draft must be marked "Drawn under
Irrevocable Letter of Credit No., dated [______________].
Very truly yours,
[______________________________]
By: ____________________
Name:
Title:
EXHIBIT "I"
to
IRREVOCABLE LETTER OF CREDIT NO.
Dated as of [_____________]
SIGHT DRAFT
------------
[DATE]
To: [ISSUER and ISSUER's Address]
Attention:
From: [BENEFICIARY]
Upon sight hereof, pay to the order of [__________________], the amount
of [U.S. $_____________][___________ Korean Won] in immediately available
funds, by remitting said amount to his account number ___________ at
______________________________, which amount is now due and payable by [NAME
OF BORROWER OR SUBSIDIARY OBLIGOR] to the undersigned and has not been paid.
This draft is drawn under Irrevocable Letter of Credit No., dated
[______________________].
(Name)
rset2Food
Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
Assignor and Assignee to insert applicable payment terms.
To be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
Amounts to be described in Dollars or Korean Won, as applicable.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement. Bold/italicized documents to
be prepared and/or provided by the Borrower and/or Borrower's Counsel.