Exhibit 10.4
CONFORMED COPY
================================================================================
CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 1996
AMONG
MBW FOODS INC.,
AS BORROWER,
MBW HOLDINGS INC.,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
AND
CHASE SECURITIES INC.,
AS ARRANGING AGENT
================================================================================
MBW FOODS INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS.............................. 2
1.1 Certain Defined Terms................................................ 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement...................................................... 35
1.3 Other Definitional Provisions........................................ 35
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................... 35
2.1 Commitments; Loans................................................... 35
2.2 Interest on the Loans................................................ 43
2.3 Fees................................................................. 47
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commit-
ments; General Provisions Regarding Payments; Application of Proceeds
of Collateral and Payments under Guaranties.......................... 48
2.5 Use of Proceeds...................................................... 57
2.6 Special Provisions Governing Eurodollar Rate Loans................... 58
2.7 Increased Costs; Taxes; Capital Adequacy............................. 60
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................ 65
SECTION 3.
LETTERS OF CREDIT........................... 65
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.............................................................. 65
3.2 Letter of Credit Fees................................................ 68
3.3 Drawings and Payments and Reimbursement of Amounts Paid Under
Letters of Credit.................................................... 69
3.4 Obligations Absolute................................................. 71
3.5 Indemnification; Nature of Issuing Lender's Duties................... 72
3.6 Increased Costs and Taxes Relating to Letters of Credit.............. 74
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT........................... 75
4.1 Conditions to Term Loans and Acquisition Revolving Loans............. 75
4.2 Conditions to All Loans.............................................. 81
4.3 Conditions to Letters of Credit...................................... 82
(i)
Page
SECTION 5.
REPRESENTATIONS AND WARRANTIES................... 83
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries................................................... 83
5.2 Authorization of Borrowing, etc...................................... 84
5.3 Financial Condition; Projections..................................... 86
5.4 No Material Adverse Change; No Restricted Junior Payments............ 86
5.5 Title to Properties; Liens; Intellectual Property.................... 87
5.6 Litigation; Adverse Facts............................................ 87
5.7 Payment of Taxes..................................................... 88
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts............................................................ 88
5.9 Governmental Regulation.............................................. 88
5.10 Securities Activities................................................ 89
5.11 Employee Benefit Plans............................................... 89
5.12 Certain Fees......................................................... 89
5.13 Environmental Protection............................................. 89
5.14 Employee Matters..................................................... 91
5.15 Solvency............................................................. 91
5.16 Matters Relating to Collateral....................................... 91
5.17 Related Agreements................................................... 92
5.18 Disclosure........................................................... 92
5.19 Subordination of Seller Notes........................................ 93
SECTION 6.
AFFIRMATIVE COVENANTS........................ 93
6.1 Financial Statements and Other Reports............................... 93
6.2 Corporate Existence, etc............................................. 99
6.3 Payment of Taxes and Claims; Tax Consolidation....................... 99
6.4 Maintenance of Properties; Insurance................................. 99
6.5 Inspection; Lender Meeting........................................... 100
6.6 Compliance with Laws, etc............................................ 100
6.7 Environmental Disclosure and Inspection.............................. 100
6.8 Company's Remedial Action Regarding Hazardous Materials.............. 102
6.9 Execution of Subsidiary Guaranty and Subsidiary Security Agreements
by Subsidiaries and Future Subsidiaries.............................. 102
6.10 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.................................................. 103
6.11 Further Assurances................................................... 105
SECTION 7.
NEGATIVE COVENANTS.......................... 106
7.1 Indebtedness......................................................... 106
(ii)
Page
7.2 Liens and Related Matters............................................ 107
7.3 Investments; Joint Ventures.......................................... 109
7.4 Contingent Obligations............................................... 110
7.5 Restricted Junior Payments........................................... 111
7.6 Financial Covenants.................................................. 112
7.7 Restriction on Fundamental Changes; Asset Sales...................... 115
7.8 Sales and Lease-Backs................................................ 117
7.9 Transactions with Shareholders and Affiliates........................ 117
7.10 Disposal of Subsidiary Stock......................................... 118
7.11 Conduct of Business.................................................. 118
7.12 Amendments or Waivers of Certain Related Agreements; Amendments of
Documents Relating to Subordinated Indebtedness; Designation of
"Designated Senior Indebtedness"; Preferred Stock.................... 118
7.13 Fiscal Year.......................................................... 119
SECTION 8.
EVENTS OF DEFAULT.......................... 119
8.1 Failure to Make Payments When Due.................................... 120
8.2 Default in Other Agreements.......................................... 120
8.3 Breach of Certain Covenants.......................................... 120
8.4 Breach of Warranty................................................... 120
8.5 Other Defaults Under Loan Documents.................................. 121
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................. 121
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc................... 121
8.8 Judgments and Attachments............................................ 122
8.9 Dissolution.......................................................... 122
8.10 Employee Benefit Plans............................................... 122
8.11 Change in Control.................................................... 122
8.12 Invalidity of Guaranties............................................. 123
8.13 Failure of Security.................................................. 123
8.14 Failure to Consummate Acquisition.................................... 123
8.15 Termination or Breach of Certain Transition Agreements............... 124
8.16 Conduct of Business By Holdings and MBW LLC.......................... 124
8.17 Default Under Subordination Provisions............................... 124
SECTION 9.
AGENTS................................ 125
9.1 Appointment.......................................................... 125
9.2 Powers; General Immunity............................................. 127
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness..................................................... 128
9.4 Right to Indemnity................................................... 128
9.5 Successor Agents and Swing Line Lender............................... 129
(iii)
Page
9.6 Collateral Documents................................................. 129
SECTION 10.
MISCELLANEOUS............................ 130
10.1 Assignments and Participations in Loans, Letters of Credit........... 130
10.2 Expenses............................................................. 133
10.3 Indemnity............................................................ 134
10.4 Set-Off; Security Interest in Deposit Accounts....................... 134
10.5 Ratable Sharing...................................................... 135
10.6 Amendments and Waivers............................................... 136
10.7 Independence of Covenants............................................ 137
10.8 Notices.............................................................. 138
10.9 Survival of Representations, Warranties and Agreements............... 138
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................ 138
10.11 Marshalling; Payments Set Aside...................................... 138
10.12 Severability......................................................... 139
10.13 Obligations Several; Independent Nature of Lenders' Rights........... 139
10.14 Headings............................................................. 139
10.15 Applicable Law....................................................... 139
10.16 Successors and Assigns............................................... 140
10.17 Consent to Jurisdiction and Service of Process....................... 140
10.18 Waiver of Jury Trial................................................. 141
10.19 Confidentiality...................................................... 141
10.20 Counterparts; Effectiveness.......................................... 142
Signature pages...................................................... S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF SUBSIDIARY GUARANTY
VIII FORM OF HOLDINGS GUARANTY
IX FORM OF PLEDGE AGREEMENT
X FORM OF SECURITY AGREEMENT
XI FORM OF PATENT AND TRADEMARK SECURITY AGREEMENT
XII FORM OF COMPLIANCE CERTIFICATE
XIII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
XIV FORM OF OPINION OF O'MELVENY & XXXXX LLP
XV FORM OF ASSIGNMENT AGREEMENT
XVI FORM OF PERMITTED SELLER NOTE
XVII FORM OF CERTIFICATE RE NON-BANK STATUS
XVIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIX FORM OF COLLATERAL ACCESS AGREEMENT
(v)
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES; LENDING
OFFICES
4.1C CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT
5.1 SUBSIDIARIES OF HOLDINGS
5.5B OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS
5.8 MATERIAL CONTRACTS
7.6E STIPULATED CONSOLIDATED EBITDA AND CONSOLIDATED CAPITAL
EXPENDITURES
(vi)
MBW FOODS INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 31, 1996 and entered into by
and among MBW FOODS INC. a Delaware corporation ("Company"), MBW HOLDINGS INC.,
a Delaware corporation ("Holdings"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), THE CHASE MANHATTAN BANK, as administrative agent
for Lenders (in such capacity, "Administrative Agent"), and CHASE SECURITIES
INC., as arranging agent (in such capacity, "Arranging Agent").
R E C I T A L S
WHEREAS, Holdings and Company, its direct Wholly Owned Subsidiary
(capitalized terms used in these Recitals without definition shall have the
respective meanings assigned in subsection 1.1 hereof), have been formed by the
MDC Entities and Dartford for the purpose of acquiring certain assets of Seller
relating exclusively to the manufacture and sale of pancake syrup and pancake
and waffle mix marketed under the Xxx. Xxxxxxxxxxx'x and Country Crock brand
names, and assuming certain liabilities in connection therewith (such assets and
liabilities being collectively the "Business"), on the terms set forth in that
certain Asset Purchase Agreement dated as of December 18, 1996, by and between
Company and Seller;
WHEREAS, on or before the Closing Date, (i) the MDC Entities, Dartford,
Fenway and the Management Investors will purchase all of the membership
interests of MBW Investors LLC, a Delaware limited liability company ("MBW
LLC"), for aggregate cash consideration of not less than $33,800,000, (ii) MBW
LLC will contribute to Holdings, as common equity, the consideration received by
MBW LLC from such sale of the membership interests of MBW LLC, and (iii)
Holdings will contribute to Company, as common equity, the consideration
received by Holdings from such equity contribution by MBW LLC;
WHEREAS, on or before the Closing Date, Company will borrow not less than
$50,000,000 in aggregate principal amount of Subordinated Bridge Loans;
WHEREAS, Company desires that Lenders extend certain credit facilities to
Company in an aggregate principal amount of $60,000,000 which, together with the
proceeds of the Subordinated Bridge Loans and the contribution by Holdings of
not less than $33,800,000 in equity to Company, will be used (i) to finance the
purchase price for the Business payable in connection with the Acquisition, (ii)
to pay Transaction Costs and (iii) to provide financing for
working capital and other general corporate purposes (including acquisitions) of
Company and its Subsidiaries;
WHEREAS, Holdings desires to guaranty, and Company desires that all of its
future Subsidiaries guaranty, all of the obligations of Company with respect to
the credit facilities provided by Lenders;
WHEREAS, Company desires to secure all of the Obligations and desires that
all of its future Subsidiaries secure their respective obligations under the
Subsidiary Guaranty, and Holdings desires to secure its obligations under its
Guaranty, by granting to Administrative Agent, for the benefit of Agents and
Lenders, (i) a first priority Lien on substantially all of their respective real
and personal property and (ii) a first priority pledge of all of the capital
stock of their respective direct Subsidiaries;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acquisition" means the transactions contemplated by the Acquisition
Agreement.
"Acquisition Agreement" means that certain Asset Purchase Agreement
dated as of December 18, 1996, by and between Company and Seller, as in
effect on the Closing Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Acquisition Revolving Loans" has the meaning assigned to that term
in subsection 2.5A.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date, the rate per annum obtained by dividing (i) the London
Interbank offered rate for deposits in U.S. Dollars for maturities
comparable to the Interest Period for which such Adjusted Eurodollar Rate
will apply as of approximately 11:00 A.M. (London time) on such Interest
Rate Determination Date as set forth on Telerate Page 3750 by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined
in Regulation D (or any successor category of liabilities under Regulation
D).
"Administrative Agent" means Chase, in its capacity as
Administrative Agent, and any successor to Chase in such capacity
appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in subsection
2.6C.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" means, individually, each of Administrative Agent and
Arranging Agent, and "Agents" means Administrative Agent and Arranging
Agent, collectively.
"Aggregate Amounts Due" has the meaning assigned to that term in
subsection 10.5.
"Agreement" means this Credit Agreement dated as of December 31,
1996, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"Anniversary" means each of the dates that are anniversaries of the
Closing Date.
"Applicable Base Rate Margin" means (i) with respect to the Term
Loans, 1.75% per annum, and (ii) with respect to the Revolving Loans,
1.25% per annum.
"Applicable Eurodollar Rate Margin" means (i) with respect to the
Term Loans, 3.00% per annum, and (ii) with respect to the Revolving Loans,
2.50% per annum.
"Applied Amount" has the meaning assigned to that term in subsection
2.4C(ii).
"Arranging Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Asset Sale" means the sale (including in any sale-leaseback
transaction) by Company or any of its Subsidiaries to any Person (other
than Company or any of its
Wholly Owned Subsidiaries) of (i) any of the stock of any of Company's
Subsidiaries, (ii) all or substantially all of the assets of any division
or line of business of Company or any of its Subsidiaries, or (iii) any
other assets other than sales of assets (including without limitation
inventory) in the ordinary course of business and sales of obsolete
equipment, excluding any such other assets to the extent that the
aggregate value of such assets sold in any single transaction or
transactions is equal to $2,000,000 or less in any one Fiscal Year.
"Assignment Agreement" means an assignment agreement in
substantially the form of Exhibit XV annexed hereto or in such other form
as may be approved by Administrative Agent.
"Assumption Agreement" means that certain Assignment and Assumption
Agreement dated as of December 31, 1996, by and between Seller and
Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate Loans" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"Business" has the meaning assigned to that term in the Recitals to
this Agreement.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or
required by law or other governmental action to close, and (ii) with
respect to all notices, determinations, fundings, issuances and payments
in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, any day that is a Business Day described in clause (i) above and
that is also (a) a day for trading by and between banks in Dollar deposits
in the London interbank market and (b) a day on which banking institutions
are open for business in London.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's Rating
Service ("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody's, issued by any Lender or any
commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia having unimpaired capital
and surplus of not less than $250,000,000 (each Lender and each such
commercial bank being herein called a "Cash Equivalent Bank"); and (v)
Eurodollar time deposits having a maturity of less than one year purchased
directly from any Cash Equivalent Bank (provided such deposit is with such
Cash Equivalent Bank or any other Cash Equivalent Bank).
"Cash Proceeds" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received by Company or any of its Subsidiaries from such Asset
Sale.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit XVII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"Chase" means The Chase Manhattan Bank and its successors,
including, without limitation, its successors by merger.
"Closing Date" means the date on or before December 31, 1996 on
which the initial Loans are made.
"Collateral" means all of the properties and assets (including
capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouse-
man or processor in possession of any Inventory of any Loan Party,
substantially in the form of Exhibit XIX annexed hereto with such changes
thereto as may be agreed to by Administrative Agent in the reasonable
exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by Company and Administrative Agent on
the Closing Date, substantially in the form of Exhibit XVIII annexed
hereto, pursuant to which Company may pledge cash to Administrative Agent
to secure the obligations of Company to reimburse Issuing Lenders for
payments made under one or more Letters of Credit as such Collateral
Account Agreement may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Collateral Documents" means the Pledge Agreement, the Security
Agreement, the Patent and Trademark Security Agreement, the Collateral
Account Agreement, the Mortgages and any other documents, instruments or
agreements delivered by any Loan Party pursuant to this Agreement or any
of the other Loan Documents in order to grant or perfect liens on any
assets of such Loan Party as security for the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Company" has the meaning assigned to that term in the introduction
to this Agreement.
"Company Common Stock" means the common stock of Company, par value
$0.01 per share.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit XII annexed hereto delivered to Administrative Agent by
Company pursuant to subsection 6.1(iv).
"Condemnation Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which
writing has been delivered to Administrative Agent), whether under the
terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of
"Landlord Consent and Estoppel," which interest, if a subleasehold or
sub-subleasehold interest, is not subject to any contrary restrictions
contained in a superior lease or sublease.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount paid or accrued by Holdings and its Subsidiaries for the
rental, lease, purchase (including by way of the acquisition of Securities
of a Person), construction or use of any property during such period, the
value or cost of which, in conformity with GAAP, would appear on the
consolidated balance sheet of Holdings and its Subsidiaries in the
category of "purchases of property, plant or equipment" at the end of such
period, excluding any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any
damage, loss, destruction or condemnation of such property, to the extent
such expenditure is made with insurance proceeds or condemnation awards
relating to any such damage, loss, destruction or condemnation; provided,
however, that Consolidated Capital Expenditures shall not include
expenditures up to an aggregate amount equal to the portion of the
purchase price for any Permitted Acquisition made pursuant to subsection
7.7(vii) that would otherwise be treated as a Consolidated Capital
Expenditure.
"Consolidated Cash Interest Coverage Ratio" means, for any period,
the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Cash Interest Expense for such period.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense payable in cash during such period.
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP.
"Consolidated EBITDA" means, for any period, (i) the sum of the
amounts for such period of (a) Consolidated Net Income, plus (b) to the
extent deducted in determining such Consolidated Net Income, (1)
Consolidated Interest Expense, (2) depreciation, (3) depletion, (4)
amortization, (5) all Federal, state, local and foreign income taxes, (6)
transaction fees paid to the MDC Entities and/or Dartford and/or Fenway in
connection with acquisitions made after the Closing Date, so long as such
transaction fees are paid in accordance with the terms of the MDC Advisory
Services
Agreement, the Dartford Management Agreement and the Fenway Agreement, (7)
non-recurring charges incurred prior to June 30, 1998 with respect to (A)
relocation of Company's assets, (B) the purchase of computers and
computer-related equipment and (C) transition related expenses in
connection with the foregoing, but only to the extent that such
non-recurring charges, together with all expenditures excluded from
Consolidated Capital Expenditures under clause (iii) of the definition of
Consolidated Fixed Charges, do not exceed $3,000,000 in the aggregate, (8)
all other non-cash items reducing Consolidated Net Income and (9) any
extraordinary and unusual losses, minus (ii) the sum of the amounts for
such period of (a) all other non-cash items increasing Consolidated Net
Income, plus (b) any extraordinary and unusual gains, all of the foregoing
as determined on a consolidated basis for Holdings and its Subsidiaries in
conformity with GAAP.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated EBITDA, (b) to the extent deducted from
Consolidated EBITDA by virtue of clause (ii)(b) of the definition thereof,
extraordinary and unusual cash gains, and (c) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts
for such period of (a) voluntary and scheduled cash repayments of
Consolidated Total Debt (excluding repayments of Revolving Loans except to
the extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments), (b) Consolidated Capital Expenditures
(net of any proceeds of any related financings with respect to such
expenditures), (c) expenditures made in connection with any Permitted
Acquisition pursuant to subsection 7.7(vii) (net of any proceeds of any
related financings with respect to such acquisitions), including without
limitation transaction fees paid in cash to the MDC Entities and/or
Dartford and/or Fenway in connection with such acquisitions, so long as
such transaction fees are paid in accordance with the terms of the MDC
Advisory Services Agreement, the Dartford Management Agreement and the
Fenway Agreement, (d) Consolidated Interest Expense, (e) to the extent
added back to Consolidated EBITDA by virtue of clause (i)(b)(9) of the
definition thereof, extraordinary and unusual cash losses, (f) to the
extent added back to Consolidated EBITDA by virtue of clause (i)(b)(7) of
the definition thereof, non-recurring charges paid in cash incurred prior
to June 30, 1998, and (g) the provision for current taxes based on income
of Holdings and its Subsidiaries and payable in cash with respect to such
period.
"Consolidated Fixed Charges" means, for any period, an amount equal
to the sum of the amounts for such period of (i) scheduled amortization of
Indebtedness of Holdings and its Subsidiaries (as reduced by prepayments
previously made), and discount or premium relating to any such
Indebtedness for such period, whether expensed or capitalized, (ii)
Consolidated Cash Interest Expense, (iii) Consolidated Capital
Expenditures (excluding expenditures which would otherwise be included in
Consolidated Capital Expenditures incurred prior to June 30, 1998 with
respect to (a) relocation of Company's assets, (b) the purchase of
computers and computer-related equipment and (c) transition
related expenses in connection with the foregoing, but only to the extent
that such expenditures, together with all non-recurring charges added back
to Consolidated EBITDA by virtue of clause (i)(b)(7) of the definition
thereof, do not exceed $3,000,000 in the aggregate), and (iv) taxes
actually paid in cash by Holdings or any of its Subsidiaries.
"Consolidated Interest Expense" means, for any period, the net
interest expense of Holdings and its Subsidiaries for such period (net of
any interest income of Holdings and its Subsidiaries during such period)
as determined on a consolidated basis in conformity with GAAP.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of
any Person in which any other Person (other than Holdings or any of the
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid in cash to Holdings or any
of its Subsidiaries by such Person during such period and (ii) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of its
Subsidiaries or the date such Person's assets are acquired by Company any
of its Subsidiaries.
"Consolidated Total Debt" means, as at any date of determination,
all outstanding Indebtedness of Holdings and its Subsidiaries as
determined on a consolidated basis in conformity with GAAP.
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such
period.
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Interest
Rate Agreements. Contingent Obligations shall include, without limitation,
(a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse
or sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise)
or (y) to maintain the solvency or any balance sheet item, level of income
or financial condition of another if, in the case of any agreement
described under subclauses (x) or (y) of this sentence, the primary
purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"Continuing Director" shall mean, as of any date of determination,
any member of the Board of Directors of Company who (i) was a member of
such Board of Directors on the Closing Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote
of the MDC Entities and/or Dartford and/or Fenway.
"Contractual Obligation" means, as applied to any Person, any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Co-Pack Agreement" means that certain Co-Pack Agreement dated as of
December 31, 1996, by and between Seller and Company, as in effect on the
Closing Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"CSI" means Chase Securities Inc. and its successors and assigns,
including, without limitation, its successors by merger.
"Dartford Management Agreement" means that certain Management
Services Agreement dated as of December 31, 1996, by and between Company
and Dartford, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Dartford" means Dartford Partnership L.L.C., a limited liability
company organized under the laws of the State of Delaware.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Eligible Assignee" means (i) (a) a commercial bank organized under
the laws of the United States or any state thereof; (b) a commercial bank
organized under the laws of any other country or a political subdivision
thereof; provided that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws
of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; (c) any other
entity which is an "accredited investor" (as defined in Regulation D under
the Securities Act) which extends credit or buys loans as one of its
businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies; and (d) any other financial
institution or fund (whether a corporation, partnership, trust or other
entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and has combined
capital and surplus or net assets of at least $100,000,000, in each case
(under clauses (a) through (d) above) that is reasonably acceptable to
Administrative Agent; and (ii) any Lender and any Affiliate of any Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is subject to ERISA and which is maintained
or contributed to by Company or any of its ERISA Affiliates.
"Employment Agreements" means, collectively, (i) that certain
Employment Agreement dated as of December 31, 1996, by and between Company
and Xxxxxx Xxxxxxx, and (ii) that certain Employment Agreement dated as of
December 31, 1996, by and between Company and Xxxx Xxxxxxx.
"Environmental Claim" means any written accusation, allegation,
notice of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage
to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in
each case relating to, resulting from or in connection with Hazardous
Materials and relating to Company, any
of its Subsidiaries, any of their respective Affiliates that are directly
or indirectly controlled by Company, or any Facility.
"Environmental Laws" means all laws, statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to
(i) environmental matters, including, without limitation, those relating
to fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, public health and safety, industrial hygiene or
protection of wetlands, in any manner applicable to Company or any of its
Subsidiaries or any of their respective properties, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water Pollution
Control Act ( 33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C.
ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
ss.136 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss. 651
et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. ss. 11001 et seq.), each as amended or supplemented, and any
analogous future or present local, state and federal statutes and
regulations promulgated pursuant thereto, each as in effect as of the date
of determination.
"Equity Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
from the issuance of any equity Securities of Holdings or Company after
the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) solely for
purposes of obligations under Section 412 of the Internal Revenue Code or
under the applicable sections set forth in Section 414(t)(2) of the
Internal Revenue Code, any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which
that Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with
respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation or with respect to which no penalty will be
assessed by the PBGC for failure to satisfy such notice requirements);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or not
waived in accordance with Section 412(d) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section
412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan
in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company or any of its ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such
Pension Plan resulting, in either case, in liability pursuant to Section
4063 or 4064 of ERISA, respectively; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan pursuant to Section 4042 of
ERISA; (vi) the imposition of liability on Company or any of its ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal by
Company or any of its ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan resulting in withdrawal liability pursuant to Section
4201 of ERISA, or the receipt by Company or any of its ERISA Affiliates of
written notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends
to terminate or has terminated under Section 4042 of ERISA or under
Section 4041A of ERISA if such termination would result in liability to
Company or any of its ERISA Affiliates; (viii) the imposition on Company
or any of its ERISA Affiliates of fines, penalties or taxes under Chapter
43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or (l)
or 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the failure
of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from
taxation under Section 501(a) of the Internal Revenue Code; or (x) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries (but
only as to portions of buildings actually leased or used) or any of their
respective predecessors or any of their respective Affiliates that are
directly or indirectly controlled by Company.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.
"Fenway" means Fenway Partners Capital Fund, L.P., a Delaware
limited partnership.
"Fenway Agreement" means that certain Advisory Agreement dated as of
December 31, 1996, by and between Company and Fenway, as in effect on the
Closing Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"FFDC Act" means the Federal Food, Drug and Cosmetic Act, as amended
from time to time, and any successor statute.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral and (ii)
such Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2A) to which such Collateral is
subject.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on the last Saturday in December of each calendar year.
"Fixed Charge Component" has the meaning assigned to that term in
subsection 7.6E(i).
"Flavor Supply Agreement" means that certain Flavor Supply Agreement
dated as of December 31, 1996, by and between Company and Quest, as in
effect on the Closing Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Funding and Payment Office" means the office of Administrative
Agent and Swing Line Lender located at One Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such offices of Administrative Agent or
any successor Administrative Agent specified by Administrative Agent or
such successor Administrative Agent in a written notice to Loan Parties
and Lenders).
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination and
specifically, terms used herein applicable to Company and its Subsidiaries
defined by reference to GAAP shall give effect to the subtraction of
minority interests.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"Guaranty" means, individually, each of the Holdings Guaranty, the
Subsidiary Guaranty and any other guaranty of the Obligations, and
"Guaranties" means the Holdings Guaranty, the Subsidiary Guaranty and each
other guaranty of the Obligations, collectively.
"Guarantors" means Holdings and the Subsidiary Guarantors.
"Hazardous Materials" means (i) any chemical, material or substance
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any applicable
Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development
or production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
asbestos in any form; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million;
(ix) pesticides; and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or
handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
"Holdings" has the meaning assigned to that term in the introduction
to this Agreement.
"Holdings Common Stock" means the common stock of Holdings, par
value $0.01 per share.
"Holdings Guaranty" means the Holdings Guaranty executed and
delivered by Holdings on the Closing Date, substantially in the form of
Exhibit VIII annexed hereto, as such Holdings Guaranty may thereafter be
amended, restated, supplemented or otherwise modified from time to time.
"Immaterial Subsidiaries" means, with respect to any Person, any
Subsidiary or Subsidiaries of such Person the assets of which constitute,
individually or in the aggregate, less than 5% of the total assets of such
Person and its Subsidiaries.
"Indebtedness" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money (other than accounts payable incurred in the ordinary
course of business and accrued expenses incurred in the ordinary course of
business), (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations
incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or
(b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. Obligations under Interest Rate Agreements constitute Contingent
Obligations and not Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Initial Period" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) 60 days
after the Closing Date and (ii) the date on which Arranging Agent notifies
Company that it has concluded its primary syndication of the Loans and the
Commitments.
"Insurance Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Intellectual Property" has the meaning assigned to that term in
subsection 5.5B.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each March 15, June 15, September 15 and December 15 of each year,
commencing on March 15, 1997 and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan;
provided that in the case of each Interest Period of longer than three
months, "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to hedge Company or any of its
Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for calculating
the Adjusted Eurodollar Rate, for purposes of determining the interest
rate in respect of an Interest Period. The Interest Rate Determination
Date in respect of calculating the Adjusted Eurodollar Rate shall be the
second Business Day prior to the first day of the related Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which
are then held by such Person for sale or lease, including raw materials
and work in process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a
Person that, prior to such purchase or acquisition, was a Wholly Owned
Subsidiary of Company), or (ii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Company or any of its Subsidiaries
to any other Person other than a Wholly Owned Subsidiary of Company,
including all indebtedness and accounts receivable acquired from that
other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business; provided, however,
that the term "Investment" shall not include (a) current trade and
customer accounts receivable for goods furnished or services rendered in
the ordinary course of business and payable in accordance with customary
trade terms, (b) advances and prepayments to suppliers for goods and
services in the ordinary course of business, (c) stock or other securities
acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due or owing to Company or any of its Subsidiaries
or as security for any such Indebtedness or claims, (d) Cash held in
Deposit Accounts with banks and trust companies (other than Lenders) not
exceeding $2,000,000 in aggregate amount, (e) Cash held in any Deposit
Account with a Lender and (f) shares in a mutual fund that invests solely
in Cash Equivalents. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"IP Collateral" means the Collateral under the Patent and Trademark
Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the
benefit of Administrative Agent, (i) that without any further consent of
such lessor or any further action on the part of the Loan Party holding
such Leasehold Property, such Leasehold Property may be encumbered
pursuant to a Mortgage and may be assigned to the purchaser at a
foreclosure sale or in a transfer in lieu of such a sale (and to a
subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property),
(ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative
Agent notice of such default and at least 30 days (or, if such default
cannot reasonably be cured by Administrative Agent within such period,
such longer period as may reasonably be required) to cure such default,
(iii) to the matters contained in a Collateral Access Agreement, and (iv)
to such other matters relating to such Leasehold Property as
Administrative Agent may reasonably request.
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise
requires, provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loans
(including any Revolving Loans made to pay Refunded Swing Line Loans or to
reimburse drawings under Letters of Credit) in accordance with subsection
2.1A(iii) or its portion of any unreimbursed drawing or payment under a
Letter of Credit in accordance with subsection 3.3C or (ii) a Lender
having notified Company and/or Administrative Agent in writing that it
does not intend to comply with its obligations under subsection 2.1 or
subsections 3.1C, 3.3B or 3.3C.
"Lending Office" means, as to any Lender, the office or offices of
such Lender specified as the "Lending Office" on Schedule 2.1, or such
other office or offices as such Lender may from time to time notify
Company and Administrative Agent.
"Letter of Credit" or "Letters of Credit" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding (whether or not the conditions to drawing thereunder have been
met) plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed by
Company (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B).
"Leverage Ratio" means, as of any date of determination, the ratio
of Consolidated Total Debt, as of the date of determination, to
Consolidated EBITDA, for the twelve-month period ending on the date of
determination, in each case calculated for Company and its Subsidiaries on
a consolidated basis in accordance with GAAP.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, fixed or floating charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" or "Loans" means, as the context requires, one or more of the
Term Loans, Revolving Loans and Swing Line Loans or any combination
thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing
Lender relating to, the Letters of Credit), the Holdings Guaranty, the
Subsidiary Guaranty, the Collateral Documents and any Interest Rate
Agreement entered into by Company with a Lender or an Affiliate of any
Lender.
"Loan Party" means, individually, each of Holdings, Company and any
Subsidiary Guarantors, and "Loan Parties" means Holdings, Company and each
Subsidiary Guarantor, collectively.
"Management Fees" means the fees payable by Company pursuant to the
MDC Advisory Services Agreement, the Dartford Management Agreement and the
Fenway
Agreement.
"Management Investors" shall mean such Persons other than the MDC
Entities, Dartford and Fenway as shall hold membership interests in MBW
LLC on or prior to the Closing Date, which Persons shall be reasonably
acceptable to Administrative Agent and Lenders.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Contract" means any of the Employment Agreements or any
other contract or other arrangement to which Holdings or any of its
Subsidiaries is a party (other than the Loan Documents) for which breach,
nonperformance, cancellation or failure to renew could have a Material
Adverse Effect.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects
of Company and its Subsidiaries, taken as a whole, (ii) the material
impairment of the ability of any Loan Party to perform the Obligations and
(iii) a material adverse effect upon the legality, validity, binding
effect or enforceability against a Loan Party of a Loan Document to which
it is a party; provided that Company's consummation of the Acquisition in
accordance with the terms of the Acquisition Agreement shall not be deemed
to have a Material Adverse Effect for purposes of subsection 5.4.
"Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 7.6D.
"MBW LLC" has the meaning assigned to that term in the Recitals to
this Agreement.
"MBW LLC Agreement" means that certain Amended and Restated Limited
Liability Company Agreement dated as of December 31, 1996, by and among
the MDC Entities, Dartford, Fenway and the Management Investors, as such
agreement may be amended, restated, supplemented or otherwise modified
from time to time.
"MDC Advisory Services Agreement" means that certain Advisory
Services Agreement dated as of December 31, 1996, by and between Company
and MDC Management Company III, L.P., as in effect on the Closing Date and
as such agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12A.
"MDC Entities" means XxXxxx De Leeuw & Co. III, L.P., a California
limited partnership, XxXxxx De Leeuw & Co. Offshore (Europe) III, L.P., a
Bermuda limited partnership, XxXxxx De Leeuw & Co. III (Asia), L.P., a
Bermuda limited partnership and Gamma Fund LLC, a California limited
liability company.
"Mortgage" means any mortgage or legal charge (whether designated as
a deed of trust or a mortgage or by any similar title) granted by Company
or any of its Subsidiaries (or, at Administrative Agent's option, an
amendment to an existing Mortgage, in form satisfactory to Administrative
Agent, adding such Mortgaged Property to the Real Property Assets
encumbered by an existing Mortgage) in any Real Property Asset to secure
the Obligations, as such mortgage or legal charge may be amended,
restated, supplemented or otherwise modified from time to time, and
"Mortgages" means all such instruments collectively.
"Mortgaged Property" has the meaning assigned to that term in
subsection 6.10B.
"Mortgage Policy" has the meaning assigned to that term in
subsection 6.10B(iv).
"Multiemployer Plan" means a "multiemployer plan", as defined in
Section 4001(a)(3) of ERISA which is subject to Title IV of ERISA, to
which Company or any of its ERISA Affiliates is contributing or to which
Company or any of its ERISA Affiliates has an obligation to contribute.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale
including, without limitation, (i) income taxes reasonably estimated to be
actually payable as a result of such Asset Sale within one year of the
date of receipt of such Cash Proceeds, (ii) transfer, sales, use and other
taxes payable in connection with such Asset Sale, (iii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale, and (iv) broker's
commissions and reasonable fees and expenses of counsel, accountants and
other professional advisors in connection with such Asset Sale.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii).
"Notes" means one or more of the Term Notes, Revolving Notes or
Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice in the form of Exhibit I
annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the form
of Exhibit III annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts
drawn under Letters of Credit or payments for early termination of
Interest Rate Agreements, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer), its president, its chief financial officer or a
vice president; provided that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer making or giving
such Officer's Certificate has read such condition and any definitions or
other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signer he or she has made or has
caused to be made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signer, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) that
is not a Capital Lease other than any such lease under which that Person
is the lessor.
"Patent and Trademark Security Agreement" means the Patent and
Trademark Security Agreement entered into by and among Company, the
Subsidiary Guarantors and Administrative Agent dated as of the date
hereof, substantially in the form of Exhibit XI annexed hereto, as such
Patent and Trademark Security Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"Patent License Agreement" means that certain Patent License
Agreement dated as of December 31, 1996, by and among Seller, Unilever PLC
and Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA.
"Permitted Acquisition" means an acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(vii).
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA) incurred in the ordinary course
of business for sums not yet delinquent or being contested in good faith,
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of Company or
any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under any
Capital Lease permitted by subsection 7.1(iii) or any operating lease not
prohibited by this Agreement, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) deposits in the ordinary course of business to secure
liabilities to insurance carriers, lessors, utilities and other service
providers; and
(xi) bankers liens and rights of setoff with respect to customary
depository arrangements entered into in the ordinary course of business.
"Permitted Seller Note" means a promissory note substantially in the
form of Exhibit XVI annexed hereto representing any Indebtedness of
Company incurred in connection with any Permitted Acquisition payable to
the seller in connection therewith, as such note may be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12B; provided that no Permitted Seller Note
shall (i) be guarantied by any Subsidiary of Company or secured by any
property of Company or any of its Subsidiaries or (ii) bear cash interest
at a rate in excess of 12% per annum; and provided further, that no
Permitted Seller Note shall provide for any prepayment or repayment of all
or any portion of the principal thereof prior to the date of the final
scheduled installment of principal of any of the Loans.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint
stock companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
"Pledge Agreement" means that certain Pledge Agreement by and among
Company, Holdings, the Subsidiary Guarantors and Administrative Agent
dated as of the date hereof and substantially in the form of Exhibit IX
annexed hereto, as such Pledge Agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"Pledged Collateral" means the "Pledged Collateral" as defined in
the Pledge Agreement.
"Potential Event of Default" means a condition or event that, after
notice or after any applicable grace period has lapsed, or both, would
constitute an Event of Default.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime commercial lending rate in effect
at its principal office in New York City. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. Chase or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime
Rate.
"Proceedings" has the meaning assigned to that term in subsection
6.1(x).
"Pro Forma Calculation Period" has the meaning assigned to that term
in subsection 7.6E(i).
"Projections" has the meaning assigned to that term in subsection
5.3B.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the
Term Loan of any Lender, the percentage obtained by dividing (x) the Term
Loan Exposure of that Lender by (y) the aggregate Term Loan Exposure of
all Lenders; (ii) with respect to all payments, computations and other
matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued by any Lender or any
participations purchased by any Lender therein or in any Swing Line Loans,
the percentage obtained by dividing (x) the Revolving Loan Exposure of
that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders;
and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure of
that Lender plus the Revolving Loan Exposure of that Lender by (y) the sum
of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders; in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection
10.1. The initial Pro Rata Share of each Lender for purposes of each of
clauses (i), (ii) and (iii) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect
Liens on any IP Collateral.
"Pure Food and Drug Laws" means the FFDC Act and the pure food and
drug laws of each of the states of the United States into which products
of the Business are or have been shipped.
"Quest" means Quest International Flavors & Food Ingredients
Company.
"Quest Agreements" means, collectively, (i) that certain Flavor
Escrow Agreement dated as of December 31, 1996, by and among Quest, the
escrow agent named therein and Company, as in effect on the Closing Date
and as such agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12A, and (ii) the Flavor Supply Agreement.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Administrative Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease
evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise
in form reasonably satisfactory to Administrative Agent.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Shares" means, with respect to any Person, shares of
such Person required to be issued as qualifying shares to directors or
persons similarly situated or shares issued to Persons other than Company
or a Wholly Owned Subsidiary of Company in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the
Board of Directors of such Person, so long as such shares do not exceed
one percent of the total outstanding shares of equity such Person and any
owners of such shares irrevocably covenant with Company to remit to
Company or waive any dividends or distributions paid or payable in respect
of such shares.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means the Subordinated Bridge Loan Agreement,
the Subordinated Bridge Notes, the other Subordinated Bridge Loan
Documents, the Subordinated Exchange Note Indenture, the Subordinated
Exchange Notes, the other Subordinated Exchange Note Documents, the
Warrant Agreement, the Warrant Escrow Agreement, the Warrants, the
Acquisition Agreement, the Assumption Agreement, the MDC Advisory Services
Agreement, the Dartford Management Agreement, the Fenway Agreement and the
Transition Agreements.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing
any Hazardous Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Requisite Lenders" means Non-Defaulting Lenders having or holding
not less than 51% of the sum of the aggregate Term Loan Exposure of all
Non-Defaulting Lenders plus the aggregate Revolving Loan Exposure of all
Non-Defaulting Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii)
any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of stock of Holdings or Company now or hereafter outstanding, (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock
of Holdings or Company now or hereafter outstanding, and (iv) any payment
or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii) and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means December 15,
2001.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (net of any participations purchased by other
Lenders in such Letters of Credit) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit plus (d)
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans plus (e) in the case of Swing Line Lender,
the sum of the aggregate outstanding principal amount of all Swing Line
Loans (in each case net of any participations therein purchased by other
Lenders).
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(b) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving Loan
Commitment and Revolving Loans of any Lender,
in each case substantially in the form of Exhibit V annexed hereto, as
they may be amended, restated, supplemented or otherwise modified from
time to time.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" means the Security Agreement entered into by
and among Company, Holdings, the Subsidiary Guarantors and Administrative
Agent dated as of the date hereof and substantially in the form of Exhibit
X annexed hereto, as such Security Agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"Seller" means Conopco, Inc., a New York corporation, doing business
as Van den Xxxxx Foods Company.
"Shared Technology License Agreement" means that certain Shared
Technology License Agreement dated as of December 31, 1996, by and between
Seller and Company, as in effect on the Closing Date and as such agreement
may thereafter be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.12A.
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (c) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (ii) such Person is "solvent" within
the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Company or any of its Subsidiaries, (ii) the
obligations of third party insurers of Company or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third party
insurers, (iii) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (iv) such other obligations of Company and its
Subsidiaries as may be reasonably acceptable to Administrative Agent;
provided that Standby Letters of Credit may not be issued for the purpose
of supporting (a) trade payables or (b) Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy
Code).
"Subordinated Bridge Loan Agreement" means that certain Senior
Subordinated Credit Agreement dated as of December 31, 1996 by and between
Company, the financial institutions listed therein as lenders and Chase,
as agent for the lenders, pursuant to which the Subordinated Bridge Loans
are made, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12B.
"Subordinated Bridge Loan Documents" means the Subordinated Bridge
Notes, the Subordinated Bridge Loan Agreement, the Subordinated Bridge
Loan Guaranties and each other document executed in connection with the
Subordinated Bridge Loans, as each such document may be amended, restated,
supplemented or otherwise modified from time
to time to the extent permitted by subsection 7.12B.
"Subordinated Bridge Loan Guaranties" means, collectively, each of
the guaranties of Company's obligations with respect to the Subordinated
Bridge Loans executed by certain Subsidiaries of Company from time to
time, in the form of Exhibit B to the Subordinated Bridge Loan Agreement,
in each case with such changes thereto when executed as are permitted
under subsection 7.12B and as each such guaranty may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12B.
"Subordinated Bridge Loans" means the $50,000,000 in initial
aggregate principal amount of Indebtedness in respect of "Initial Loans"
(as such term is defined in the Subordinated Bridge Loan Agreement)
incurred by Company pursuant to the Subordinated Bridge Loan Agreement,
and shall include any "Term Loans" (as such term is defined in the
Subordinated Bridge Loan Agreement) into which such Initial Loans are
converted.
"Subordinated Bridge Notes" means the promissory notes of Company
issued pursuant to the Subordinated Bridge Loan Agreement and evidencing
the Subordinated Bridge Loans, as such notes may be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12B.
"Subordinated Exchange Note Documents" means the Subordinated
Exchange Note Indenture, the Subordinated Exchange Notes and each other
document executed in connection with the Subordinated Exchange Notes, as
each such document may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12B.
"Subordinated Exchange Note Indenture" means the indenture pursuant
to which the Subordinated Exchange Notes are issued, in the form delivered
to Agents and Lenders on or prior to the Closing Date, with such changes
thereto when executed as are permitted under subsection 7.12B and as such
indenture may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12B.
"Subordinated Exchange Notes" means the Increasing Rate Subordinated
Notes due 2006 of Company issued pursuant to the Subordinated Exchange
Note Indenture in exchange for all or any portion of the Subordinated
Bridge Notes, in the form delivered to Agents and Lenders on or prior to
the Closing Date, with such changes thereto when executed as are permitted
under subsection 7.12B and as such notes may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 7.12B.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
under the Subordinated Bridge Loan Documents and the Subordinated Exchange
Note Documents, (ii) any Indebtedness permitted under subsection 7.1(vi),
(iii) the Indebtedness of Company evidenced by any Permitted Seller Notes,
and (iv) any other Indebtedness of Company or any of its Subsidiaries
subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in
form and substance satisfactory to Administrative Agent and Requisite
Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means any Subsidiary of Company that becomes
party to the Subsidiary Guaranty at any time after the Closing Date
pursuant to subsection 6.9.
"Subsidiary Guaranty" means the Subsidiary Guaranty, substantially
in the form of Exhibit VII annexed hereto, executed and delivered by each
Subsidiary Guarantor
from time to time after the Closing Date pursuant to subsection 6.9, as
such Subsidiary Guaranty may be amended, restated, supplemented or
otherwise modified from time to time.
"Subsidiary Security Agreements" has the meaning assigned to that
term in subsection 6.9.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 9.1B.
"Swing Line Lender" means Chase, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender
pursuant to subsection 2.1A(iii).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any
promissory note issued by Company to any successor Administrative Agent
and Swing Line Lender pursuant to the last sentence of subsection 9.5B, in
each case substantially in the form of Exhibit VI annexed hereto, as it
may be amended, restated, supplemented or otherwise modified from time to
time.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person's principal office (and/or, in the
case of a Lender, its relevant Lending Office) is located or in which that
Person is deemed to be doing business on all or part of the net income,
profits or gains of that Person (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise).
"Term Loan Commitment" means the commitment of a Lender to make a
Term Loan to Company pursuant to subsection 2.1A(i), and "Term Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Term Loan Conversion" means the occurrence of the events described
in subsection 2.1A(iv) on the Term Loan Conversion Date.
"Term Loan Conversion Date" means the date on or prior to the first
Anniversary on which Company repays all Indebtedness with respect to the
Subordinated Bridge Loans with the proceeds of Indebtedness permitted
under subsection 7.1(vi). Notwithstanding anything herein to the contrary,
the Term Loan Conversion Date and the Term Loan Conversion may not occur
after the first Anniversary.
"Term Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term
Loans, the outstanding principal amount of the Term Loan of that Lender.
"Term Loans" means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i).
"Term Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(a) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Term Loan
Commitments or Term Loans of any Lenders, in each case substantially in
the form of Exhibit IV annexed hereto, as they may be amended, restated,
supplemented or otherwise modified from time to time.
"Title Company" means one or more title insurance companies
reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable by
Company and its Subsidiaries on or before the Closing Date in connection
with the transactions contemplated hereby and by the Related Agreements.
"Transition Agreements" means, collectively, (i) that certain
License Agreement dated as of December 31, 1996, by and between Seller and
Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A; (ii) the
Shared Technology License Agreement; (iii) the Transition Services
Agreement; (iv) the Co-Pack Agreement; (v) the Patent License Agreement;
and (vi) the Quest Agreements.
"Transition Services Agreement" means that certain Transition
Services Agreement dated as of December 31, 1996, by and between Seller
and Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Unfunded Current Liability" means, with respect to any Pension
Plan, the amount, if any, by which the actuarial present value of the
accumulated plan benefits under such Pension Plan as of the close of its
most recent plan year exceeds the fair market value of the assets
allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by such Pension Plan's actuary in the most recent annual
valuation of such Pension Plan.
"Warrant Agreement" means that certain Warrant Agreement dated as of
December 31, 1996, by and between Holdings and ChaseMellon Shareholder
Services L.L.C., pursuant to which the Warrants are issued, as in effect
on the Closing Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 7.12A.
"Warrant Escrow Agreement" means that certain Warrant Escrow
Agreement dated as of December 31, 1996, by and between Holdings and
Chase, as escrow agent, as in effect on the Closing Date and as such
agreement may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12A.
"Warrants" means the warrants issued on the Closing Date by Holdings
pursuant to the Warrant Agreement to be sold to the purchasers of
securities representing Indebtedness permitted under subsection 7.1(vi),
as in effect on the Closing Date and as such warrants may be thereafter
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than Regulatory Shares) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries
of such Person or by such Person and one or more Wholly Owned Subsidiaries
of such Person.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders
pursuant to clauses (i), (ii), (iii) and (xiii) of subsection 6.1 shall be
prepared in accordance with GAAP (except, with respect to interim financial
statements, normal year-end audit adjustments and the absence of explanatory
footnotes) as in effect at the time of such preparation (and delivered together
with the reconciliation statements provided for in subsection 6.1(v)).
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to in subsection
5.3A.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes", "including" and similar terms used in any Loan
Document shall be construed as if followed by the words "without limitation".
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Loan Parties set forth
herein and in the other Loan Documents, each Lender hereby severally agrees to
make the Loans described in subsections 2.1A(i) and 2.1A(ii) and Swing Line
Lender hereby agrees to make the Swing Line Loans as described in subsection
2.1A(iii).
(i) Term Loans. Each Lender severally agrees to lend to Company on
the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the Term Loan Commitments to be used for the purposes
identified in subsection 2.5A. The amount of each Lender's Term Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate amount of the Term Loan Commitments is $15,000,000;
provided that the Term Loan Commitments of Lenders shall be adjusted to
give effect to any assignments of the Term Loan Commitments pursuant to
subsection 10.1B. Each Lender's Term Loan Commitment shall expire
immediately and without further action on March 31, 1997 if the Term Loans
and the Acquisition Revolving Loans are not made on or before that date.
Company may make only one borrowing under the Term Loan Commitments.
Amounts borrowed under this subsection 2.1A(i) and subsequently repaid or
prepaid may not be reborrowed; provided, however, that the foregoing shall
not prevent reborrowing under Revolving Loan Commitments created pursuant
to the Term Loan Conversion.
(ii) Revolving Loans. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
Company from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount which shall not exceed its Pro Rata Share of the aggregate amount
of the Revolving Loan Commitments, to be used for the purposes identified
in subsection 2.5B. The original amount of each Lender's Revolving Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate original amount of the Revolving Loan Commitments is
$45,000,000; provided that the Revolving Loan Commitments of Lenders shall
be adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B; provided further, that the
amount of the Revolving Loan Commitments shall be reduced from time to
time by the amount of any reductions thereto made pursuant to subsections
2.4A(ii) and 2.4B; and provided further, that the amount of the Revolving
Loan Commitments shall be increased in the event of the Term Loan
Conversion. Each Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving Loans and all
other amounts owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than that date;
provided that each Lender's Revolving Loan Commitment shall expire
immediately and without further action on March 31, 1997 if the Term Loans
and the Acquisition Revolving Loans are not made on or before that date.
Amounts borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination
Date.
Notwithstanding anything contained herein to the contrary, in no
event shall the Total Utilization of Revolving Loan Commitments at any
time exceed the Revolving Loan Commitments then in effect.
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum aggregate
amount of all Swing Line Loans outstanding from time to time, to make a
portion of the Revolving Loan Commitments available to Company from time
to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date by making Base Rate Loans as
Swing Line Loans to Company in an aggregate amount not to exceed the
amount of the Swing Line Loan Commitment, to be used for the purposes
identified in subsection 2.5B, notwithstanding the fact that such Swing
Line Loans, when aggregated with the sum of Swing Line Lender's
outstanding Revolving Loans and Swing Line Lender's Pro Rata Share of the
Letter of Credit Usage then in effect, may exceed Swing Line Lender's
Revolving Loan Commitment. The original amount of the Swing Line Loan
Commitment is $2,000,000; provided that the amounts of the Swing Line Loan
Commitment are subject to reduction as provided in clause (b) of the next
paragraph. The Swing Line Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Swing Line Loans and all other
amounts owed hereunder with respect to the Swing Line Loans shall be paid
in full no later than that
date; provided that the Swing Line Loan Commitment shall expire
immediately and without further action on March 31, 1997 if the Term Loans
and the Acquisition Revolving Loans are not made on or before that date.
Amounts borrowed under this subsection 2.1A(iii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination
Date.
Notwithstanding anything contained herein to the contrary, the Swing
Line Loans, and the Swing Line Loan Commitment shall be subject to the
following limitations in the amounts indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then
in effect;
(b) any reduction of the Revolving Loan Commitments made
pursuant to subsection 2.4B which reduces the aggregate Revolving
Loan Commitments to an amount less than the then current sum of the
Swing Line Loan Commitment shall result in an automatic
corresponding pro rata reduction of the Swing Line Loan Commitment
such that the sum thereof equals the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part
of Company, Administrative Agent or Swing Line Lender.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 12:00 Noon (New York time)
at least one Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by
Company) requesting Lenders to make Revolving Loans that are Base Rate
Loans to Company on such Funding Date in an amount equal to the amount of
such Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the
date such notice is given which Swing Line Lender requests Lenders to
prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by Lenders
other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and applied
to repay a corresponding portion of the Refunded Swing Line Loans and (ii)
on the day such Revolving Loans are made, Swing Line Lender's Pro Rata
Share of the Refunded Swing Line Loans shall be deemed to be paid with the
proceeds of a Revolving Loan made by Swing Line Lender to Company, and
such portion of the Swing Line Loans deemed to be so paid, shall no longer
be outstanding as Swing Line Loans and shall no longer be due under the
Swing Line Note of Swing Line Lender but shall instead constitute part of
Swing Line Lender's outstanding Revolving Loans to Company and shall be
due under the Revolving Note issued by Company to Swing Line Lender.
Company hereby authorizes each of Administrative Agent and Swing Line
Lender to charge Company's accounts with Administrative Agent and Swing
Line Lender (up to the
amount available in each such account) in order to immediately pay Swing
Line Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Lenders, including the Revolving
Loan deemed to be made by Swing Line Lender, are not sufficient to repay
in full the Refunded Swing Line Loans. If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be recovered by or
on behalf of Company from Swing Line Lender in bankruptcy, by assignment
for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Lenders in the manner
contemplated by subsection 10.5.
If for any reason Revolving Loans are not made pursuant to this
subsection 2.1A(iii) in an amount sufficient to repay any amounts owed to
Swing Line Lender in respect of any outstanding Swing Line Loans on or
before the third Business Day after demand for payment thereof by Swing
Line Lender, each Lender shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans, and in an
amount equal to its Pro Rata Share of the applicable unpaid amount
together with accrued interest thereon. Upon one Business Day's notice
from Swing Line Lender, each Lender shall deliver to Swing Line Lender an
amount in equal to its respective participation in the applicable unpaid
amount in same day funds at the Funding and Payment Office. In order to
evidence such participation each Lender agrees to enter into a
participation agreement at the request of Swing Line Lender in form and
substance satisfactory to Swing Line Lender. In the event any Lender fails
to make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by Swing Line Lender for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary, (i) each
Lender's obligation to make Revolving Loans for the purpose of repaying
any Refunded Swing Line Loans pursuant to the second preceding paragraph
and each Lender's obligation to purchase a participation in any unpaid
Swing Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (a) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against Swing Line
Lender, Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event of
Default; (c) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing; provided
that no Lender shall have any such obligation unless (x) Swing Line Lender
believed in good faith that all conditions under Section 4 to the making
of the applicable Refunded Swing Line Loans or other unpaid Swing Line
Loans, were satisfied at the time such Refunded
Swing Line Loans or unpaid Swing Line Loans were made, or (y) such Lender
had actual knowledge, by receipt of any notices required to be delivered
to Lenders pursuant to subsection 6.1(ix) or otherwise, that any such
condition under Section 4 had not been satisfied and such Lender failed to
notify Swing Line Lender and Administrative Agent in writing that it had
no obligation to make Revolving Loans until such condition was satisfied
(any such notice to be effective as of the date of receipt thereof by
Swing Line Lender and Administrative Agent), or (z) the satisfaction of
any such condition under Section 4 not satisfied had been waived by
Requisite Lenders prior to or at the time such Refunded Swing Line Loans
or other unpaid Swing Line Loans were made; and (ii) Swing Line Lender
shall not be obligated to make any Swing Line Loans if it has elected not
to do so after the occurrence and during the continuation of a Potential
Event of Default or Event of Default.
(iv) Term Loan Conversion. On the Term Loan Conversion Date, without
further action by Company, Administrative Agent or Lenders, (a) the
Revolving Loan Commitments then in effect shall be increased by
$15,000,000, (b) each Lender having an outstanding Term Loan immediately
prior to such date shall have a Revolving Loan Commitment and Revolving
Loan Exposure equal to the product of (1) such Lender's Pro Rata Share
with respect to Term Loans immediately prior to such date multiplied by
(2) $15,000,000, (c) all outstanding Term Loans shall become Revolving
Loans and all such Revolving Loans, together with all other Revolving
Loans, shall be reallocated based on the assumption that Company shall, as
of the opening of business on the Term Loan Conversion Date, have repaid
all such Loans then outstanding and immediately thereafter reborrowed
Revolving Loans in the same respective principal amounts from Lenders in
accordance with their respective Pro Rata Shares as in effect immediately
after giving effect to clauses (a) and (b) of this subsection, and (d) the
Term Notes shall be of no further force and effect. Based on such assumed
reallocation, Administrative Agent shall advise each Lender as to the net
amount of payments to be received by, or Loans to be advanced by, such
Lender on the Term Loan Conversion Date. In the event that the foregoing
reallocation of the Loans shall require prepayment of any portion of a
Eurodollar Rate Loan of a Lender on a date that is not the last day of an
Interest Period applicable to such Loan, Company shall pay compensation to
such Lender in accordance with subsection 2.6D.
(v) Issuance of Notes Upon Term Loan Conversion. On or as soon as
practicable after the Term Loan Conversion Date, (a) each Lender shall
deliver any Term Notes and Revolving Notes issued to it hereunder, marked
to show their cancellation, to Company, and (b) Company shall execute and
deliver to each Lender (or to Administrative Agent for such Lender) a
Revolving Note substantially in the form of Exhibit V annexed hereto to
evidence that Lender's Revolving Loans, in the principal amount of that
Lender's new Revolving Loan Commitment and with other appropriate
insertions.
B. Borrowing Mechanics. Term Loans or Revolving Loans (including any such
Loans made as Eurodollar Rate Loans with a particular Interest Period) made on
any Funding
Date (other than Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded Swing
Line Loans or Revolving Loans made pursuant to subsection 3.3B for the purpose
of reimbursing any Issuing Lender for the amount of a drawing or payment under a
Letter of Credit issued by it) shall be in an aggregate minimum amount of
$500,000 and integral multiples of $250,000 in excess of that amount. Swing Line
Loans made on any Funding Date shall be in an aggregate minimum amount of
$250,000 and integral multiples of $100,000 in excess of that amount. Whenever
Company desires that Lenders make Term Loans or Revolving Loans it shall deliver
to Administrative Agent on behalf of Company a Notice of Borrowing no later than
12:00 Noon (New York time), at least three Business Days in advance of the
proposed Funding Date in the case of a Eurodollar Rate Loan, or at least one
Business Day in advance of the proposed Funding Date in the case of a Base Rate
Loan. Whenever Company desires that Swing Line Lender make a Swing Line Loan, it
shall deliver to Administrative Agent a Notice of Borrowing no later than 12:00
Noon (New York time) on the proposed Funding Date. The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount and type of Loans requested, (iii) in the case of Swing Line Loans, that
such Loans shall be Base Rate Loans, (iv) in the case of any Loans other than
Swing Line Loans, whether such Loans shall be Base Rate Loans or Eurodollar Rate
Loans, and (v) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor. Term Loans and Revolving
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing are no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Term Loans and all Revolving Loans under
this Agreement shall be made by Lenders simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing and of the amount of such
Lender's Pro Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to Administrative
Agent not later than 12:00 Noon (New York time) on the applicable Funding Date,
and Swing Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date, in each case in same day funds, at the Funding and Payment Office.
Except as provided in subsection 2.1A(iii) or subsection 3.3B with respect to
Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any
Issuing Lender for the amount of an honored drawing or payment under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.1 (in the case of Loans made on the Closing Date) and
4.2 (in the case of all Loans), Administrative Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds equal to the proceeds of all such Loans received by
Administrative Agent from Lenders or Swing Line Lender, as the case may be, to
be credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior
to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate applicable to such Loan. Nothing in this subsection 2.1C shall be deemed to
relieve any Lender from its obligation to fulfill its Commitments hereunder or
to prejudice any rights that Company may have against any Lender as a result of
any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at the address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and the outstanding Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
outstanding Loans of each Lender. Any such recordation shall be conclusive
and binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan
made by it and each payment in respect thereof. Any such recordation shall
be prima facie evidence of the amount of such Loans; provided that failure
to make any such recordation, or any error in such recordation, shall not
affect Company's Obligations in respect of the applicable Loans; and
provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register shall
govern, absent manifest error.
(iv) Company, Agents and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any Commitment or Loan shall be
effective, in each case unless an until an Assignment Agreement effecting
the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates Chase, and any financial institution
serving as a successor Administrative Agent, to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Chase
serves in such capacity, Chase and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 10.3.
E. Notes. Company shall execute and deliver on the Closing Date (i) to
each Lender (or to Administrative Agent for that Lender) (a) a Term Note
substantially in the form of Exhibit IV annexed hereto, to evidence that
Lender's Term Loans in the principal amount of that Lender's Term Loans and with
other appropriate insertions, and (b) a Revolving Note substantially in the form
of Exhibit V annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (ii) to Swing Line Lender, a Swing Line Note
substantially in the form of Exhibit VI annexed hereto to evidence Swing Line
Lender's Swing Line Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions. The Notes and the Obligations
evidenced thereby shall be governed by, subject to and benefit from all of the
terms and conditions of this Agreement and the other Loan Documents and shall be
guarantied and/or secured by the Collateral as provided in the Loan Documents.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate, as the case may be. Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate. The applicable
basis for determining the rate of interest with respect to any Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis for determining the
interest rate with respect to any Term Loan or any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day any Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Term Loans and
the Revolving Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
Applicable Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at the sum of the Base Rate plus the
Applicable Base Rate Margin with respect to Revolving Loans.
B. Interest Periods. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one-, two-, threeor six-month period;
provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Term Loans
shall extend beyond December 15, 2002 and no Interest Period with respect
to any portion of the Revolving Loans shall extend beyond the Revolving
Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the Term Loans unless the sum of (a) the
aggregate principal amount of Term Loans that are Base Rate Loans plus (b)
the aggregate principal amount of Term Loans that are Eurodollar Rate
Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the Term Loans on such
date;
(vii) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a permanent
reduction of the Revolving Loan Commitments is scheduled to occur unless
the sum of (a) the aggregate principal amount of Revolving Loans that are
Base Rate Loans plus (b) the aggregate principal amount of
Revolving Loans that are Eurodollar Rate Loans with Interest Periods
expiring on or before such date plus (c) the excess of the Revolving Loan
Commitments then in effect over the aggregate principal amount of
Revolving Loans then outstanding equals or exceeds the permanent reduction
of the Revolving Loan Commitments that is scheduled to occur on such date;
(viii) Company may not select an Interest Period of longer than two
months prior to the end of the Initial Period;
(ix) there shall be no more than ten (10) Interest Periods
outstanding at any time; and
(x) in the event Company fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event that any Swing Line Loans, any Revolving
Loans or any Term Loans that are Base Rate Loans are prepaid pursuant to
subsection 2.4B(i), interest accrued on such Swing Line Loans, Revolving Loans
or Term Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans or Revolving Loans equal to $500,000 and integral
multiples of $250,000 in excess of that amount from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $500,000 and integral multiples of $250,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar
Rate Loan, the requested Interest Period, and (v) in the case of a conversion
to, or a continuation of, a Eurodollar Rate Loan, that no Potential Event of
Default or Event of Default has occurred and is continuing. In lieu of
delivering the above-described Notice of Conversion/Continuation, Company may
give Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code, or other applicable bankruptcy or insolvency laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Revolving Loans bearing interest at a rate determined by reference to the Base
Rate); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate equal to 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans that are Term Loans or Revolving Loans, as applicable. Payment
or acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of any Agent or Lender.
F. Computation of Interest. Interest on Loans shall be computed on the
basis of a 360-day year and for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender having a Revolving Loan Commitment, in proportion to
that Lender's Pro Rata Share of the Revolving Loan Commitments, commitment fees
for the period from and including the Closing Date to and excluding the
Revolving Loan Commitment Termination Date equal to the average of the daily
excess of the Revolving Loan Commitments over the sum of (i) the aggregate
principal amount of Revolving Loans outstanding (but not any Swing Line Loans
outstanding) plus the Letter of Credit Usage multiplied by (ii) 1/2 of 1% per
annum. All such commitment fees shall be calculated on the basis of a 360-day
year and the actual number of days elapsed and shall be payable quarterly in
arrears on March 15, June 15, September 15 and December 15 of each year,
commencing on March 15, 1997, and on the Revolving Loan Commitment Termination
Date.
B. Other Fees. Company agrees to pay to Agents such other fees in the
amounts and at the times separately agreed upon between Company and the
applicable Agents.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments under Guaranties.
A. Scheduled Payments of Term Loans and Scheduled Reductions of
Revolving Loan Commitments.
(i) Scheduled Payments of Term Loans. Company shall make principal
payments on the Term Loans in installments on the dates and in the amounts
set forth below:
===============================================================
SCHEDULED REPAYMENT
DATE OF TERM LOANS
===============================================================
March 15, 1997 $250,000
June 15, 1997 $250,000
September 15, 1997 $250,000
December 15, 1997 $250,000
===============================================================
SCHEDULED REPAYMENT
DATE OF TERM LOANS
===============================================================
March 15, 1998 $250,000
June 15, 1998 $250,000
September 15, 1998 $250,000
December 15, 1998 $250,000
---------------------------------------------------------------
March 15, 1999 $250,000
June 15, 1999 $250,000
September 15, 1999 $250,000
December 15, 1999 $250,000
---------------------------------------------------------------
March 15, 2000 $250,000
June 15, 2000 $250,000
September 15, 2000 $250,000
December 15, 2000 $250,000
---------------------------------------------------------------
March 15, 2001 $250,000
June 15, 2001 $250,000
September 15, 2001 $250,000
December 15, 2001 $250,000
---------------------------------------------------------------
March 15, 2002 $2,500,000
June 15, 2002 $2,500,000
September 15, 2002 $2,500,000
December 15, 2002 $2,500,000
===============================================================
; provided that the scheduled installments of principal of the Term Loans
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term Loans in accordance with subsection
2.4C; and provided further, that the Term Loans and all other amounts owed
hereunder with respect to the Term Loans shall be paid in full no later
than December 15, 2002, and the final installment payable by Company in
respect of the Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Term
Loans.
(ii) Scheduled Reductions of Revolving Loan Commitments. Except as
set forth in the following proviso, the Revolving Loan Commitments shall
be permanently reduced on the dates and in the amounts set forth below:
===============================================================
SCHEDULED REDUCTION
DATE OF REVOLVING LOAN
COMMITMENTS
===============================================================
March 15, 1998 $1,250,000
June 15, 1998 $1,250,000
September 15, 1998 $1,250,000
December 15, 1998 $1,250,000
---------------------------------------------------------------
March 15, 1999 $1,875,000
June 15, 1999 $1,875,000
September 15, 1999 $1,875,000
December 15, 1999 $1,875,000
---------------------------------------------------------------
March 15, 2000 $1,875,000
June 15, 2000 $1,875,000
September 15, 2000 $1,875,000
December 15, 2000 $1,875,000
---------------------------------------------------------------
March 15, 2001 $2,500,000
June 15, 2001 $2,500,000
September 15, 2001 $2,500,000
December 15, 2001 $17,500,000
===============================================================
; provided, however, that if the Term Loan Conversion shall occur,
thereafter the Revolving Loan Commitments shall instead be permanently
reduced on the dates and in the amounts set forth below:
===============================================================
SCHEDULED REDUCTION
DATE OF REVOLVING LOAN
COMMITMENTS
===============================================================
March 15, 1999 $3,750,000
June 15, 1999 $3,750,000
September 15, 1999 $3,750,000
December 15, 1999 $3,750,000
---------------------------------------------------------------
March 15, 2000 $3,750,000
June 15, 2000 $3,750,000
September 15, 2000 $3,750,000
December 15, 2000 $3,750,000
---------------------------------------------------------------
March 15, 2001 $3,750,000
June 15, 2001 $3,750,000
September 15, 2001 $3,750,000
December 15, 2001 $18,750,000
===============================================================
; and provided further, that the scheduled reductions of the Revolving
Loan Commitments set forth above shall be reduced in connection with any
voluntary or mandatory reductions of the Revolving Loan Commitments in
accordance with subsection 2.4C.
B. Prepayments and Unscheduled Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic
notice to Administrative Agent on or prior to 12:00 Noon (New York time)
on the date of prepayment, which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time to time prepay, without
premium or penalty, any Swing Line Loan on any Business Day in whole or in
part in an aggregate minimum amount of $250,000 and integral multiples of
$100,000 in excess of that amount. In addition, so long as no Swing Line
Loans are then outstanding, Company may, upon not less than one Business
Day's prior written or telephonic notice, in the case of Base Rate Loans,
and three Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case confirmed in writing to
Administrative Agent (which notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any time and
from time to time prepay, without premium or penalty, the Loans other than
Swing Line Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $250,000 in excess of
that amount; provided, however, that prepayment of a Eurodollar Rate Loan
on any day other than the expiration of the Interest Period applicable
thereto shall be subject to compliance with subsection 2.6D. Notice of
prepayment having been given as aforesaid, the Loans shall become due and
payable on the prepayment date specified in such notice and in the
aggregate principal amount specified therein. Any voluntary prepayments
pursuant to this subsection 2.4B(i) shall be applied as specified in
subsection 2.4C.
(ii) Voluntary Reductions of Revolving Loan Commitments . Company
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which notice
Administrative Agent will promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments at
the time of such proposed termination or reduction; provided that any such
partial reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $500,000 and integral multiples of $250,000 in
excess of that amount. Company's notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on the date
specified in such notice and shall reduce the Revolving Loan Commitment of
each Lender proportionately to its Pro Rata Share. Any such voluntary
reduction of the Revolving Loan Commitments shall be applied as specified
in subsection 2.4C.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments.
The Loans shall be prepaid and the Revolving Loan Commitments shall
be reduced in the manner provided in subsection 2.4C upon the occurrence
of the following circumstances:
(a) Prepayments and Reductions from Asset Sales. No later than
the second Business Day following the date of receipt by Company or
any of its Subsidiaries of the Net Cash Proceeds of any Asset Sale
(other than any portion of such Net Cash Proceeds that is reinvested
(or scheduled for reinvestment) in assets of the general type used
in the business of Company and its Subsidiaries within 360 days from
the date of receipt of such Net Cash Proceeds), Company shall prepay
the Loans (and/or the Revolving Loan Commitments shall be reduced)
in an aggregate amount equal to such Net Cash Proceeds; provided,
however, that Company may not reinvest (or schedule for
reinvestment) Net Cash Proceeds (x) upon the occurrence and during
the continuation of an Event of Default and (y) until the earlier of
(1) the Term Loan Conversion Date and (2) the first Anniversary.
Company shall, no later than 360 days after receipt of any such Net
Cash Proceeds that have not theretofore been applied to the
Obligations, make an additional prepayment of the Loans (and/or the
Revolving Loan Commitments shall be reduced) in the full amount of
all such proceeds that have not therefore been so reinvested.
Concurrently with any prepayment of the Loans and/or reduction of
the Commitments pursuant to this subsection 2.4B(iii)(a), Company
shall deliver to Administrative Agent an Officer's Certificate
demonstrating the derivation of the Net Cash Proceeds of the
correlative Asset Sale from the gross sales price thereof. In the
event that Company shall, at any time after receipt of Cash Proceeds
of any Asset Sale requiring a prepayment or a reduction of the
Revolving Loan Commitments pursuant to this subsection 2.4B(iii)(a),
determine that the prepayments and/or reductions of the Revolving
Loan Commitments previously made in respect of such Asset Sale were
in an aggregate amount less than that required by the terms of this
subsection 2.4B(iii)(a), Company shall promptly cause to be made an
additional prepayment of the Loans (and/or reduction in the
Revolving Loan Commitments) in an amount equal to the amount of any
such deficit, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional Net Cash Proceeds resulting in such
deficit.
(b) Prepayments and Reductions Due to Issuance of Debt. On or
prior to the first Business Day after receipt by Company or any of
its Subsidiaries of any proceeds of any Indebtedness (other than the
Loans and any other Indebtedness permitted under subsection 7.1(i),
(ii), (iii), (iv), (v), (vii) or (viii)), Company shall prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) in an
amount equal to the amount of such proceeds; provided,
however, that such proceeds from Indebtedness permitted under
subsection 7.1(vi) shall not be applied to prepay Loans pursuant to
this subsection if and to the extent such proceeds are applied by
Company to repay the Indebtedness with respect to the Subordinated
Bridge Loans and/or the Subordinated Exchange Notes; and provided
further, that payment or acceptance of the amounts provided for in
this subsection 2.4B(iii)(b) shall not constitute a waiver of any
Event of Default resulting from the incurrence of such Indebtedness
or otherwise prejudice any rights or remedies of Agents or Lenders.
(c) Prepayments and Reductions Due to Issuance of Equity
Securities. On or prior to the first Business Day after receipt by
Holdings or Company or any of its Subsidiaries of any Equity
Proceeds, Company shall prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) in an amount equal to such Equity
Proceeds; provided, however, that such Equity Proceeds shall not be
applied to prepay Loans pursuant to this subsection if and to the
extent such Equity Proceeds were derived (x) from exercise of the
Warrants, (y) directly or indirectly from a sale of Securities to
any of the MDC Entities, Dartford, Fenway, the Management Investors
and their respective Affiliates, or to employees or directors of
Holdings and its Subsidiaries pursuant to any employee stock option
or stock purchase plan or other employee benefit plan, and (z) from
sales of Securities to management officers and directors after the
Closing Date to the extent the consideration paid therefor does not
exceed $1,000,000; and provided further, however, that Equity
Proceeds from an initial public offering of Holdings Common Stock
shall not be applied to prepay Loans pursuant to this subsection if
and to the extent such proceeds are applied by Company to repay the
Indebtedness with respect to the Subordinated Bridge Loans and/or
the Subordinated Exchange Notes or the Indebtedness permitted under
subsection 7.1(vi). Holdings shall contribute to Company any Equity
Proceeds received by Holdings as are necessary to enable Company to
comply with this subsection.
(d) Prepayments and Reductions from Insurance and Condemnation
Proceeds. No later than the second Business Day following the date
of receipt by Company or any of its Subsidiaries of any cash
payments under any of the casualty insurance policies covering
damage to or loss of property maintained pursuant to subsection 6.4
resulting from damage to or loss of all or any portion of the
Collateral or any other tangible asset (net of actual and documented
reasonable costs incurred by Company or any of its Subsidiaries in
connection with adjustment and settlement thereof, "Insurance
Proceeds") or any proceeds resulting from the taking of assets by
the power of eminent domain, condemnation or otherwise (net of
actual and documented reasonable costs incurred by Company or any of
its Subsidiaries in connection with adjustment and settlement
thereof, "Condemnation Proceeds") (other than, if no Event of
Default shall have occurred and be continuing or shall be caused
thereby, any portion of any such proceeds that is reinvested (or
scheduled for reinvestment) in assets of the
general type used in the business of Company and its Subsidiaries
within 360 days from the date of receipt of such proceeds), Company
shall prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) in the amount of such proceeds not so reinvested (or
scheduled for such reinvestment). Company shall, no later than 360
days after receipt of any such Insurance Proceeds or Condemnation
Proceeds that have not theretofore been applied to the Obligations,
make an additional prepayment of the Loans (and/or the Revolving
Loan Commitments shall be reduced) in the full amount of all such
proceeds that have not therefore been reinvested in such assets.
(e) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with the Fiscal Year ending in
December 1998 (or, if the Term Loan Conversion occurs, December
1999)), Company shall, no later than 100 days after the end of such
Fiscal Year, prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) in an aggregate amount equal to 50% of such
Consolidated Excess Cash Flow for such Fiscal Year.
(f) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. Company shall prepay the Swing Line Loans and/or
the Revolving Loans from time to time to the extent necessary so
that (y) the Total Utilization of Revolving Loan Commitments shall
not at any time exceed the Revolving Loan Commitments then in
effect, and (z) the aggregate principal amount of all outstanding
Swing Line Loans shall not at any time exceed the Swing Line Loan
Commitment then in effect. All Swing Line Loans shall be prepaid in
full prior to the prepayment of any Revolving Loans pursuant to this
subsection 2.4B(iii)(f).
C. Application of Prepayments and Unscheduled Reductions of Revolving
Loan Commitments.
(i) Application of Voluntary Prepayments by Type of Loans. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be applied:
first to repay outstanding Swing Line Loans to the full extent thereof,
second to repay outstanding Revolving Loans to the full extent thereof,
and third, to repay outstanding Term Loans to the full extent thereof.
(ii) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(e) shall be applied
first to prepay the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to prepay the Swing
Line Loans to the full extent thereof and to permanently reduce the
Revolving Loan Commitments by the amount of such prepayment, third, to the
extent of any
remaining portion of the Applied Amount, to prepay the Revolving Loans to
the full extent thereof and to further permanently reduce the Revolving
Loan Commitments by the amount of such prepayment, and fourth, to the
extent of any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full extent
thereof. Notwithstanding the foregoing or anything herein to the contrary,
no portion of the proceeds of Indebtedness permitted under subsection
7.1(vi) which are applied to prepay the Loans shall be applied to
permanently reduce the Revolving Loan Commitments.
(iii) Application of Prepayments of Term Loans to the Scheduled
Installments of Principal Thereof. Any prepayments of the Term Loans
pursuant to subsection 2.4B(i) or 2.4B(iii) shall be applied to prepay the
Term Loans on a pro rata basis in accordance with the outstanding
principal amounts thereof. Any mandatory prepayments applied to the Term
Loans pursuant to this subsection shall be applied on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof) to
each scheduled installment of principal of the Term Loans set forth in
subsection 2.4A(i) that is unpaid at the time of such prepayment.
(iv) Application of Prepayments to Base Rate Loans and Eurodollar
Rate Loans. Considering Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to subsection 2.6D.
(v) Application of Unscheduled Reductions of Revolving Loan
Commitments. Any voluntary or mandatory reduction of the Revolving Loan
Commitments pursuant to subsection 2.4B(ii) or 2.4B(iii) shall be applied
to reduce the scheduled reductions of the Revolving Loan Commitments set
forth in subsection 2.4A(ii) in reverse chronological order.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Cash Proceeds
of Asset Sales, all proceeds received by Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including without limitation
reasonable compensation to
Administrative Agent and its agents and counsel, and all other
reasonable expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for
which Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all reasonable costs and expenses paid or incurred by
Administrative Agent in connection with the exercise of any right or
remedy under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
by Administrative Agent under any Guaranty shall be applied promptly from
time to time by Administrative Agent in the following order of priority:
(a) To the payment of the reasonable costs and expenses of any
collection or other realization under such Guaranty, including
without limitation reasonable compensation to Administrative Agent
and its agents and counsel, and all expenses, liabilities and
advances made or incurred by Administrative Agent in connection
therewith, all in accordance with the terms of this Agreement and
such Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to
the payment to Holdings or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
E. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in same day funds and without defense, setoff or
counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 12:00 Noon
(New York time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that time
on such due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with such Administrative Agent in order to cause
timely payment to be made to Administrative Agent of all principal,
interest, fees and expenses due hereunder (subject to sufficient funds
being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and in
any event any payments made in respect of any Loan on a date when interest
is due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments shall be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately to Lenders' respective Pro
Rata Shares. Administrative Agent shall promptly distribute to each
Lender, at its applicable Lending Office specified on Schedule 2.1 or at
such other address as such Lender may request, its Pro Rata Share of all
such payments received by Administrative Agent and the commitment fees of
such Lender when received by Administrative Agent pursuant to subsection
2.3. Notwithstanding the foregoing provisions of this subsection 2.4E(iii)
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
2.5 Use of Proceeds.
A. Term Loans. The proceeds of the Term Loans, together with up to
$30,000,000 in proceeds of the initial Revolving Loans (the "Acquisition
Revolving Loans"), the proceeds of the Subordinated Bridge Loans and the
proceeds of the equity capitalization of Company described in subsection 4.1C,
shall be applied to (i) finance the Acquisition and (ii) pay Transaction Costs.
B. Revolving Loans; Swing Line Loans. The proceeds of the Acquisition
Revolving Loans shall be applied by Company as provided in subsection 2.5A. The
proceeds of any other Revolving Loans and any Swing Line Loans shall be applied
by Company to finance expenditures which are included in the definition of
Consolidated Capital Expenditures and for working capital and general corporate
purposes, which may include the making of intercompany loans to any of Company's
Wholly Owned Subsidiaries, in accordance with subsection 7.1(iv), for their own
working capital and general corporate purposes.
C. Compliance With Laws. Company hereby undertakes that no portion of the
proceeds of any Loans or other extensions of credit under this Agreement shall
be used by any Loan Party in any manner which would be illegal under, or which
would cause the invalidity or unenforceability (in each case in whole or in
part) of any Loan Document under, any applicable law.
D. Margin Regulations. Without limiting the generality of subsection 2.5C,
no portion of the proceeds of any borrowing under this Agreement shall be used
by Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
11:00 A.M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have reasonably determined (which determination
shall be final and conclusive
and binding upon all parties hereto), on any Interest Rate Determination Date
with respect to any Eurodollar Rate Loans, that by reason of circumstances
arising after the date of this Agreement affecting the London interbank market,
adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate Administrative Agent shall on such date give notice (by telecopy
or by telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans, until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
(such notification not to be unreasonably withheld or delayed) and (ii) any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to the Loans in respect of which such determination was made shall be
deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telecopy or by telephone confirmed in writing)
to Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans, shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of Conversion/
Continuation, the Affected Lender shall make such Loan as (or convert such Loan
to, as the case may be) a Base Rate Loan, (c) the Affected Lender's obligation
to maintain its outstanding Eurodollar Rate Loans, as the case may be (the
"Affected Loans"), shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telecopy or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including without limitation any prepayment pursuant to subsection 2.4B(i)) or
conversion of any of its Eurodollar Rate Loans occurs on a date that is not the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have a Loan be made or maintained as, or converted to,
a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) results in a change in the basis of taxation of such Lender (or
its applicable lending office) (other than a change with respect to any
Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such
Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of
such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder, or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Eurodollar Rate Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Lender shall
promptly notify Company and Administrative Agent thereof and Company shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender shall reasonably determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be prima facie evidence of such additional amounts.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from which a
payment is made by or on behalf of Company.
(ii) Withholding of Taxes. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability
to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, Company shall deliver to Administrative
Agent evidence of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment
from that in effect at the date of this Agreement or at the date of such
Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), accurately completed and
duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224 (or
any successor forms) pursuant to clause (1) above, a Certificate re
Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such
Lender of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Administrative Agent for transmission to
Company two new original copies of Internal Revenue Service Form
1001 or 4224 (or any successor forms), or a Certificate re Non-Bank
Status and two original copies of Internal Revenue Service Form W-8
(or any successor form), as the case may be, accurately completed
and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm
or establish that such Lender is not subject to deduction or
withholding of United States federal
income tax with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Administrative Agent and Company
of its inability to deliver any such forms, certificates or other
evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) in
respect of deductions or withholdings of United States federal
income taxes if such Lender shall have failed to satisfy the
requirements of subsection 2.7B(iii)(a) or 2.7B(iii)(b); provided
that if such Lender shall have satisfied such requirements on the
Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a) or 2.7B(iii)(b).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by the National Association of Insurance Commissioners, any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of the National Association of
Insurance Commissioners, any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender reasonably determines such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time to
time, within fifteen Business Days after receipt by Company from such Lender of
the statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. Substitute Lenders. In the event Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Company in accordance with
this Agreement, Company may, so long as no Event of Default or Potential Event
of Default shall have occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all principal, interest and fees and other
amounts (including without limitation amounts, if any, owed under this
subsection 2.7) due to be paid to such Lender with respect to all periods
through such date of termination, (ii) another financial institution
satisfactory to Company and Administrative Agent (or, in the case of a
Co-Administrative Agent that is also the Lender to be terminated, its successor
Co-Administrative Agent) shall agree, as of such date, to become a Lender for
all purposes under this Agreement (whether by assignment or amendment) and to
assume all obligations of the Lender to be terminated as of such date, and (iii)
all documents and supporting materials necessary, in the judgment of
Administrative Agent (or, in the case of a Co-Administrative Agent that is also
the Lender to be terminated, its successor Co-Administrative Agent) to evidence
the substitution of such Lender shall have been received and approved by
Co-Administrative Agents as of such date.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office. A certificate
as to the amount of any such expenses payable by Company pursuant to this
subsection 2.8 (setting forth in reasonable detail the basis for requesting such
amount) submitted by such Lender or
Issuing Lender to Company (with a copy to Administrative Agent) shall be
conclusive absent manifest error.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A(ii), and that Swing Line Lender make
Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of Company for the purposes specified in the definitions of Commercial
Letters of Credit and Standby Letters of Credit. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $5,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the Revolving Loan Commitment Termination Date and
(b) the date which is one year from the date of issuance of such Standby
Letter of Credit; provided that the immediately preceding clause (b) shall
not prevent any Issuing Lender from agreeing that a Standby Letter of
Credit will automatically be extended for one or more successive periods
not to exceed one year each unless such Issuing Lender elects not to
extend for any such additional period; provided further that, unless
Requisite Lenders otherwise consent, such Issuing Lender shall give notice
that it will not extend such Standby Letter of Credit if it has knowledge
that an Event of Default has occurred and is continuing on the last day on
which such Issuing Lender may give notice to the beneficiary that it will
not extend such Standby Letter of Credit;
(iv) any Commercial Letter of Credit (a) having an expiration date
later than the earlier of (X) 30 days prior to the Revolving Loan
Commitment Termination Date and (Y) the date which is 180 days from the
date of issuance of such Commercial Letter
of Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars; or
(vi) any Letter of Credit during any period when a Lender Default
exists, unless each Issuing Lender has entered into arrangements
satisfactory to it and Company to eliminate such Issuing Lender's risk
with respect to the Defaulting Lender, including by cash collateralizing
such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage
(after giving effect to the issuance of the proposed Letter of Credit).
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent, at the Funding
and Payment Office, a Notice of Issuance of Letter of Credit no later than
12:00 Noon (New York time) at least five Business Days, or such shorter
period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) the face amount of or
maximum aggregate liability under, as applicable, the Letter of Credit,
(c) the expiration date of the Letter of Credit, (d) the name and address
of the beneficiary, and (e) the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a precise
description of any documents and the verbatim text of any certificates to
be presented by the beneficiary which, if presented by the beneficiary
prior to the expiration date of the Letter of Credit, would require the
Issuing Lender to make payment under the Letter of Credit; provided that
the Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents or
certificates; provided further that no Letter of Credit shall require
payment against a conforming draft or other request for payment to be made
thereunder on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such draft or other
request for payment is required to be presented is located) that such
draft or other request for payment is presented if such presentation is
made after 10:00 A.M. (in the time zone of such office of the Issuing
Lender) on such business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender)
prior to the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable Notice
of Issuance of Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon the issuance
of any Letter of Credit, Company shall be deemed to have re-certified, as
of the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and such Administrative Agent
shall be the Issuing Lender with respect thereto. In the event that
Administrative Agent, in its sole discretion, elects not to issue such
Letter of Credit, Administrative Agent shall promptly so notify the
Company, whereupon Company may request any other Lender to issue such
Letter of Credit by delivering to such Lender a copy of the applicable
Notice of Issuance of Letter of Credit. Any Lender so requested to issue
such Letter of Credit shall promptly notify Company and Administrative
Agent whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue such Letter
of Credit shall be the Issuing Lender with respect thereto. In the event
that all other Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue
such Letter of Credit, Administrative Agent shall be obligated to issue
such Letter of Credit and shall be the Issuing Lender with respect
thereto, notwithstanding the fact that the sum of the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line Loans,
may exceed Administrative Agent's Revolving Loan Commitment then in
effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures (any
such issuance by Administrative Agent being effected through the Funding
and Payment Office), and upon its issuance of such Letter of Credit the
Issuing Lender shall promptly notify Administrative Agent and each Lender
of such issuance, which notice shall be accompanied by a copy of such
Letter of Credit.
(iv) Reports to Lenders. Within 30 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to Administrative Agent and Administrative
Agent shall deliver to each Lender a report setting forth for such
calendar quarter the daily maximum amount available to be drawn under the
Letters of Credit that were outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored or payments made thereunder in an amount equal to such Lender's
Pro Rata Share (with respect to the Revolving Loan Commitments) of the maximum
amount which is or at any time may become available to be drawn or required to
be paid thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts to each Issuing Lender with
respect to Letters of Credit issued by it for the account of Company:
(i) with respect to each Letter of Credit, (a) a fronting fee equal
to 1/4 of 1% per annum of the daily maximum amount available to be drawn
under such Letter of Credit and (b) a Letter of Credit fee equal to the
product of (x) the Applicable Eurodollar Rate Margin with respect to
Revolving Loans and (y) the daily maximum amount available to be drawn
under such Letter of Credit, in each case payable in arrears on and to
each March 15, June 15, September 15 and December 15 of each year,
commencing on March 15, 1997, and computed on the basis of a 360-day year
for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder (without duplication of
the fees payable under clause (i) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment, transfer
or drawing, as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender its Pro Rata Share of such amount.
3.3 Drawings and Payments and Reimbursement of Amounts Paid Under Letters of
Credit.
A. Responsibility of Issuing Lender With Respect to Requests For Drawings
and Payments. In determining whether to honor any drawing or request for payment
under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall
be responsible only to determine that the documents and certificates required to
be delivered under such Letter of Credit have been delivered and that they
comply on their face with the requirements of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event an Issuing Lender has determined to honor a drawing or request for
payment under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Company and Administrative Agent, and Company shall reimburse
such Issuing Lender on or before the Business Day immediately following the date
on which such drawing is honored or such payment is made (the applicable
"Reimbursement Date"), in an amount in same day funds equal to the amount of
such drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 12:00 Noon (New York time) on the date of
such drawing or request for payment that Company intends to reimburse such
Issuing Lender for the amount of such honored
drawing or payment with funds other than the proceeds of Revolving Loans,
Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans which are Base
Rate Loans, on the applicable Reimbursement Date in an amount equal to the
amount of such honored drawing or payment and (ii) subject to satisfaction or
waiver of the conditions specified in subsection 4.2B, Lenders shall, on the
applicable Reimbursement Date, make Revolving Loans and in the amount of such
honored drawing or payment, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of such
honored drawing or payment; provided further that if for any reason proceeds of
Revolving Loans are not received by such Issuing Lender on the applicable
Reimbursement Date in an amount equal to the amount of such honored drawing or
payment, Company shall reimburse such Issuing Lender, on demand, in an amount in
Dollars and in same day funds equal to the excess of the amount of such honored
drawing or payment over the aggregate amount of such Revolving Loans, if any,
which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Company shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Payments Under Letters of Credit.
(i) Payment by Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in
an amount equal to the amount of any honored drawing or payment made by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing or payment and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share of the
Revolving Loan Commitments. Each Lender shall make available to such
Issuing Lender an amount equal to its respective participation, in same
day funds, at the office of such Issuing Lender specified in such notice,
not later than 12:00 Noon (New York time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing Lender
is located) after the date notified by such Issuing Lender. In the event
that any Lender fails to make available to such Issuing Lender on such
business day the amount of such Lender's participation in such Letter of
Credit as provided in this subsection 3.3C, such Issuing Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by such Issuing Lender for
the correction of errors among banks for three Business Days and
thereafter at the Base Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Lender to recover from any Issuing
Lender any amounts made available by such Lender to such Issuing Lender
pursuant to this subsection 3.3C in the event that it is determined by the
final judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of which
payment was made by such Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of any
honored drawing or payment made by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing or payment such other Lender's Pro
Rata Share of all payments subsequently received by such Issuing Lender
from Company in reimbursement of such honored drawing or payment when such
payments are received. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
Issuing Lender, with respect to drawings honored or payments made under
any Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such drawing or payment from the date
such drawing is honored or payment is made to but excluding the date such
amount is reimbursed by Company (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date such drawing is honored or
payment is made to but excluding the applicable Reimbursement Date, the
Base Rate plus the Applicable Base Rate Margin with respect to Revolving
Loans, and (b) thereafter, a rate which is 2% per annum in excess of the
rate of interest described in the foregoing clause (a). Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of a
360-day year for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing or payment under a Letter of
Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i), (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date of the applicable honored drawing or payment
under a Letter of Credit issued by such Issuing Lender to but excluding
the date on which such Issuing Lender is reimbursed for the amount of such
drawing or payment (including any such reimbursement out of the proceeds
of Revolving Loans pursuant to subsection 3.3B), the amount that such
other Lender would have been entitled to receive in respect of the Letter
of Credit fee that would have been payable in respect of such Letter of
Credit for such period pursuant to subsection 3.2 if no drawing had been
honored or payment had been made under such Letter of Credit, and (b) in
the event such Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such drawing or
payment, such Issuing Lender shall distribute to each other Lender which
has paid all amounts payable by it under subsection 3.3C(i) with respect
to such drawing or payment such other Lender's
Pro Rata Share of any interest received by such Issuing Lender in respect
of that portion of such drawing or payment so reimbursed by other Lenders
for the period from the date on which such Issuing Lender was so
reimbursed by other Lenders to and including the date on which such
portion of such drawing or payment is reimbursed by Company. Any such
distribution shall be made to a Lender at its Lending Office set forth on
Schedule 2.1 or at such other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for drawings
honored or payments made under the Letters of Credit issued by it and to repay
any Revolving Loans made by Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a demand, draft or certificate or other
document which does not substantially comply with the terms of such Letter
of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lender's Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing or other request for payment under any such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing or
payment under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including, without limitation,
any Governmental Acts, and
none of the above shall affect or impair, or prevent the vesting of, any of such
Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that any law, treaty or governmental rule, regulation or
order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by any Issuing Lender or Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not having the
force of law):
(i) results in any change in the basis of taxation of such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
(other than a change with respect to any Tax on the overall net income of
such Issuing Lender or Lender) with respect to the issuing or maintaining
of any Letters of Credit or the purchasing or maintaining of any
participations therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered by any particular
Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any Letters of Credit issued by any
Issuing Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition on or affecting such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Issuing Lender or Lender (or its applicable
lending or letter of credit office) with respect thereto; then, in any case,
Company shall promptly pay to such Issuing Lender or Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(reasonably determined by such Issuing Lender or Lender) as may be necessary to
compensate such Issuing Lender or Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Issuing Lender or
Lender shall deliver to Company a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to such Issuing
Lender or Lender under this subsection 3.6, which statement shall be prima facie
evidence of such additional amounts.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Term Loans and Acquisition Revolving Loans.
The obligations of Lenders to make the Term Loans and the Acquisition
Revolving Loans are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. MBW LLC, Holdings and Company Documents.
(i) On or before the Closing Date, each of Holdings and Company
shall deliver or cause to be delivered to Lenders (or to Administrative
Agent for Lenders with sufficient originally executed copies, where
appropriate, for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Closing Date:
(a) Certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of
State of the State of Delaware and each other state in which it is
qualified as a foreign corporation to do business, each dated a
recent date prior to the Closing Date;
(b) Copies of its Bylaws, certified as of the Closing Date by
its corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment;
(c) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents and Related Agreements to
which it is a party, certified as of the
Closing Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or amendment;
(d) Signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents;
(e) Executed originals of this Agreement and the other Loan
Documents to which it is a party; and
(f) Such other documents as Agents may reasonably request.
(ii) On or before the Closing Date, MBW LLC shall deliver or cause
to be delivered to Administrative Agent the following, each, unless
otherwise noted, dated the Closing Date:
(a) Certified copies of its Certificate of Formation, together
with a good standing certificate from the Secretary of State of the
State of Delaware and each other state in which it is qualified as a
foreign limited liability company to do business, each dated a
recent date prior to the Closing Date; and
(b) Copies of the MBW LLC Agreement and any other
organizational document in effect with respect to MBW LLC, certified
as of the Closing Date by a manager of MBW LLC as being in full
force and effect without modification or amendment.
B. No Material Adverse Effect. Since September 30, 1996, no Material
Adverse Effect (in the opinions of Administrative Agent or Lenders) shall have
occurred.
C. Corporate and Capital Structure; Capitalization of MBW LLC, Holdings
and Company; Management.
(i) Corporate Structure. The corporate organizational structure,
capital structure and ownership of MBW LLC and Holdings and its
Subsidiaries, after giving effect to the Acquisition, shall be as set
forth on Schedule 4.1C annexed hereto. MBW LLC shall have no Subsidiaries
on the Closing Date other than Holdings and Company.
(ii) Capital Structure and Ownership; Capitalization of MBW LLC,
Holdings and Company. The capital structure and ownership of MBW LLC,
Holdings and Company, both before and after giving effect to the
Acquisition, shall be as set forth on Schedule 4.1C annexed hereto. On or
before the Closing Date, (a) the MDC Entities, Dartford, Fenway and the
Management Investors shall have purchased all of the outstanding
membership interests in MBW LLC for cash consideration of not less than
$33,800,000 and total consideration of not less than $34,800,000 (it being
understood that up to $200,000 of the consideration for the purchase of
membership interests in
MBW LLC may be paid by management officers and employees after the Closing
Date), (b) MBW LLC shall have contributed to Holdings, as common equity,
the cash proceeds of such sale of membership interests in MBW LLC, and (c)
Holdings shall have contributed to Company, as common equity, the cash
proceeds of such equity contribution by MBW LLC. The MDC Entities shall
have purchased more than 50% of the membership interests of MBW LLC.
Company shall have provided evidence satisfactory to Agents that the
proceeds of the equity capitalization of Company described in the
immediately preceding sentence have been irrevocably committed, prior to
the application of the proceeds of the Term Loans and the Acquisition
Revolving Loans, to the payment of a portion of the purchase price for the
Business and/or Transaction Costs. On the Closing Date, Holdings shall
have issued and placed in escrow pursuant to the Warrant Escrow Agreement
Warrants representing 15% of the fully diluted common equity of Holdings
as of the Closing Date.
(iii) Management. The management structure of Holdings and Company
after giving effect to the Acquisition shall be as set forth on Schedule
4.1C annexed hereto. Agents shall have received duly executed copies of,
and shall be satisfied with the form and substance of, the Employment
Agreements, certified by the corporate secretary of Company as being in
full force and effect as of the Closing Date without modification, waiver
or amendment.
D. Acquisition Agreement. On the Closing Date (i) Agents shall have
received executed or conformed copies of the Acquisition Agreement and any
amendments thereto and documents executed in connection therewith, (ii) such
Acquisition Agreement shall be in full force and effect and, no term or
condition thereof shall have been amended, modified or waived after the
execution thereof except with the prior written consent of Arranging Agent,
(iii) the parties thereto shall not have failed in any material respect to
perform any material obligation or covenant required by any such Acquisition
Agreement to be performed or complied with by any of them on or before the
Closing Date, and (iv) Agents shall have received an Officer's Certificate from
Company to the effect set forth in clauses (ii) and (iii).
E. Issuance of Subordinated Bridge Notes. On or before the Closing Date,
Company shall have issued and sold the Subordinated Bridge Notes in an aggregate
principal amount of not less than $50,000,000 and Company shall have delivered
to Administrative Agent complete, correct and conformed copies of the
Subordinated Bridge Notes, the Subordinated Bridge Loan Agreement, the
Subordinated Bridge Loan Guaranties and the other principal Subordinated Bridge
Loan Documents, all in form and substance reasonably satisfactory to
Administrative Agent. Company shall have provided evidence satisfactory to
Agents that the proceeds of Subordinated Bridge Loans have been irrevocably
committed, prior to the application of the proceeds of the Term Loans and the
Acquisition Revolving Loans, to the payment of a portion of the purchase price
of the Business and/or Transaction Costs.
F. Related Agreements. Administrative Agent shall have received (i) a
fully executed or conformed copy of each Related Agreement and all principal
documents executed
in connection therewith, and each Related Agreement shall be in full force and
effect (except for those Related Agreements not executed on or prior to the
Closing Date) and no provision thereof shall have been modified or waived in any
respect determined by Agents to be material, in each case without consent of
Agents and (ii) an Officer's Certificate from Company to the effect set forth in
clause (i), and each such Related Agreement (including without limitation the
Transition Agreements) shall be reasonably satisfactory in form and substance to
Agents.
G. Consummation of Acquisition.
(i) All conditions to the Acquisition set forth in the Acquisition
Agreement shall have been satisfied or the fulfillment of any such
conditions shall have been waived with the consent of Administrative
Agent;
(ii) Agents shall have received evidence in form and substance
satisfactory to Agents that the Acquisition shall become effective in
accordance with the terms of the Acquisition Agreement immediately upon
the making of the initial Loans;
(iii) the aggregate cash consideration paid to Seller in connection
with the Acquisition (excluding amounts to be paid after the Closing Date
relating to excess Inventory on the Closing Date) shall not exceed
$116,000,000;
(iv) Transaction Costs shall not exceed $14,000,000, and Agents
shall have received evidence satisfactory in form and substance to Agents
to such effect: and
(v) Agents shall have received an Officer's Certificate of Company
to the effect set forth in clauses (i)-(iv) above and stating that Company
will proceed to consummate the Acquisition immediately upon the making of
the initial Loans.
H. Existing Liens; No Other Indebtedness Outstanding. All security
interests attaching to any of the assets of the Business created to secure
obligations under any Indebtedness of Seller shall have been terminated, and
Company shall have delivered to Administrative Agent UCC-3 termination
statements or assignments (or comparable forms) and any and all other
instruments of release, satisfaction, assignment and/or reconveyance (or
evidence of the filing thereof) as may be necessary or advisable to terminate
all such security interests and all other security interests in the Collateral.
Agents shall have received an Officers' Certificate of Company stating that,
after giving effect to the transactions described in this subsection 4.1H, Loan
Parties shall have no Indebtedness outstanding other than Indebtedness under the
Loan Documents and under the Subordinated Bridge Loan Documents.
I. Necessary Consents. Company shall have obtained all consents necessary
or advisable in connection with the Acquisition, the transactions contemplated
by the Loan Documents and Related Agreements and the continued operation of the
business conducted by Company and its Subsidiaries, and each of the foregoing
shall be in full force and effect and in form and substance satisfactory to
Administrative Agent (except as disclosed to and approved
by Administrative Agent). All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing thereof, and no action, request for stay, petition
for review or rehearing, reconsideration or appeal shall be pending and any time
for agency action to set aside its consent on its own motion shall have expired.
J. Maximum Utilization of Revolving Loan Commitments On the Closing Date,
after giving effect to the Acquisition, the Total Utilization of Revolving Loan
Commitments shall not exceed $30,000,000.
K. Collateral Access Agreements. Agents shall have received from Company
Collateral Access Agreements in form and substance satisfactory to
Administrative Agent executed by Seller with respect to any facility of Seller
at which equipment of Company is located on the Closing Date. Neither Holdings
nor Company shall own any interest in any real property on the Closing Date
other than its Leasehold Property interest in its offices in Columbus, Ohio.
L. Perfection of Security Interests in Personal Property and Mixed
Collateral. Holdings and Company shall have taken or caused to be taken such
actions in such a manner so that Administrative Agent has, for the benefit of
Agents and Lenders, a valid and perfected First Priority security interest in
the entire personal property and mixed Collateral. Such actions shall include,
without limitation: (i) the delivery pursuant to the applicable Collateral
Documents of (a) certificates (which certificates shall be properly endorsed in
blank for transfer or accompanied by irrevocable undated stock powers duly
endorsed in blank, all in form and substance satisfactory to Administrative
Agent) representing all of the shares of capital stock required to be pledged
pursuant to the Collateral Documents, and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral; (ii) delivery to Agents of (a)
the results of a recent search, by a Person satisfactory to Agents, of all
effective Uniform Commercial Code financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect to any
personal or mixed property of any Loan Party, together with copies of all such
filings disclosed by such search; (iii) the delivery to Administrative Agent of
Uniform Commercial Code financing statements and fixture filings executed by the
applicable Loan Parties as to all such Collateral granted by such Loan Parties
for all jurisdictions as may be necessary or desirable to perfect Administrative
Agent's security interest in such Collateral; (iv) the delivery to
Administrative Agent of all cover sheets or other documents or instruments
required to be filed with the PTO or the United States Copyright Office in order
to create or perfect Liens in respect of any IP Collateral or any registered
copyrights of Company; and (v) the delivery to Administrative Agent of evidence
reasonably satisfactory to Administrative Agent that all other filings
(including, without limitation, filings of Uniform Commercial Code termination
statements and termination statements with respect to prior Liens on IP
Collateral), recordings and other actions that Administrative Agent deems
necessary or advisable to establish, preserve and perfect the First Priority
Liens granted to Administrative Agent in personal and mixed property shall have
been made.
M. Solvency Appraisal; Appraisal of Fixed Assets, Trademarks and
Tradenames. Administrative Agent shall have received a letter from American
Appraisal Associates, Inc. dated the Closing Date and addressed to
Administrative Agent and Lenders, in form, scope and substance reasonably
satisfactory to Administrative Agent and with appropriate attachments,
demonstrating that, after giving effect to the consummation of the Acquisition
and the financing transactions contemplated hereby, Holdings and its
Subsidiaries are Solvent. Administrative Agent shall have received an appraisal
of the fixed assets, trademarks and tradenames acquired by Company in the
Acquisition, prepared by American Appraisal Associates, Inc. and dated not
earlier than 30 days before the Closing Date, in form and substance reasonably
satisfactory to Administrative Agent.
N. Transaction Costs. Not less than three days prior to the Closing Date,
Company shall have delivered to Administrative Agent and Lenders a schedule, in
a form satisfactory to Administrative Agent, setting forth Company's reasonable
best estimate of the Transaction Costs (other than amounts payable to Agents and
Lenders).
O. Opinions of Loan Parties' Counsel. Lenders and their respective counsel
shall have received (i) originally executed copies of one or more favorable
written opinions of White & Case, counsel for the Loan Parties, and Xxxxxxxx &
X'Xxxx, LLP, counsel for the Loan Parties, each in form and substance reasonably
satisfactory to Agents and their counsel, dated as of the Closing Date and
setting forth substantially the matters in the opinions designated in Exhibit
XIII annexed hereto and as to such other matters as Agents acting on behalf of
Lenders may reasonably request, and (ii) evidence satisfactory to Agents that
Loan Parties have instructed such counsel to deliver such opinions to Lenders.
P. Opinions of Agents' Counsel. Lenders shall have received originally
executed copies of one or more favorable written opinions of O'Melveny & Xxxxx
LLP, counsel to Agents, dated as of the Closing Date, substantially in the form
of Exhibit XIV annexed hereto and as to such other matters as Agents acting on
behalf of Lenders may reasonably request.
Q. Opinions of Counsel Delivered Under Related Agreements. Agents and
their counsel shall have received copies of each of the opinions of counsel
(and, if requested by Administrative Agent, any certificates and letters)
delivered to the parties in connection with the Acquisition and the making of
the Subordinated Bridge Loans, together with, to the extent agreed by such law
firm, a letter from each such counsel authorizing Agents and Lenders to rely on
such opinion as though it were addressed to them.
R. Fees. Company shall have paid to Agents, for distribution (as
appropriate) to Agents and Lenders, the fees payable on the Closing Date
referred to in subsection 2.3.
S. Financial Statements; Pro Forma Statement of Assets. On or before the
Closing Date, Lenders shall have received from Company (i) audited financial
statements of the Business for the years ending December 31 of 1994 and 1995,
consisting of statements of operations for such years, (ii) audited financial
statements of the Business as at September 30,
1996, consisting of a statement of operations for the nine-month period ending
on such date, (iii) a statement of assets acquired as of September 30, 1996, in
reasonable detail, and (iv) a pro forma consolidated statement of assets of
Holdings and its Subsidiaries as at September 30, 1996 prepared in accordance
with GAAP and reflecting the consummation of the Acquisition, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements, which pro forma statement of assets shall be in form and
substance satisfactory to Lenders and shall be certified by the chief financial
officer of Company as (a) prepared based on good faith assumptions and on the
best information available to Company as of the date of delivery thereof and (b)
fairly presenting on a pro forma basis the financial position of Holdings and
Company as at September 30, 1996, as adjusted as described in this clause (iv),
assuming that such events had occurred at such date.
T. Insurance Appraisal; Evidence of Insurance. Administrative Agent shall
have received (i) a copy of the insurance report prepared by Aon Risk Services
with respect to Company and its Subsidiaries and such report shall be in form
and substance satisfactory to Agents, and (ii) satisfactory certificates of
insurance with respect to each of the insurance policies required pursuant to
subsection 6.4, and Agents shall be satisfied with the nature and scope of these
insurance policies.
U. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 hereof are true and correct in all
material respects on and as of the Closing Date to the same extent as though
made on and as of that date and that Company shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by them on or before the
Closing Date, except as otherwise disclosed to and agreed to in writing by
Administrative Agent.
V. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agents, acting
on behalf of Lenders, and their counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, signed by the chief executive officer, the chief
financial officer or the controller of Company
or by any executive officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true and correct in all material respects on
and as of that Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects
on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement and the
other Loan Documents provide shall be performed or satisfied by it on or
before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it, on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall not
violate any law including, without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or
any property of Holdings or any of its Subsidiaries that has not been
disclosed by Company in writing and that is required to be so disclosed
pursuant to subsection 5.6 or 6.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no development
not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed that, in either event, in the
opinion of Administrative Agent or of Requisite Lenders, would be expected
to have a Material Adverse Effect; and no injunction or other restraining
order shall have been issued and no hearing to cause an injunction or
other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated by this Agreement or the making
of Loans hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, signed by the chief executive officer, the chief financial officer or
the controller of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lender to issue Letters of Credit and to induce other
Lenders to purchase participations therein, each of Holdings and Company
represents and warrants to each Lender, on the date of this Agreement, on each
Funding Date, and on the date of issuance of each Letter of Credit, that the
following statements are true and correct:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. Each Loan Party has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents and to carry out
the transactions contemplated thereby. Company has all requisite corporate power
and authority to issue and pay the Notes.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary
to carry out its business and operations, except in jurisdictions where the
failure to be so qualified, authorized or in good standing has not had and will
not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.12.
D. Company and Subsidiaries. All of the Subsidiaries of Holdings as of the
Closing Date after giving effect to the Acquisition are identified in Schedule
5.1 annexed hereto. The capital stock of each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such capital stock constitutes Margin
Stock. Company and each of the Subsidiaries of Holdings identified in Schedule
5.1 annexed hereto are duly organized, validly existing and in good standing
under the laws of their respective jurisdictions of incorporation or formation
set forth therein, have full corporate power and authority to own their assets
and properties and to operate their business as presently owned and conducted
and as proposed to be conducted, and are qualified to do business and in good
standing in every jurisdiction where their assets are located and wherever
necessary to carry out their business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and will not have a Material Adverse Effect. Schedule
5.1 annexed hereto correctly sets forth the ownership interest of Company in
each of its Subsidiaries identified therein.
E. Acquisitions. Each Loan Party shall have, upon consummation thereof,
all requisite corporate power and authority to consummate, on the terms set
forth in the applicable acquisition agreement and related documents, each
Permitted Acquisition consummated by it pursuant to subsection 7.7(vii). Upon
consummation of any such Permitted Acquisition, such Permitted Acquisition shall
have been duly authorized by all necessary corporate action of such Loan Party.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements and the issuance, delivery and
payment of the Notes have been duly authorized by all necessary corporate or
other action on the part of each of the Loan Parties thereto.
B. No Conflict. After giving effect to the consummation of the
transactions contemplated hereby to occur on the Closing Date, the execution,
delivery and performance by each of the Loan Parties of the Loan Document and
the Related Agreements to which they are parties, the issuance, delivery and
payment of the Notes and the consummation of the transactions contemplated by
the Loan Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to MBW LLC or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of any Loan Party or any of its Subsidiaries
or any order, judgment
or decree of any court or other agency of government binding on any Loan Party
or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of any Loan Party or any of its Subsidiaries, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Loan Party or any of its Subsidiaries (other than
any Liens created under any of the Loan Documents in favor of Administrative
Agent on behalf of Lenders), or (iv) require any approval of stockholders or
partners or any approval or consent of any Person under any Contractual
Obligation of any Loan Party or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date.
C. Governmental Consents. The execution, delivery and performance by the
Loan Parties of the Loan Documents and Related Agreements to which they are
party, the issuance, delivery and payment of the Notes and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except for such registrations, consents, approvals, notices or other
actions which will be made, obtained or taken on or before the Closing Date.
D. Binding Obligation. Each of the Loan Documents and the Related
Agreements has been duly executed and delivered by each of the Loan Parties
party thereto and is the legally valid and binding obligation of each such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Holdings Common Stock, Subordinated Bridge Notes,
Subordinated Exchange Notes and Warrants.
(i) Holdings Common Stock. The Holdings Common Stock to be sold on
or before the Closing Date, when issued and delivered, will be duly and
validly issued, fully paid and nonassessable. The issuance and sale of
such Holdings Common Stock, upon such issuance and sale, will either (a)
have been registered or qualified under applicable federal and state
securities laws or (b) be exempt therefrom.
(ii) Subordinated Bridge Notes and Subordinated Exchange Notes.
Company has the corporate power and authority to issue the Subordinated
Bridge Notes and the Subordinated Exchange Notes. The Subordinated Bridge
Notes and the Subordinated Exchange Notes, when issued and paid for, will
be the legally valid and binding obligations of Company, enforceable
against Company in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The subordination
provisions of the Subordinated Bridge Loan Agreement, the Subordinated
Bridge Notes and the Subordinated Bridge Loan Guaranties will be
enforceable against the holders of the
Subordinated Bridge Notes, and the subordination provisions of the
Subordinated Exchange Note Indenture, the Subordinated Exchange Notes and
the other Subordinated Exchange Note Documents will be enforceable against
the holders of the Subordinated Exchange Notes, and the Loans and all
other monetary Obligations hereunder are and will be within the definition
of "Senior Indebtedness" included in such provisions. The Subordinated
Bridge Notes and the Subordinated Exchange Notes, when issued and sold,
will either (a) have been registered or qualified under applicable federal
and state securities laws or (b) be exempt therefrom.
(iii) Warrants. The Warrants, when issued and delivered, will be
duly and validly issued, fully paid and nonassessable. The issuance and
sale of such Warrants, upon such issuance and sale, will either (a) have
been registered or qualified under applicable federal and state securities
laws or (b) be exempt therefrom.
5.3 Financial Condition; Projections.
A. Financial Statements. Company has heretofore delivered to Lenders, at
Lenders' request, the following financial statements and information: (i) the
audited statements of operations of the Business as at December 31 of 1994 and
1995 for the calendar years then ended, together with the report on such
consolidated financial statements of Coopers & Xxxxxxx LLP setting forth in each
case in comparative form the corresponding figures for the previous calendar
year, and (iii) the audited statement of operations of the Business as at
September 30, 1996 for the nine months then ended, together with the
corresponding figures for the corresponding period of the previous calendar
year. All such statements were prepared in conformity with GAAP and fairly
present, in all material respects, the financial position of the entities
described in such financial statements as at the respective dates thereof and
the results of operations of the entities described therein for each of the
periods then ended. Neither Company nor the Business has (and will not
immediately following the funding of the initial Loans have) any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the most recent
financial statements delivered pursuant to subsection 6.1, the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole.
B. Projections. On and as of the Closing Date, the financial projections
of Company and its Subsidiaries for the period from December 31, 1996 through
December 31, 2002 (giving effect to the Acquisition) previously delivered to
Lenders (the "Projections") are based on good faith estimates and assumptions
made by the management of Company, it being recognized, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.
Notwithstanding the foregoing, as of the Closing Date, management of Company
believed that the Projections were reasonable and attainable.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since September 30, 1996, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Intellectual Property.
A. After giving effect to the transactions contemplated by this Agreement
to occur on the Closing Date, Holdings and its Subsidiaries have good,
sufficient and legal title to all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens.
B. After giving effect to the Acquisition, Company has acquired, pursuant
to the Acquisition Agreement, that which Seller has represented is the ownership
of all patents, copyrights (whether registered or unregistered), trademarks
(whether registered or unregistered), trade names, trade dress, service marks,
assumed names and know-how (such items, together with all applications therefor
and all other intellectual property and proprietary rights, whether or not
subject to statutory registration or protection, being collectively referred to
herein as "Intellectual Property") relating exclusively to, or used exclusively
in connection with, the Business which (i) are owned by Seller on the Closing
Date and (ii) are necessary, together with the rights licensed to Company under
the Shared Technology License Agreement and the Patent License Agreement, for
the operation of the Business as conducted on the Closing Date, except as set
forth on Schedule 5.5B annexed hereto; provided, however, that such Intellectual
Property does not include any rights to the brand name "Country Crock,"
"Pennant" or "Bakers Source."
C. Each Loan Party owns, or is licensed to use, all Intellectual Property
necessary for the operation of its business as conducted except for Intellectual
Property the failure to own or license which could not reasonably be expected to
have a Material Adverse Effect. No claim of which any Loan Party has been given
notice has been asserted and is pending by any Person challenging or questioning
the use by any Loan Party of any such Intellectual Property the validity or
effectiveness of any such Intellectual Property, nor does Holdings or Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
5.6 Litigation; Adverse Facts.
There is no action, suit, proceeding, arbitration or governmental
investigation (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries that, either individually or in
the aggregate together with all other such actions, proceedings and
investigations, has had, or could reasonably be expected to result in, a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries is or has
been (i) in violation of any applicable law (including any Pure Food and Drug
Laws) that has had, or could reasonably be expected to result in, a Material
Adverse Effect or (ii) subject to or in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that has had, or could
reasonably be expected to result in, a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all material tax returns
and reports of Holdings and its Subsidiaries required to be filed by any of them
have been timely filed, and all material taxes, assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed tax assessment against Holdings or any of its Subsidiaries other than
those which are being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings and for which reserves or other appropriate
provisions, if any, as may be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected (based upon
assumptions that are reasonable at the time made) to result in, individually or
in the aggregate, a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. All such Material Contracts
are in full force and effect and no defaults currently exist thereunder, except
where the failure to be in full force and effect,
and except for such defaults which, could not reasonably be expected to have a
Material Adverse Effect.
5.9 Governmental Regulation.
Neither Holdings nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
Neither Holdings nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
A. Holdings and each of its ERISA Affiliates are in substantial compliance
with all applicable provisions and requirements of ERISA with respect to each
Employee Benefit Plan, and have substantially performed all their obligations
under each Employee Benefit Plan, except to the extent that any non-compliance
with ERISA or any such failure to perform would not result in material liability
of Holdings or any of its ERISA Affiliates.
B. No ERISA Event has occurred which has resulted or is reasonably likely
to result in any material liability to the PBGC or to any other Person.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code and/or Section 601 of ERISA, neither Holdings nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of Holdings or any of its Subsidiaries, except to the extent that the
provision of such benefits would not have a Material Adverse Effect.
D. No Pension Plan has an Unfunded Current Liability in an amount that
would have a Material Adverse Effect.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the loan transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
5.13 Environmental Protection.
(i) The operations of Holdings and each of its Subsidiaries (including,
without limitation, all operations and conditions at or in the Facilities)
comply in all material respects with all Environmental Laws;
(ii) Holdings and each of its Subsidiaries have obtained all material
Governmental Authorizations under Environmental Laws necessary to their
respective operations, and all such Governmental Authorizations are in good
standing, and Holdings and each of its Subsidiaries are in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) Neither Holdings nor any of its Subsidiaries has received (a) any
notice or claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials or (b) any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9604) or comparable
state laws, and, to the best knowledge of Company, none of the operations of
Holdings or any of its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any Hazardous Materials at any
Facility or at any other location;
(iv) None of the operations of Holdings or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging the violation of
or liability under any Environmental Laws which could reasonably be expected to
have a Material Adverse Effect;
(v) To the knowledge of Company, neither Holdings nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order or agreement with any governmental authority or
private party relating to (a) any Environmental Laws or (b) any Environmental
Claims that could reasonably be expected to have a Material Adverse Effect;
(vi) Neither Holdings nor any of its Subsidiaries has any material
contingent liability in connection with any Release of any Hazardous Materials
by Holdings or any of its Subsidiaries;
(vii) Neither Holdings nor any of its Subsidiaries nor, to the knowledge
of Company, any predecessor of Holdings or any of its Subsidiaries has filed any
notice under any Environmental Law indicating past or present treatment or
Release of Hazardous Materials at any Facility, and none of Holdings' or any of
its Subsidiaries' operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent;
(viii) To the knowledge of Company, no Hazardous Materials exist on or
under any Facility in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and neither Holdings
nor any of its Subsidiaries has filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(ix) Neither Holdings nor any of its Subsidiaries nor, to the knowledge of
Company, any of their respective predecessors has disposed of any Hazardous
Materials in a manner that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(x) To the knowledge of Company, no underground storage tanks or surface
impoundments are on or at any Facility; and
(xi) To the knowledge of Company, no Lien in favor of any Person relating
to or in connection with any Environmental Claim has been filed or has been
attached to any Facility.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 Solvency.
Each Loan Party is, and Company and its Subsidiaries, taken as a whole,
are, and, upon the incurrence of any Obligations by any Loan Party on any date
on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 4.1L, 6.9 and 6.10 and
(ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Agents and Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Administrative Agent for filing (but not yet
filed) and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Administrative Agent pursuant to any
of the Collateral Documents or (ii) the exercise by Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO or the United States Copyright Office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, Regulation T, Regulation
U or Regulation X of the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to any Agent
by or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.
5.17 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Agents
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Seller's Warranties. Except to the extent otherwise set forth herein or
in the schedules hereto, to Holdings' and Company's knowledge each of the
representations and warranties given by Seller to Company in the Acquisition
Agreement is true and correct in all material respects as of the date hereof (or
as of any earlier date to which such representation and warranty specifically
relates) and will be true and correct in all material respects as of the Closing
Date (or as of such earlier date, as the case may be), in each case subject to
the qualifications set forth in the schedules to the Acquisition Agreement.
C. Warranties of Company. Subject to the qualifications and the schedules
set forth therein, each of the representations and warranties given by Company
to Seller in the Acquisition Agreement is true and correct in all material
respects as of the date hereof and will be true and correct in all material
respects as of the Closing Date.
D. Survival. Notwithstanding anything in the Acquisition Agreement to the
contrary, the representations and warranties of Company set forth in subsections
5.17B and 5.17C shall,
solely for purposes of this Agreement, survive the Closing Date for the benefit
of Agents and Lenders.
5.18 Disclosure.
The representations of Holdings and its Subsidiaries contained in the Loan
Documents, the Related Agreements and in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, when taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact (known to Holdings or the
applicable Subsidiary, in the case of any document not furnished by Holdings or
such Subsidiary) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There is no fact known (or which should upon
the reasonable exercise of diligence be known) to Company (other than matters of
a general economic nature) that has had, or could reasonably be expected to
result in, a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
5.19 Subordination of Seller Notes.
The subordination provisions of any Permitted Seller Notes are enforceable
against the holders thereof, and the Loans and other monetary Obligations
hereunder are and will be within the definition of "Senior Indebtedness"
included in such provisions.
SECTION 6.
AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to
Administrative Agent (and Administrative Agent will, after receipt thereof,
deliver to each Lender):
(i) Monthly Financials: (a) as soon as available after each fiscal
month-end ending after the Closing Date through and including February
1997, case volume and sales reports for each such fiscal month in
substantially the form presented to Agents prior to the Closing Date and
any monthly reports in the form of Exhibit 1 and Exhibit 2 to the
Transition Services Agreement prepared for such month pursuant to the
Transition Services Agreement, all in reasonable detail and certified by
the chief financial officer of Company as being fairly stated in all
material respects, and (b) as soon as available and in any event within 30
days (or 45 days, in the case of April and May of 1997) after each fiscal
month-end (other than June, September, December and March) commencing with
April 1997, the consolidated and consolidating statements of income
(through the "Earnings Before Tax" line) of Company and its Subsidiaries
for such fiscal month and for the period from the beginning of the then
current Fiscal Year to the end of such month, setting forth in each case
in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the
consolidated plan and financial forecast for the current Fiscal Year
delivered pursuant to subsection 6.1(xiii), all in reasonable detail and
certified by the chief financial officer of Company as being fairly stated
in all material respects, subject to changes resulting from audit and
normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, (a) the consolidated
and consolidating balance sheets of Company and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous fiscal year and the
corresponding figures from the consolidated plan and financial forecast
for the current Fiscal Year delivered pursuant to subsection 6.1(xiii),
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the previous
fiscal year and the corresponding figures from the consolidated plan and
financial forecast delivered pursuant to subsection 6.1(xiii) for the
Fiscal Year covered by such financial statements, all in reasonable detail
and certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form prepared for presentation to senior management for such Fiscal Year,
and (c) in the case of such consolidated financial statements, a report
thereon of independent certified public accountants of recognized national
standing selected by Company and reasonably satisfactory to Administrative
Agent, which report shall be unqualified as to the ability of Company and
its Subsidiaries to continue as a going concern and as to scope of audit,
and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of
Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officer's Certificate of
Company stating that the signer has reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer's Certificate,
of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7, in each case to the
extent compliance with such restrictions is required to be tested during
or at the end of the applicable accounting period;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial
statements that would have been delivered pursuant to such subdivisions
had no such change in accounting principles and policies been made, then
(a) together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal
Year in which such change is made, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or chief
financial officer of Company setting forth the differences which would
have resulted if such financial statements had been prepared without
giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon stating whether, in
connection with their audit examination, any condition or event, insofar
as such condition or event relates to the covenants set forth in
subsection 7.6, that constitutes an Event of Default or Potential Event of
Default has come to their attention and, if such a condition or event has
come to their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their audit
examination;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including, without limitation, any comment letter submitted by such
accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Holdings or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Holdings or any
of its Subsidiaries to the public concerning material developments in the
business of Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or taken
any other action with respect to a claimed default or event or condition
of the type referred to in subsection 8.2, (c) of any condition or event
that would be required to be disclosed in a current report filed by
Company with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the date hereof) if Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officer's
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Company has taken, is taking and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Holdings or any of its Subsidiaries or any property of Holdings
or any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or Administrative Agent any
material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within 45 days after the end of each Fiscal
Quarter, a schedule of all Proceedings involving an alleged liability of,
or claims against or affecting, Holdings or any of its Subsidiaries equal
to or greater than $250,000 and promptly after request by Administrative
Agent such other information as may be reasonably requested by
Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
any ERISA Event that could reasonably be expected to result in a material
liability, a written notice specifying the nature thereof, what action
Holdings or any of its ERISA Affiliates has taken, is taking or proposes
to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) all
written notices received by Holdings or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (b) such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than 60 days after the beginning of each Fiscal Year, a monthly
consolidated and consolidating plan and financial forecast for such Fiscal
Year, including, without limitation, (a) forecasted consolidated and
consolidating balance sheets and forecasted consolidated and consolidating
statements of income and cash flows of Company and its Subsidiaries for
such Fiscal Year, together with a pro forma Compliance Certificate for
such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, and (b) such other information and projections as
Administrative Agent may reasonably request;
(xiv) Insurance: upon request by Administrative Agent, as soon as
practicable and in any event by the last day of each Fiscal Year, a report
in form and substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such report by
Holdings and its Subsidiaries and all material insurance coverage planned
to be maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, with respect to significant environmental matters
at any Facility or which relate to an Environmental Claim which could
result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of Company;
(xvii) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company
and (b) all of the data required to be set forth in Schedule 5.1 annexed
hereto with respect to all Subsidiaries of Company (it being understood
that such written notice shall be deemed to supplement Schedule 5.1
annexed hereto for all purposes of this Agreement);
(xviii) Historical Financial Statements: as soon as available and in
any event no later than 45 days after the Closing Date, (a) unaudited
financial statements of the Business for the years ending December 31 of
1992 and 1993, consisting of statements
of operations for such years, and (b) unaudited financial statements of
the Business as of September 30, 1995, consisting of a statement of
operations for the nine-month period ending on such date, all in
reasonable detail and certified by the chief financial officer of Company
that they fairly present the financial condition of the Business at the
dates indicated and the results of its operations for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments; and
(xix) Other Information: with reasonable promptness, such other
information and data with respect to Holdings or any of its Subsidiaries
as from time to time may be reasonably requested by Administrative Agent.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to the
business of Holdings and its Subsidiaries (on a consolidated basis).
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes and all assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings timely instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company and its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under
similar circumstances by corporations of established reputation engaged in
similar businesses. Each such policy of casualty insurance covering damage to or
loss of property shall name Administrative Agent for the benefit of Agents and
Lenders as the loss payee thereunder for all losses, subject to application of
proceeds as required by subsection 2.4B(iii)(d), and shall provide for at least
30 days' prior written notice to Administrative Agent of any modification or
cancellation of such policy.
6.5 Inspection; Lender Meeting.
Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by any Agent or Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
its and their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their officers and independent public accountants, all upon
reasonable advance notice and at such reasonable times during normal business
hours and as often as may be reasonably requested. Without in any way limiting
the foregoing, Company will, upon the request of Administrative Agent,
participate in a meeting of Agents and Lenders once during each Fiscal Year to
be held at Company's corporate offices (or such other location as may be agreed
to by Company and Administrative Agent) at such time as may be agreed to by
Company and Administrative Agent.
6.6 Compliance with Laws, etc.
Company shall, and shall cause each of its Subsidiaries to, comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including all Pure Food and Drug Laws), noncompliance
with which could reasonably be expected to cause a Material Adverse Effect.
6.7 Environmental Disclosure and Inspection.
A. Company shall, and shall cause each of its Subsidiaries to, exercise
all due diligence in order to comply and cause (i) all tenants under any leases
or occupancy agreements affecting any portion of the Facilities and (ii) all
other Persons on or occupying such property, to comply with all Environmental
Laws.
B. Company agrees that Administrative Agent may, from time to time and in
its reasonable discretion, retain, at Company's expense, an independent
professional consultant to review any report relating to Hazardous Materials
prepared by or for Company and to conduct its own investigation of any Facility
currently owned, leased, operated or used by Company or any of its Subsidiaries,
and Company agrees to use all reasonable efforts to obtain permission for
Administrative Agent's professional consultant to conduct its own investigation
of any such Facility previously owned, leased, operated or used by Company or
any of its Subsidiaries. Company shall use its reasonable efforts to obtain for
Administrative Agent and its agents, employees, consultants and contractors the
right, upon reasonable notice to Company, to enter
into or on to the Facilities currently owned, leased, operated or used by
Company or any of its Subsidiaries to perform such tests on such property as are
reasonably necessary to conduct such a review and/or investigation. Any such
investigation of any Facility shall be conducted, unless otherwise agreed to by
Company and Administrative Agent, during normal business hours and, to the
extent reasonably practicable, shall be conducted so as not to interfere with
the ongoing operations at any such Facility or to cause any damage or loss to
any property at such Facility. Company and Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7B will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (i) it will
indemnify and hold harmless each Agent and Lender from any costs, losses or
liabilities relating to any Loan Party's use of or reliance on such report, (ii)
no Agent nor any Lender makes any representation or warranty with respect to
such report, and (iii) by delivering such report to Company, no Agent nor any
Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
C. Company shall promptly advise Administrative Agent in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state, local or foreign governmental or regulatory
agency under any applicable Environmental Laws, (ii) any and all written
communications with respect to any Environmental Claims that have a reasonable
possibility of giving rise to a Material Adverse Effect or with respect to any
Release of Hazardous Materials required to be reported to any federal, state or
local governmental or regulatory agency, (iii) any remedial action taken by
Company or any other Person in response to (x) any Hazardous Materials on, under
or about any Facility, the existence of which has a reasonable possibility of
resulting in an Environmental Claim having a Material Adverse Effect, or (y) any
Environmental Claim that could have a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could cause such Facility or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use thereof under any Environmental Laws, and (v) any request for information
from any governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for a Release
of Hazardous Materials.
D. Company shall promptly notify Administrative Agent of (i) any proposed
acquisition of stock, assets, or property by Company or any of its Subsidiaries
that could reasonably be expected to expose Company or any of its Subsidiaries
to, or result in, Environmental Claims that could have a Material Adverse Effect
or that could reasonably be expected to have a material adverse effect on any
Governmental Authorization then held by Company or any of its Subsidiaries and
(ii) any proposed action to be taken by Company or any of its Subsidiaries to
commence manufacturing, industrial or other similar operations that could
reasonably be expected to subject Company or any of its Subsidiaries to
additional laws, rules
or regulations, including, without limitation, laws, rules and regulations
requiring additional environmental permits or licenses.
E. Company shall, at its own expense, provide copies of such documents or
information as Administrative Agent may reasonably request in relation to any
matters disclosed pursuant to this subsection 6.7.
6.8 Company's Remedial Action Regarding Hazardous Materials.
Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on or under any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations unless the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. In
the event Company or any of its Subsidiaries takes any remedial action with
respect to any Hazardous Materials on or under any Facility, Company or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's or such
Subsidiary's liability for such presence, storage, use, disposal, transportation
or Release of any Hazardous Materials is being contested in good faith by
Company or such Subsidiary.
6.9 Execution of Subsidiary Guaranty and Subsidiary Security Agreements by
Subsidiaries and Future Subsidiaries.
In the event that any Person becomes a Subsidiary of Company after the
date hereof, Company will promptly notify Administrative Agent of that fact and
cause each such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty and the Pledge Agreement, the Security
Agreement and the Patent and Trademark Security Agreement (collectively, the
"Subsidiary Security Agreements"), and to take all such further actions and
execute all such further documents and instruments as may be required to grant
and perfect in favor of Administrative Agent, for the benefit of Lenders, a
First Priority security interest in all of the personal property assets of such
Subsidiary described in the Subsidiary Security Agreements. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Articles or Certificate of Incorporation
(or comparable constituent documents), together, if applicable, with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a copy, if applicable, of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant corporate secretary as of a
recent date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the incumbency and signatures of the officers of such Subsidiary executing the
Subsidiary Guaranty and to which such Subsidiary is a party and (b) the fact
that the attached resolutions of the Board of Directors of such Subsidiary
authorizing the execution, delivery and performance of the Subsidiary Guaranty
and the Subsidiary Security
Agreements to which such Subsidiary is a party are in full force and effect and
have not been modified or rescinded, and (iv) a favorable opinion of counsel to
such Subsidiary, in form and substance satisfactory to Administrative Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of the Subsidiary Guaranty and the Subsidiary Security Agreements to which such
Subsidiary is a party, (c) the enforceability of the Subsidiary Guaranty and the
Subsidiary Security Agreements to which such Subsidiary is a party against such
Subsidiary, and (d) such other matters as Administrative Agent may reasonably
request, all of the foregoing to be reasonably satisfactory in form and
substance to Administrative Agent and its counsel.
6.10 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.
A. Conforming Leasehold Interests. If Company or any of its Subsidiaries
acquires any Leasehold Property, Company shall, or shall cause such Subsidiary
to, use its best efforts (without requiring Company or such Subsidiary to
relinquish any material rights or incur any material obligations or to expend
more than a nominal amount of money over and above the reimbursement, if
required, of the landlord's out-of-pocket costs, including attorneys fees) to
cause such Leasehold Property to be a Conforming Leasehold Interest.
B. Additional Mortgages, Etc. From and after the Closing Date, in the
event that (i) Company or any Subsidiary Guarantor acquires any fee interest in
real property or any Leasehold Property or (ii) at the time any Person becomes a
Subsidiary Guarantor, such Person owns or holds any fee interest in real
property or any Leasehold Property, in either case excluding any such Real
Property Asset the encumbrancing of which requires the consent of any applicable
lessor or (in the case of clause (ii) above) then-existing senior lienholder,
where Company and its Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent (any such non-excluded Real Property Asset described in the
foregoing clause (i) or (ii) being a "Mortgaged Property"), Company or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Mortgaged Property or becomes a
Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such
Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Mortgage and such other matters as Administrative Agent
may reasonably request, and (b) if required by Administrative Agent, an
opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) in the state in which such Mortgaged Property is
located with respect to the enforceability of the form of Mortgage to be
recorded in such state and such other matters (including any matters
governed by the laws of such state
regarding personal property security interests in respect of any
Collateral) as Administrative Agent may reasonably request, in each case
in form and substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of a Mortgaged Property consisting of a Leasehold Property, (a) a
Landlord Consent and Estoppel and (b) evidence that such Leasehold
Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (a "Mortgage Policy") issued by the Title Company with respect to
such Mortgaged Property, in an amount satisfactory to Administrative
Agent, insuring fee simple title to, or a valid leasehold interest in,
such Mortgaged Property vested in such Loan Party and assuring
Administrative Agent that such Mortgage creates a valid and enforceable
First Priority mortgage Lien on such Mortgaged Property, subject only to a
standard survey exception, which Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances under this Agreement
and for any other matters reasonably requested by Administrative Agent and
(2) shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to Administrative Agent; and (b)
evidence satisfactory to Administrative Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Mortgage Policy
and (ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Mortgage Policy and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Mortgage in the appropriate real estate records;
(v) Title Report. If no Mortgage Policy is required with respect to
such Mortgaged Property, a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the date such
Mortgage is to be recorded and satisfactory in form and substance to
Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Mortgage Policy or title report delivered pursuant to clause (v) or
(vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Mortgaged Property is a Flood
Hazard Property and (2) if so, whether the community in which such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Mortgaged Property is a Flood Hazard
Property, such Loan Party's written acknowledgement of receipt of written
notification from Administrative Agent (1) that such Mortgaged Property is
a Flood Hazard Property
and (2) as to whether the community in which such Flood Hazard Property is
located is participating in the National Flood Insurance Program, and (c)
in the event such Mortgaged Property is a Flood Hazard Property that is
located in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect of
such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System; and
(viii) Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any environmental hazards
or liabilities to which Company or any of its Subsidiaries may be subject
with respect to such Mortgaged Property.
6.11 Further Assurances.
At any time or from time to time upon the request of Administrative Agent,
Company will, at its expense, promptly execute, acknowledge and deliver such
further documents and do such other acts and things as Administrative Agent may
reasonably request in order to effect fully the purposes of the Loan Documents
and to provide for payment of the Obligations in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. In furtherance and not
in limitation of the foregoing, each of Holdings and Company shall take, and
cause each of its Subsidiaries to take, such actions as Administrative Agent may
reasonably request from time to time (including, without limitation, the
execution and delivery of guaranties, security agreements, pledge agreements,
Mortgages, stock powers, financing statements and other documents, the filing or
recording of any of the foregoing, title insurance with respect to any of the
foregoing that relates to an interest in real property, the delivery of stock
certificates and other collateral with respect to which perfection is obtained
by possession, and the obtaining of Collateral Access Agreements, in form and
substance satisfactory to Administrative Agent, executed by any Person which is
party to a co-packing agreement with Company or any of its Subsidiaries under
which equipment of Company or its Subsidiaries is maintained at a facility of
such Person) to ensure that the Obligations are guarantied by Holdings and
Subsidiary Guarantors and are secured by substantially all of the assets of
Company and its Subsidiaries and all of the capital stock of Company and
Subsidiary Guarantors. In the event that Company or any of its Subsidiaries
creates a new Subsidiary, all of the capital stock or partnership interests of
such new Subsidiary shall be duly and validly pledged to Administrative Agent
for the benefit of Agents and Lenders pursuant to the Collateral Documents,
subject to no other Liens.
SECTION 7.
NEGATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Holdings and Company, as applicable, shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon
any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished
(other than any such Indebtedness corresponding to extinguished Contingent
Obligations permitted under subsections 7.4(i)(b) and (c));
(iii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness (a) under Capital Leases capitalized on the
consolidated balance sheet of Company as liabilities, (b) in respect of
sale and lease-back transactions expressly permitted under subsection 7.8
and (c) secured by Liens permitted under subsection 7.2A(iii); provided
that the aggregate amount of Indebtedness permitted under this clause
(iii) shall not exceed $5,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its domestic Wholly Owned Subsidiaries, and any
domestic Wholly Owned Subsidiary of Company may become and remain liable
with respect to Indebtedness to Company or any other domestic Wholly Owned
Subsidiary of Company, provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes, (b) all such
intercompany Indebtedness owed by Company to any of its respective
Subsidiaries shall be subordinated in right of payment to the payment in
full of the Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, in each case in form and
substance satisfactory to Administrative Agent, and (c) any payment by
Company or by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by Company or by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;
(v) Company may become and remain liable with respect to
Indebtedness under the Subordinated Bridge Loan Documents and under the
Subordinated Exchange Note Documents;
(vi) Company may become and remain liable with respect to
Indebtedness the proceeds of which are applied to refinance all or a
portion of the Term Loans, the Acquisition Revolving Loans, the
Subordinated Bridge Loans and the Subordinated Exchange Notes; provided,
that such Indebtedness shall be subordinated in right of payment to the
Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and
other material terms which taken as a whole are no less favorable to
Company, its Subsidiaries and Lenders than the corresponding terms of the
Subordinated Bridge Loan Documents and the Subordinated Exchange Note
Documents, with interest payable thereon in amounts consistent with the
then prevailing rate in the market for comparable debt Securities;
(vii) Company may become and remain liable with respect to Permitted
Seller Notes; provided that the aggregate principal amount of such
Permitted Seller Notes issued after the Closing Date shall not exceed
$10,000,000; and
(viii) Holdings may become and remain liable with respect to
Indebtedness to Company in respect of advances permitted under subsection
7.3(vi); provided that (a) the aggregate principal amount of such
Indebtedness shall not exceed the amount of such advances, (b) all such
Indebtedness shall be evidenced by promissory notes, and (c) any payment
by Holdings under the Holdings Guaranty or any other guaranty of the
Obligations shall result in a pro tanto reduction of the amount of such
Indebtedness owed by Holdings to Company; and
(ix) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed at any time outstanding $5,000,000.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Holdings and Company shall not, and shall not
permit any of their respective Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement, or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted by subsection
7.1(iii)(c) incurred (a) to finance the acquisition, construction or
improvement of any tangible personal property assets, provided that (1)
such Liens shall be created within 180 days after the acquisition,
construction or improvement of such assets, and (2) the principal amount
of Indebtedness secured by any such Liens shall at no time exceed 100%,
and the proceeds of such Indebtedness shall be used to provide not less
than 80%, of the original purchase price of such asset or the amount
expended to construct or improve such asset, as the case may be; or (b) to
renew, extend or refinance any Indebtedness described in clause (a),
provided that the amount of any such Indebtedness does not exceed the
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; provided, that in the case of clause (a) or (b) such Liens
attach solely the assets financed with such Indebtedness;
(iv) Liens on any asset securing Indebtedness permitted by Section
7.1(iii)(b); provided that (a) the proceeds of such Indebtedness shall be
at least equal to 80% of the fair market value (as determined in good
faith by the Board of Directors, or any duly authorized committee thereof,
of Company) of such asset and (b) at the time of incurrence of such
Indebtedness, no Event of Default shall have occurred and be continuing or
would result therefrom; and
(v) Other Liens on assets of Company and its Subsidiaries securing
Indebtedness in an aggregate amount not to exceed $2,500,000 at any time
outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any consensual Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Company nor any
of its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by Company
or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed
by such Subsidiary to Company or any other Subsidiary of Company, (iii) make
loans or advances to Company or any other Subsidiary of Company, or (iv)
transfer any of its property or assets to Company or any other Subsidiary of
Company.
7.3 Investments; Joint Ventures.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Holdings may continue to own the Investments owned by it as of
the Closing Date (after giving effect to the Acquisition) in Company;
(iii) Company and its Subsidiaries may make intercompany loans to
the extent permitted under subsection 7.1(iv);
(iv) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.6D;
(v) Company and its Subsidiaries may make and own Investments in
connection with a Permitted Acquisition;
(vi) Company may make advances to Holdings, in lieu of the payment
of cash dividends, to enable Holdings to make the payments contemplated by
subsections 7.5(vi)(a) and (b);
(vii) Company may make loans and advances to employees and directors
of Holdings or Company to purchase limited liability interests of MBW LLC,
provided that the aggregate amount of such loans and advances shall not
exceed $1,000,000 at any time outstanding; and
(viii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $2,500,000.
7.4 Contingent Obligations.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:
(i) Holdings and Subsidiaries of Company may become and remain
liable with respect to Contingent Obligations arising under (a) their
respective Guaranties, (b) the Subordinated Bridge Loan Guaranties, and
(c) guarantees of Indebtedness under the Subordinated Exchange Note
Documents or permitted under subsection 7.1(vi), provided that the
obligations of Holdings or such Subsidiaries under guarantees described in
this clause (c) shall be subordinated in right of payment to the
Obligations pursuant to documentation containing subordination provisions
and other material terms no less favorable to Company, its Subsidiaries
and Lenders than the corresponding terms of the Subordinated Bridge Loan
Guaranties;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements entered into with
Lenders or Affiliates of Lenders with respect to which the aggregate net
amount which Company would be liable to pay to counterparties thereunder
in the event all such Interest Rate Agreements were terminated at the time
of determination shall not exceed $2,500,000 at any time;
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in the ordinary course
of business in connection with Asset Sales or other sales of assets;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, landlords, customers,
franchisees and licensees of Company and its Subsidiaries in an aggregate
amount not to exceed at any time $250,000;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under food product futures arrangements
consistent with past practices of the Business and of any business
acquired under subsection 7.7(vii) for the supply of food products used in
the business of Company and its Subsidiaries; and
(vii) Company and its Subsidiaries may become and remain liable with
respect to other Contingent Obligations; provided that the maximum
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $250,000.
7.5 Restricted Junior Payments.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) Company
may make scheduled interest payments in respect
of (a) the Subordinated Bridge Loans in accordance with the terms of the
Subordinated Bridge Loan Agreement and (b) the Subordinated Exchange Notes in
accordance with the terms thereof and of the Subordinated Exchange Note
Indenture; provided, that to the extent the Subordinated Bridge Loan Agreement
and the Subordinated Exchange Note Indenture permit Company to pay interest
thereon or liquidated damages with respect thereto in like-kind instruments in a
principal amount equal to the amount of such interest or liquidated damages,
Company shall pay such interest or liquidated damages in such like-kind
instruments; (ii) Company may make Restricted Junior Payments to the extent
necessary to redeem or defease all or any portion of the Indebtedness under the
Subordinated Bridge Loan Documents with proceeds from the issuance of
Subordinated Exchange Notes; (iii) Company and/or Holdings, as applicable, may
make Restricted Junior Payments to the extent necessary to redeem or defease all
or any portion of the Indebtedness under the Subordinated Bridge Loan Documents
and the Subordinated Exchange Note Documents with proceeds from Indebtedness
permitted under subsection 7.1(vi) and/or an initial public offering of Holdings
Common Stock; (iv) Company may make scheduled interest payments in respect of
Permitted Seller Notes permitted under subsection 7.1(vii) in accordance with
the terms of such Permitted Seller Notes; (v) Company may make regularly
scheduled payments of interest in respect of any Subordinated Indebtedness in
accordance with the terms of, and only to the extent required by, and subject to
the subordination provisions contained in, the indenture or other agreement
pursuant to which such Subordinated Indebtedness was issued, as such indenture
or other agreement may be amended from time to time to the extent permitted
under subsection 7.12B; provided, that to the extent the terms of such
Subordinated Indebtedness permit Company to pay interest or liquidated damages
on such Subordinated Indebtedness in like-kind instruments in a principal amount
equal to the amount of such interest or liquidated damages, Company shall pay
such interest or liquidated damages with such like-kind instruments; (vi)
Company may make Restricted Junior Payments to Holdings (a) in an aggregate
amount not to exceed $250,000 in any Fiscal Year, to the extent necessary to
permit MBW LLC and Holdings to pay general administrative costs and expenses,
(b) to the extent necessary to permit Holdings to discharge the consolidated tax
liabilities of Holdings and its Subsidiaries, and (c) to the extent necessary to
permit Holdings or MBW LLC to pay transaction fees to the MDC Entities and/or
Dartford and/or Fenway in connection with acquisitions made after the Closing
Date in accordance with the terms of the MDC Advisory Services Agreement, the
Dartford Management Agreement and the Fenway Agreement, in each case so long as
Holdings or MBW LLC applies the amount of any such Restricted Junior Payments
for such purposes; (vii) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be caused thereby,
Company and Holdings may make Restricted Junior Payments in an aggregate amount
not to exceed $2,000,000 to permit MBW LLC to repurchase limited liability
interests in MBW LLC or Holdings to repurchase Holdings Common Stock from
officers, directors or employees of MBW LLC or any of its Subsidiaries or from
Dartford following termination of employment of any such officer, director or
employee by reason of death, disability, retirement or resignation or following
other events customarily requiring or permitting such repurchase, in each case
so long as MBW LLC or Holdings, as applicable, applies the amount of any such
Restricted Junior Payment for such purpose; and (viii) so long as (x) no Event
of Default or Potential Event of Default shall have occurred and be continuing
or shall be caused thereby, (y) Company shall be in compliance, on a pro forma
basis giving effect
thereto, with the covenants set forth in subsection 7.6 hereof and (z) the
Leverage Ratio (calculated on a pro forma basis giving effect thereto) shall not
be greater than 3.50:1.00 (and Company shall have delivered to Administrative
Agent an Officer's Certificate (together with supporting information therefor),
in form and substance reasonably satisfactory to Administrative Agent,
certifying to the effect of clauses (y) and (z)), Company and Holdings may make
Restricted Junior Payments to the extent necessary to permit MBW LLC to
repurchase limited partnership interests from Dartford upon Dartford's exercise
of the Company Repurchase Option (as such term is defined in the MBW LLC
Agreement) as such option is in effect as of the Closing Date, in each case so
long as MBW LLC applies the amount of such Restricted Junior Payments for such
purposes.
7.6 Financial Covenants.
A. Minimum Consolidated Cash Interest Coverage Ratio. Holdings and Company
shall not permit the Consolidated Cash Interest Coverage Ratio for any
four-Fiscal Quarter period ending during any of the test periods set forth in
the table below to be less than the correlative ratio for such test period set
forth in the table below:
===============================================================
MINIMUM CONSOLIDATED
TEST PERIOD CASH INTEREST
COVERAGE RATIO
===============================================================
1/01/97 - 12/31/97 1.60:1.00
---------------------------------------------------------------
1/01/98 - 12/31/98 1.75:1.00
---------------------------------------------------------------
1/01/99 - 12/31/99 1.90:1.00
---------------------------------------------------------------
1/01/00 - 12/31/00 2.00:1.00
---------------------------------------------------------------
1/01/01 - 12/31/01 2.25:1.00
---------------------------------------------------------------
1/01/02 - 12/31/02 2.50:1.00
===============================================================
B. Maximum Leverage Ratio. Holdings and Company shall not permit the ratio
of (i) the excess of (a) Consolidated Total Debt as of the last day of any
Fiscal Quarter ending during any of the test periods set forth in the table
below minus (b) cash on hand of Company to the extent the amount of such cash
exceeds $3,500,000 as of such date, to (ii) Consolidated EBITDA for the
four-Fiscal Quarter period ending on such date to exceed the correlative ratio
for such test period set forth in the table below:
===============================================================
MAXIMUM
TEST PERIOD LEVERAGE RATIO
===============================================================
1/01/97 - 12/31/97 5.75:1.00
---------------------------------------------------------------
1/01/98 - 12/31/98 5.25:1.00
---------------------------------------------------------------
1/01/99 - 12/31/99 5.00:1.00
---------------------------------------------------------------
1/01/00 - 12/31/00 4.50:1.00
---------------------------------------------------------------
1/01/01 - 12/31/01 4.00:1.00
---------------------------------------------------------------
1/01/02 - 12/31/02 4.00:1.00
===============================================================
C. Minimum Fixed Charge Coverage Ratio. Holdings and Company shall not
permit the ratio of (i) Consolidated EBITDA for any four-Fiscal Quarter period
ending during any of the test periods set forth in the table below to (ii)
Consolidated Fixed Charges for such four-Fiscal Quarter period to be less than
the correlative ratio for such test period set forth in the table below:
===============================================================
MINIMUM
TEST PERIOD FIXED CHARGE COVER-
AGE
RATIO
===============================================================
1/01/97 - 12/31/97 1.25:1.00
---------------------------------------------------------------
1/01/98 - 12/31/98 1.35:1.00
---------------------------------------------------------------
1/01/99 - 12/31/99 1.40:1.00
---------------------------------------------------------------
1/01/00 - 12/31/00 1.50:1.00
---------------------------------------------------------------
1/01/01 - 12/31/01 1.55:1.00
---------------------------------------------------------------
1/01/02 - 12/31/02 1.65:1.00
===============================================================
D. Maximum Consolidated Capital Expenditures. Holdings and Company shall
not, and shall not permit any of their respective Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any (but in
no event more than 50% of the Maximum Consolidated Capital Expenditures Amount
for the previous Fiscal Year), of the Maximum Consolidated Capital Expenditures
Amount for the previous Fiscal Year over the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year:
===============================================================
MAXIMUM
FISCAL YEAR CONSOLIDATED CAPITAL
(OR PORTION THEREOF) EXPENDITURES AMOUNT
===============================================================
Fiscal Year ending in $1,000,000
December 1997
---------------------------------------------------------------
Fiscal Year ending in
December 1998 $1,000,000
and each Fiscal Year
thereafter
===============================================================
; provided, however, that for purposes of this subsection 7.6D, Consolidated
Capital Expenditures shall not include expenditures not exceeding $3,000,000 in
the aggregate incurred on or prior to June 30, 1998 (i) to relocate Company's
assets, (ii) to purchase computers and computer-related equipment and (iii) to
pay transition related expenses in connection with the foregoing.
E. Certain Calculations.
(i) With respect to calculations of Consolidated Fixed Charges,
Consolidated EBITDA and Consolidated Cash Interest Expense for any four-Fiscal
Quarter period including the Closing Date (each such period being a "Pro Forma
Calculation Period"), such calculations shall be made on a pro forma basis
assuming, in each case, (a) that the Closing Date, the Acquisition and the
related borrowings by Company pursuant to this Agreement and the Subordinated
Bridge Loan Agreement occurred on the first day of the applicable Pro Forma
Calculation Period; (b) that Consolidated EBITDA and Consolidated Capital
Expenditures for the applicable Fiscal Quarters ending prior to the Closing Date
are as set forth on Schedule 7.6E annexed hereto; and (c) that, with respect to
calculations of Consolidated Cash Interest Expense and each component of
Consolidated Fixed Charges other than Consolidated Capital Expenditures
(Consolidated Cash Interest Expense and each such component being, individually,
a "Fixed Charge Component"), the amount of each such Fixed Charge Component (1)
for the Pro Forma Calculation Period ending in March 1997 shall equal the
product of the amount of such Fixed Charge Component for the Fiscal Quarter
ending in March 1997 multiplied by 4, (2) for the Pro Forma Calculation Period
ending in June 1997 shall equal the product of the amount of such Fixed Charge
Component for the two-Fiscal Quarter period ending in June 1997 multiplied by 2,
and (3) for the Pro Forma Calculation Period ending in September 1997 shall
equal the product of the amount of such Fixed Charge Component for the
three-Fiscal Quarter period ending in June 1997 multiplied by 4/3; provided,
however, that if the Term Loan Conversion occurs, Consolidated Cash Interest
Expense for such Pro Forma Calculation Period shall equal the sum of (x) actual
Consolidated Cash Interest Expense for the Fiscal Quarter in
which the Term Loan Conversion Date occurs and each Fiscal Quarter ending after
the Closing Date but prior to the Term Loan Conversion Date plus (y) for each
Fiscal Quarter ending during such Pro Forma Calculation Period but prior to the
Closing Date, an amount of pro forma interest accrued calculated by assuming
that all Indebtedness outstanding immediately after such Term Loan Conversion
was borrowed on the first day of such Pro Forma Calculation Period, that all
Loans outstanding were Eurodollar Rate Loans, that the applicable interest rate
for the Loans was the average effective interest rate on the Loans on the date
of determination, and that all other Indebtedness outstanding accrued interest
at the interest rates applicable thereto on the date of determination.
(ii) With respect to any period during which new Subsidiaries, assets or
businesses are acquired pursuant to subsection 7.7(vii), for purposes of
determining compliance with the financial covenants set forth in this subsection
7.6, Consolidated EBITDA and Consolidated Interest Expense shall be calculated
with respect to such periods and such Subsidiaries, assets or businesses on a
pro forma basis (including any pro forma expense and cost reductions calculated
on a basis consistent with Regulation S-X promulgated under the Securities Act)
using the historical financial statements of all entities or assets so acquired
or to be acquired and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated (i) as if such acquisition, and any
acquisitions which have been consummated during such period, and any
Indebtedness or other liabilities incurred in connection with any such
acquisition had been consummated or incurred at the beginning of such period
(and assuming that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans during such
period), and (ii) otherwise in conformity with certain procedures to be agreed
upon between Administrative Agent and Company, all such calculations to be in
form and substance satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, alter the corporate, capital or legal structure of
Holdings or any of its Subsidiaries, create any new Subsidiaries or enter into
any transaction of merger or consolidation, or liquidate, windup or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
sub-lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business, property or fixed
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise any part of the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person, except:
(i) Company may make the Acquisition on the Closing Date;
(ii) any Subsidiary of Company may be merged with or into Company or
any wholly owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any substantial part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to
Company or any wholly owned Subsidiary Guarantor; provided that, in the
case of such a merger, Company or such wholly owned Subsidiary Guarantor
shall be the continuing or surviving corporation;
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.6D;
(iv) Company and its Subsidiaries may acquire inventory, equipment
and other assets in the ordinary course of business;
(v) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof (determined in good faith by the
board of directors of Company);
(vi) Company and its Subsidiaries may make any Asset Sale of assets
that have, in the aggregate, a fair market value (determined in good faith
by the board of directors of Company) not in excess of 10% of Consolidated
EBITDA for the four-Fiscal Quarter period most recently ended prior to
such Asset Sale; provided that (x) the consideration received for such
assets shall be in an amount at least equal to the fair market value
thereof (determined in good faith by the board of directors of Company);
(y) not less than 80% of the consideration received shall be cash; and (z)
the proceeds of such Asset Sales shall be applied as required by
subsection 2.4B(iii)(a); and
(vii) At any time and from time to time after Company shall have
refinanced all outstanding Indebtedness under the Subordinated Bridge Loan
Documents and under the Subordinated Exchange Note Documents with the
proceeds of Indebtedness permitted under subsection 7.1(vi), Company or
any Subsidiary of Company may make acquisitions of assets and businesses
(including acquisitions of the capital stock or other equity interests of
another Person), provided that:
(a) immediately prior to and after giving effect to any such
acquisition, Company and its Subsidiaries shall be in compliance
with the provisions of subsection 7.11 hereof;
(b) after giving effect to any such acquisition, the sum of
(x) the amount of cash on hand of Company plus (y) the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments, shall equal or exceed $7,500,000;
(c) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, (2) if any such acquisition is made
prior to the first Anniversary, the Leverage Ratio (calculated on a
pro forma basis giving effect to the proposed
acquisition) shall not be greater than the ratio set forth in
subsection 7.6B applicable at the time of such acquisition minus
0.25, (3) Consolidated EBITDA attributable to any assets so
acquired, as projected by Company for the twelve-month period
immediately following the date of such acquisition, shall not exceed
25% of Consolidated EBITDA for the four-Fiscal Quarter period most
recently ended prior to the date of such acquisition, and (4) no
Event of Default or Potential Event of Default shall have occurred
and be continuing at the time of such acquisition or shall be caused
thereby; and Company shall have delivered to Administrative Agent an
Officer's Certificate (together with supporting information
therefor), in form and substance reasonably satisfactory to
Administrative Agent, certifying as to the foregoing;
(d) any assets acquired pursuant to such acquisition shall be
subject to a First Priority Lien in favor of the Administrative
Agent on behalf of Lenders pursuant to the Collateral Documents; and
(e) each such acquisition shall be made on a fully consensual
basis between Company and its Subsidiaries, on the one hand, and the
seller or sellers of such assets or such business, on the other
hand.
7.8 Sales and Lease-Backs.
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Company or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by Company or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease, except that Company and its
Subsidiaries may enter into such sale and lease-back transactions so long as the
aggregate sales price under all such transactions in any Fiscal Year does not
exceed $2,500,000.
7.9 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
shall not apply to (i) any transaction between Company and any of its Wholly
Owned Subsidiaries or between any of its Wholly Owned
Subsidiaries, (ii) reasonable and customary fees paid to members of the boards
of directors of Holdings and its Subsidiaries, (iii) any payment from Company to
Holdings expressly permitted under subsection 7.5, (iv) fees, expenses and other
amounts payable to the MDC Entities and Dartford on the Closing Date, (v) the
Management Fees, (vi) any employment agreement entered into by Holdings or any
of its Subsidiaries in the ordinary course of business, and (vii) any issuance
of capital stock of Holdings in connection with employment arrangements, stock
options and stock ownership plans of Holdings or any of its Subsidiaries entered
into in the ordinary course of business.
7.10 Disposal of Subsidiary Stock.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except as permitted under this
Agreement or the Collateral Documents or to qualify directors if required
by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except as permitted under this Agreement or the
Collateral Documents or to Company, another Wholly Owned Subsidiary of
Company, or to qualify directors if required by applicable law.
7.11 Conduct of Business.
Company shall not, and shall not permit any of its Subsidiaries to, engage
in any business other than (i) the businesses engaged in by Company and its
Subsidiaries on the Closing Date (after giving effect to the Acquisition) and
those food businesses which are reasonably related to such businesses, and (ii)
such other lines of business as may be consented to by Administrative Agent and
Requisite Lenders.
7.12 Amendments or Waivers of Certain Related Agreements; Amendments of
Documents Relating to Subordinated Indebtedness; Designation of
"Designated Senior Indebtedness"; Preferred Stock.
A. Amendments or Waivers of Certain Related Agreements. Neither Holdings
nor any of its Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any of the Acquisition Agreement, the
Assumption Agreement, the Warrant Agreement, the Warrant Escrow Agreement, the
Warrants, the MDC Advisory Services Agreement, the Dartford Management
Agreement, the Fenway Agreement or the Transition Agreements after the Closing
Date if such amendment or waiver would be adverse to Lenders without in each
case obtaining the prior written consent of Requisite Lenders to such amendment
or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
C. Designation of "Designated Senior Indebtedness". Company shall not
designate any Indebtedness as "Designated Senior Indebtedness" (as defined in
the Subordinated Bridge Loan Agreement or the Subordinated Exchange Note
Indenture, as applicable) for purposes of the Subordinated Bridge Loan Agreement
or the Subordinated Exchange Note Indenture, as applicable, without the prior
written consent of Requisite Lenders.
D. Preferred Stock. Without the prior written approval of Requisite
Lenders, neither Holdings nor Company shall amend, restate, supplement or
otherwise modify its Certificate of Incorporation if the effect of such
amendment, restatement, supplement or modification is to provide for the
issuance of any preferred stock of Company or of Holdings or the filing or
amendment of any certificate of designation with respect thereto.
7.13 Fiscal Year.
Holdings and Company shall not change their Fiscal Year-end from the last
Saturday of December.
SECTION 8.
EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of prepayment or
otherwise; failure by Company to pay when due any amount payable to an Issuing
Lender in reimbursement of any drawing
honored or payment made under a Letter of Credit; or failure by Company to pay
any interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due (a) any
principal of or interest on any Indebtedness (other than Indebtedness referred
to in subsection 8.1) in an individual principal amount of $500,000 or more or
any items of Indebtedness with an aggregate principal amount of $1,000,000 or
more or (b) any Contingent Obligation in an individual principal amount of
$500,000 or more or any Contingent Obligations with an aggregate principal
amount of $1,000,000 or more, in each case beyond the end of any grace period
provided therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) any evidence of any
Indebtedness in an individual principal amount of $500,000 or more or any items
of Indebtedness with an aggregate principal amount of $1,000,000 or more or any
Contingent Obligation in an individual principal amount of $500,000 or more or
any Contingent Obligations with an aggregate principal amount of $1,000,000 or
more or (b) any loan agreement, mortgage, indenture or other agreement relating
to such Indebtedness or Contingent Obligation(s), if in any case under this
clause (ii) the effect of such breach or default is to cause, or to permit the
holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee
on behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.4, 2.5 or 6.2 or Section 7 of this
Agreement; or
8.4 Breach of Warranty.
Any material representation, warranty, certification or other statement
made by MBW LLC or Holdings or any of its Subsidiaries in any Loan Document or
in any statement or certificate at any time given by MBW LLC or Holdings or any
of its Subsidiaries in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Company becoming
aware of such default or (ii) receipt by Company of notice from any Agent or
Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of MBW LLC, Holdings or Company or any of its
Subsidiaries (other than Immaterial Subsidiaries) in an involuntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree or order is not stayed; or
any other similar relief shall be granted under any applicable federal or state
law; or (ii) an involuntary case shall be commenced against MBW LLC, Holdings or
Company or any of its Subsidiaries (other than Immaterial Subsidiaries) under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over MBW
LLC, Holdings or Company or any of its Subsidiaries (other than Immaterial
Subsidiaries), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of MBW LLC, Holdings or Company or
any of its Subsidiaries (other than Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of MBW LLC, Holdings or Company or any of its Subsidiaries (other than
Immaterial Subsidiaries), and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) MBW LLC, Holdings or Company or any of its Subsidiaries (other than
Immaterial Subsidiaries) shall have an order for relief entered with respect to
it or commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or MBW
LLC, Holdings or Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall make any assignment for the benefit of creditors; or (ii)
MBW LLC, Holdings or Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of MBW LLC, Holdings or Company or any of its Subsidiaries (other
than Immaterial Subsidiaries) (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $500,000 or (ii) in
the aggregate at any time an amount in excess of $1,000,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against Holdings or
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Holdings or Company
or any of its Subsidiaries decreeing the dissolution or split up of Holdings or
Company or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in the
aggregate results in a Material Adverse Effect; or there shall exist an Unfunded
Current Liability, individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which there is no Unfunded Current Liability), which would have a Material
Adverse Effect; or
8.11 Change in Control.
(i) Prior to the consummation of any initial public offering of Holdings
Common Stock, MBW LLC shall cease to own directly 100% of the outstanding
capital stock of Holdings (other than Holdings Common Stock issued to employees
or directors of Holdings and its Subsidiaries pursuant to any employee stock
option or stock purchase plan or other employee benefit plan or to any Person
pursuant to the Warrant Agreement); or (ii) Holdings shall at any time cease to
own directly 100% of the outstanding capital stock of Company; or (iii) prior to
the consummation of any initial public offering of Holdings Common Stock, (a)
the MDC Entities, Dartford and Fenway shall at any time not own, in the
aggregate, at least 51% of the combined voting power of Company's voting
Securities; or (b) any Person (other than the MDC Entities, Dartford and
Fenway), including a "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act) which includes such Person, shall purchase or otherwise
acquire, directly or indirectly, beneficial ownership of Securities of Company
and, as a result of such purchase or acquisition, any Person (together with its
associates and Affiliates), shall directly or indirectly beneficially own in the
aggregate Securities representing more than 30% of the combined voting power of
Company voting Securities; or (iv) at any time after the consummation of any
initial public offering of Holdings Common Stock, (a) the MDC Entities, Dartford
and Fenway together shall own, directly or indirectly, in the aggregate, a
lesser percentage of the combined voting power of Company voting Securities than
any other holder, including a "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) which includes
such holder, of such voting Securities; (b) a majority of the members of the
Board of Directors of Company shall not be Continuing Directors; or (c) any
Person (other than the MDC Entities, Dartford and Fenway), including a "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) which
includes such Person, shall purchase or otherwise acquire, directly or
indirectly, beneficial ownership of Securities of Company and, as a result of
such purchase or acquisition, any Person (together with its associates and
Affiliates), shall directly or indirectly beneficially own in the aggregate
Securities representing more than 25% of the combined voting power of Company
voting Securities; or
8.12 Invalidity of Guaranties.
At any time after the execution and delivery thereof, any Guaranty of the
Obligations of Company, for any reason other than the satisfaction in full of
all Obligations, ceases to be in full force and effect or is declared to be null
and void (except with respect to the obligations thereunder of Immaterial
Subsidiaries of Company) or any Loan Party (other than Immaterial Subsidiaries
of Company) denies in writing that it has any further liability, including,
without limitation, with respect to future advances by Lenders, under any Loan
Document to which it is a party; or
8.13 Failure of Security.
Any Collateral Document shall, at any time, cease to be in full force and
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Obligations or
any other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void; or the validity or
enforceability thereof shall be contested in writing by any Loan Party; or Agent
shall not have or shall cease to have a valid security interest in any
Collateral purported to be covered thereby, perfected and with the priority
required by the relevant Collateral Document, for any reason other than the
failure of Agents or any Lender to take any action within its control, subject
only to Liens permitted under the applicable Collateral Documents; or
8.14 Failure to Consummate Acquisition.
The Acquisition shall not be consummated in accordance with this Agreement
and the applicable Related Agreements concurrently with the making of the
initial Loans, or the Acquisition shall be unwound, reversed or otherwise
rescinded in whole or in part for any reason; or
8.15 Termination or Breach of Certain Transition Agreements.
The Co-Pack Agreement or the Flavor Supply Agreement shall terminate for
any reason whatsoever or Seller shall fail to perform its obligations under any
such agreement and such
failure could reasonably be expected to result in a Material Adverse Effect,
and, in either case, Company shall not have made arrangements satisfactory to
Requisite Lenders for obtaining any services that are required to be provided by
Seller to Company under such agreement that are not being so provided as a
result of such termination or failure to perform; or
8.16 Conduct of Business By Holdings and MBW LLC.
(i) Holdings shall (a) engage in any business other than entering into and
performing its obligations under and in accordance with the Loan Documents and
Related Agreements to which it is a party and performing the transactions
contemplated thereby or permitted thereunder or (b) own any assets other than
(1) the capital stock of Company and (2) Cash and Cash Equivalents in an amount
not to exceed $50,000 at any one time for the purpose of paying general
operating expenses of Holdings; or (ii) MBW LLC shall (a) engage in any business
other than entering into and performing its obligations under and in accordance
with the MBW LLC Agreement and the Loan Documents to which it is a party or (b)
own any assets other than (1) the capital stock of Holdings and (2) Cash and
Cash Equivalents in an amount not to exceed $50,000 at any one time for the
purpose of paying general operating expenses of MBW LLC; or
8.17 Default Under Subordination Provisions.
Company or any guarantor of Subordinated Indebtedness shall fail to comply
with the subordination provisions contained in the Subordinated Bridge Loan
Agreement, the Subordinated Exchange Note Indenture or any other instrument,
indenture or agreement pursuant to which such Subordinated Indebtedness is
issued;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit) and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request of Requisite
Lenders, by written notice to Company, declare all or any portion of the amounts
described in clauses (a) through (c) above to be, and the same shall forthwith
become, immediately due and payable, and the obligation of each Lender to make
any Loan, the obligation of Administrative Agent to issue any Letter of Credit
and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Collateral Account Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph, if
at any time within 60 days after an acceleration of the Loans pursuant to such
paragraph Company shall pay all arrears of interest and all payments on account
of principal which shall have become due otherwise than as a result of such
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be made at the
election of Requisite Lenders and are not intended to benefit Company and do not
grant Company the right to require Lenders to rescind or annul any acceleration
hereunder or preclude Agents or Lenders from exercising any of the rights or
remedies available to them under any of the Loan Documents, even if the
conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
X. Xxxxx is hereby appointed Administrative Agent hereunder and under the
other Loan Documents and each Lender hereby authorizes Administrative Agent to
act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. CSI is hereby appointed Arranging Agent hereunder and under the
other Loan Documents and each Lender hereby authorizes Arranging Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. Each Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable. The provisions of
this Section 9 are solely for the benefit of Agents and Lenders and Company
shall have no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries. Upon the conclusion of the
Initial Period, all obligations of Arranging Agent hereunder shall terminate.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact
business as agent or trustee in such jurisdiction. It is recognized that in case
of litigation under this Agreement or any of the other Loan Documents, and in
particular in case of the enforcement of any of the Loan Documents, or in case
Administrative Agent deems that by reason of any present or future law of any
jurisdiction Administrative Agent may not exercise any of the rights, powers or
remedies granted herein or in any of the other Loan Documents or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each Agent to take
such action on such Lender's behalf and to exercise such powers hereunder and
under the other Loan Documents as are specifically delegated to such Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents, and
it may perform such duties by or through its agents or employees. No Agent
shall have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished by any Agent to Lenders or by or on behalf of Company and/or
its Subsidiaries to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall have no liability arising from
confirmations of the amount of outstanding Loans or the Total Utilization of
Revolving Loan Commitments or the component amounts thereof.
C. Exculpatory Provisions. Neither any Agent nor any of such Agent's
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by such Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. If any Agent shall request instructions from Lenders with
respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from Requisite Lenders (or
such other Lenders as may be required to give such instructions under subsection
10.6). Without prejudice to the generality of the foregoing, (i) such Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against such Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Such Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under this Agreement or any of
the other Loan Documents unless and until it has obtained the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Each Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company and/or its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or, except as expressly provided elsewhere in this Agreement, to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
9.5 Successor Agents and Swing Line Lender.
A. Successor Agents. Any Agent may resign at any time by giving 30 days'
prior written notice thereof to the other Agents, Lenders and Company, and any
Agent may be removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to Company and Administrative Agent
and signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Agent. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent and the retiring or removed Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Chase or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 Collateral Documents.
Each Lender and Agent hereby further authorizes Administrative Agent to
enter into each Collateral Document as secured party on behalf of and for the
benefit of Agents and Lenders and agrees to be bound by the terms of each
Collateral Document; provided that Administrative Agent shall not enter into or
consent to any amendment, modification, termination or waiver of any provision
contained in any Collateral Document without the prior consent of Requisite
Lenders (or, if required pursuant to subsection 10.6, all Lenders); provided
further, however, that, without further written consent or authorization from
Requisite Lenders, Administrative Agent may execute any documents or instruments
necessary to effect the release of any asset constituting Collateral from the
Lien of the applicable Collateral Document in the event that such asset is sold
or otherwise disposed of in a transaction effected in accordance with subsection
7.7. Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
(including, without limitation, through the exercise of a right of set-off
against call deposits of such Lender in which any funds on deposit in the
Collateral
Account may from time to time be invested), it being understood and agreed that
all rights and remedies under the Collateral Documents may be exercised solely
by Administrative Agent for the benefit of Lenders in accordance with the terms
thereof.
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans, Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign, transfer or negotiate to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its Commitments
(together with its Letters of Credit or participations therein made or arising
pursuant to its Revolving Loan Commitment) or any Loan or Loans made by it or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided further, that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided further,
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided further, that anything
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or the
other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
of Credit, or participation therein or other Obligation may (a) be
assigned in any amount to another Lender who is a Non-Defaulting Lender,
or to an Affiliate of the assigning Lender or another Lender who, in
either such case, is a Non-Defaulting Lender, with the consent of
Administrative Agent (which consent shall not be unreasonably withheld)
and the giving of notice to Company; provided that, after giving effect to
a proposed assignment to another Lender, the assigning Lender shall have
an aggregate Commitment
of at least $5,000,000 unless the proposed assignment constitutes the
aggregate amount of the Commitments, Loans, Letters of Credit, and
participations therein and other Obligations of the assigning Lender, or
(b) be assigned in an aggregate amount of not less than $5,000,000 (or
such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit, and participations therein and
other Obligations of the assigning Lender) to any other Eligible Assignee
with the consent of Administrative Agent (which consent shall not be
unreasonably withheld) and the giving of notice to Company. To the extent
of any such assignment in accordance with either clause (a) or (b) above,
the assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans, Letters of Credit, or participations therein or
other Obligations or the portion thereof so assigned. The parties to each
such assignment shall execute and deliver to Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement,
together with a processing fee of $3,000 payable by the assigning Lender
and such certificates, documents or other evidence, if any, with respect
to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii) (a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration of
such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect the
Commitments of such assignee and any remaining Commitments of such
assigning Lender and, if any such assignment occurs after the issuance of
the Notes hereunder, the assigning Lender shall surrender its applicable
Notes and, upon such surrender, new Notes shall be issued to the assignee
and, if applicable, to the assigning Lender, substantially in the form of
Exhibit IV, Exhibit V or Exhibit VI annexed hereto, as the case may be,
with appropriate insertions, to reflect the new Commitments and/or
outstanding Term Loans of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing fee referred to in subsection 10.1B(i) and
any certificates, documents or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Administrative Agent pursuant to subsection
2.7B(iii) (a), Administrative Agent shall, if such Assignment Agreement
has been completed and is in substantially the form of Exhibit XV hereto
and if Administrative Agent have consented to the assignment evidenced
thereby (to the extent such consent is required pursuant to subsection
10.1B(i)), (a) accept such Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence any required
consent of Administrative Agent to such assignment), (b) record the
information contained therein in the Register, and (c) give prompt notice
thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in this
subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
(i) effecting the extension of the final maturity of the Loan allocated to such
participation, (ii) effecting a reduction of the principal amount of or
affecting the rate of interest payable on any Loan allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all of the Guarantors from their obligations under the
Guaranties, and all amounts payable by Company hereunder (including, without
limitation, amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as if such Lender had not sold such participation.
Company and each Lender hereby acknowledge and agree that, solely for purposes
of subsections 10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.20.
F. Limitation. No assignee, participant or other transferee or any
Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with Company's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
G. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and out
of pocket expenses of Administrative Agent in connection with the preparation of
the Loan Documents; (ii) all the actual and reasonable costs of furnishing all
opinions by counsel for Company (including, without limitation, any opinions
requested by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including, without limitation, with respect to confirming compliance with
environmental and insurance requirements; (iii) the reasonable fees, expenses
and disbursements of counsel to Agents (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans and any consents, amendments,
waivers or other modifications hereto or thereto and any other documents or
matters requested by Company; (iv) all other actual and reasonable costs and
expenses incurred by Agents in connection with the negotiation, preparation and
execution of the Loan Documents and the transactions contemplated hereby and
thereby; and (v) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Agents and Lenders in
enforcing any Obligations of or in collecting any payments due from Company
hereunder or under the other Loan Documents by reason of such Event of Default
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders,
and the officers, directors, trustees, partners, employees, agents, attorneys
and affiliates of any of Agents and Lenders (collectively called the
"Indemnitees") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including, without limitation, securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby (including, without limitation, Lenders'
agreement to make the Loans hereunder or the use or intended use of the proceeds
of any of the Loans or the issuance of Letters of Credit hereunder or the use or
intended use of any of the Letters of Credit) (collectively called the
"Indemnified Liabilities"); provided that Company shall not have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent, and only to the extent, of any particular liability, obligation, loss,
damage, penalty, claim, cost, expense or disbursement that arose from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default each Lender is hereby authorized by
Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender (at any office of that
Lender wherever located) to or for the credit or the account of Company against
and on account of the obligations and liabilities of Company to that Lender
under this Agreement, the Notes, the Letters of Credit and participations
therein, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
each Agent and Lender a security interest in all deposits and accounts
maintained with such Agent or Lender as security for the Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy, reorganization or insolvency proceeding of
Company or otherwise, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to such purchasing Lender ratably
to the extent of such recovery, but without interest. Company expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Company to that holder
with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
10.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to any departure by Company or any
other Loan Party therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: reduces the principal amount
of any of the Loans; changes in any manner the definition of "Requisite Lenders"
or "Pro Rata Share"; changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all
Lenders; postpones the scheduled final maturity date of any of the Loans;
postpones the date or reduces the amount of any scheduled payment (but not
prepayment) of principal of any of the Loans; postpones the date or reduces the
amount of any scheduled reduction of the Revolving Loan Commitments; postpones
the date on which any interest or any fees are payable; decreases the interest
rate borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.2E) or the
amount of any fees payable hereunder; increases the maximum duration of Interest
Periods permitted hereunder; releases all or
substantially all of the Collateral; releases Holdings from its obligations
under the Holdings Guaranty or releases all or substantially all of the
Subsidiary Guarantors from their obligations under the Subsidiary Guaranty;
reduces the amount or postpones the due date of any amount payable in respect
of, or extends the required expiration date of, any Letter of Credit; changes
the obligations of Lenders relating to the purchase of participations in Letters
of Credit in any manner that could be adverse to any Issuing Lender; or changes
in any manner the provisions contained in subsection 8.1 or this subsection
10.6; shall be effective only if evidenced by a writing signed by or on behalf
of all Lenders to whom are owed Obligations being directly affected by such
amendment, modification, termination, waiver or consent. In addition, (i) any
amendment, modification, termination or waiver of any of the provisions
contained in Section 4 shall be effective only if evidenced by a writing signed
by or on behalf of Administrative Agent and Requisite Lenders, (ii) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (iii) no amendment, modification, termination or waiver of
any provision of this Agreement which disproportionately and adversely affects
the obligation of any Loan Party to make payments (including without limitation
mandatory prepayments) to the holders of the Term Loans or the holders of the
Revolving Loans and Revolving Loan Commitments, shall be effective without the
written concurrence of the holders of 51% in principal amount of the class
(i.e., Term Loans or Revolving Loans and Revolving Loan Commitments each being a
"class" of Loans) of Loans so disproportionately and adversely affected; (iv) no
increase in the Commitments of any Lender over the amount thereof then in effect
shall be effective without the written concurrence of that Lender, it being
understood and agreed that in no event shall waivers or modifications of
conditions precedent, covenants, Events of Default, Potential Events of Default
or of a mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not be
deemed to constitute an increase in the Commitment of such Lender, (v) no
amendment, modification, termination or waiver of any provision of subsection
2.1A(iii) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender, (vi) no amendment, modification, termination
or waiver of any provision of Section 3 relating to the rights or obligations of
any or all Issuing Lenders shall be effective without the written concurrence of
Administrative Agent and each Lender who is an Issuing Lender with respect to
any Letter of Credit then outstanding, and (vii) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 10.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other amounts
due to be paid to such Lender with respect to all periods through such date of
termination, (ii) another financial institution satisfactory to Company and
Administrative Agent (or if Administrative Agent is also a Lender to be
terminated, the successor Administrative Agent) shall agree, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent (or if Administrative Agent is also a Lender to
be terminated, the successor Administrative Agent) to evidence the substitution
of such Lender shall have been received and approved by Administrative Agent as
of such date.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to Administrative
Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Company and Administrative Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn or paid thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other
kind of entity. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Holdings'
nor Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Holdings or Company without the prior written consent
of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH OF HOLDINGS AND COMPANY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEX-
CLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS OR COMPANY, AS APPLICABLE, AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER HOLDINGS OR COMPANY, AS
APPLICABLE, IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST HOLDINGS OR
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Company that in any event a Lender may make disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental agency or
representative thereof or pursuant to legal process or by the National
Association of Insurance Commissioners or in connection with the exercise of any
remedy under the Loan Documents; provided that, unless specifically prohibited
by applicable law or court order, each Lender shall notify Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY AND HOLDINGS: MBW FOODS INC.
By: /s/ Xxx Xxxxx
--------------------------------------
Executive Vice President
MBW HOLDINGS INC.
By: /s/ Xxx Xxxxx
--------------------------------------
Executive Vice President
Notice Address:
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(000) 000-0000
S-1
and a copy to:
Dartford Partnership L.L.C.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
and a copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
S-2
AGENT AND LENDERS: THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By: /s/ Xxxxx X. Xxxxx
Vice President
Notice Address:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Loan Servicing Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-3
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Title: Managing Director
Notice Address:
Fleet National Bank
One Xxxxxxx Xxxxxx, XXXXX00X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Fleet National Bank
One Xxxxxxx Xxxxxx, XXXXX00X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-4
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ C. Xxxxxx Xxxxxxxx
--------------------------------------
Title: Vice President
Notice Address:
Bank of Boston
Diversified Finance
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Assistant Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Bank of Boston
Commercial Loan Services
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Administrative Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-5
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Vice President
Notice Address:
Xxxxxx Financial
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-6
MARINE MIDLAND BANK
By: /s/ Xxxxxx XxXxxx
--------------------------------------
Title: Senior Vice President
Notice Address:
Midland Bank (New York)
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-7
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Title: Assistant Vice President
Notice Address:
PNC Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
PNC Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
X-0
XXXXXXXX XXXX, XXXXXXX
By: /s/ Xxxxxx X. XxXxxx
--------------------------------------
Title: Group Vice President
By: /s/ Xxxxx Xxxx
--------------------------------------
Title: Vice President
Notice Address:
Suntrust Bank, Atlanta
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Suntrust Bank, Atlanta
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Devyonne Aabeel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-9
XXXXX FARGO BANK, N.A.
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------
Vice President
Notice Address:
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-10
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of December __, 1996,
as amended, restated, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, restated, supplemented or otherwise
modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among MBW
Foods Inc., a Delaware corporation ("Company"), MBW Holdings Inc., a Delaware
corporation, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as administrative agent (in such capacity, "Administrative
Agent"), and Chase Securities Inc., as Arranging Agent, this represents
Company's request to borrow as follows:
1. Date of borrowing: ___________________, [199_] [200_]
2. Amount of borrowing: $___________________
3. Lender(s): |_| a. Lenders, in accordance with their applicable
Pro Rata Shares
|_| b. Swing Line Lender
4. Type of Loans: |_| a. Term Loans
|_| b. Revolving Loans
|_| c. Swing Line Loan
5. Interest rate option:(1) |_| a. Base Rate Loan(s)
|_| b. Eurodollar Rate Loans with an initial
Interest Period of ____________ month(s)
The proceeds of such Loans are to be deposited in Company's account at
Administrative Agent.
The undersigned officer, to the best of his or her knowledge, and Company
certify that:
----------
(1) Term Loans and Revolving Loans may be Base Rate Loans or Eurodollar
Rate Loans. Swing Line Loans shall be Base Rate Loans.
I-vii
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties were true and correct in
all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from
the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default; [and]
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof[; and][.]
[(iv) FOR REVOLVING LOANS: The amount of the proposed borrowing will
not cause the Total Utilization of Revolving Loan Commitments to exceed
the Revolving Loan Commitments.]
DATED: ____________________ MBW FOODS INC.
By: ______________________________________
Name:
Title:
I-viii
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of December __, 1996,
as amended, restated, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, restated, supplemented or otherwise
modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among MBW
Foods Inc., a Delaware corporation ("Company"), MBW Holdings Inc., a Delaware
corporation, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent, this represents Company's request to convert or continue Loans as
follows:
1. Date of conversion/continuation: __________________, [199_] [200_]
2. Amount of Loans being converted/continued: $___________________
3. Type of Loans being converted/continued:
|_| a. Term Loans
|_| b. Revolving Loans
4. Nature of conversion/continuation:
|_| a. Conversion of Base Rate Loans to Eurodollar Rate Loans
|_| b. Conversion of Eurodollar Rate Loans to Base Rate Loans
|_| c. Continuation of Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar Rate Loans, the
duration of the new Interest Period that commences on the conversion/
continuation date: _______________ month(s)
II-1
In the case of a conversion to or continuation of Eurodollar Rate Loans,
the undersigned officer, to the best of his or her knowledge, and Company
certify that no Event of Default or Potential Event of Default has occurred and
is continuing under the Credit Agreement.
DATED: ____________________ MBW FOODS INC.
By: ______________________________________
Name:
Title:
II-2
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of December __, 1996,
as amended, restated, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, restated, supplemented or otherwise
modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among MBW
Foods Inc., a Delaware corporation ("Company"), MBW Holdings Inc., a Delaware
corporation, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent, this represents Company's request for the issuance of a Letter of Credit
by Administrative Agent as follows:
1. Date of issuance of Letter of Credit: ________________, [199_] [200_]
2. Type of Letter of Credit:
|_| a. Commercial Letter of Credit
|_| b. Standby Letter of Credit
3. Face amount of Letter of Credit: $________________________
4. Expiration date of Letter of Credit: ________________, [199_] [200_]
5. Name and address of beneficiary:
___________________________________________
___________________________________________
___________________________________________
___________________________________________
6. Attached hereto is:
|_| a. the verbatim text of such proposed Letter of Credit
|_| b. a description of the proposed terms and conditions of such
Letter of Credit, including a precise description of any
documents to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of
such Letter of Credit, would require the Issuing Lender to make
payment under such Letter of Credit.
III-1
The undersigned officer, to the best of his or her knowledge, and Company
certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties were true and correct in
all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from
the issuance of the Letter of Credit contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof; and
(iv) The issuance of the proposed Letter of Credit will not cause
(a) the Letter of Credit Usage to exceed $5,000,000 or (b) the Total
Utilization of Revolving Loan Commitments to exceed the Revolving Loan
Commitments.
DATED: ____________________ MBW FOODS INC.
By: ______________________________________
Name:
Title:
III-2
EXHIBIT IV
[FORM OF TERM NOTE]
MBW FOODS INC.
PROMISSORY NOTE DUE DECEMBER 15, 2002
$(1) New York, New York
[Closing Date]
FOR VALUE RECEIVED, MBW FOODS INC., a Delaware corporation ("Company"),
promises to pay to(2) ("Payee") or its registered assigns the principal amount
of (3) ($[1]) in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of December __, 1996, by and among Company, MBW
Holdings Inc., a Delaware corporation, the financial institutions listed therein
as Lenders, The Chase Manhattan Bank, as administrative agent (in such capacity,
"Administrative Agent"), and Chase Securities Inc., as Arranging Agent (said
Credit Agreement, as it may be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
Company shall make principal payments on this Note in consecutive
quarterly installments as set forth in the Credit Agreement, commencing on March
15, 1997 and ending on December 15, 2002. Each such installment shall be due on
the date specified in the Credit Agreement and in an amount determined in
accordance with the provisions thereof; provided that the last such installment
shall be in an amount sufficient to repay the entire unpaid principal balance of
this Note, together with all accrued and unpaid interest thereon.
This Note is one of Company's "Term Notes" in the aggregate principal
amount of $15,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to
----------
(1) Insert amount of Lender's Term Loan in numbers.
(2) Insert Lender's name in capital letters.
(3) Insert amount of Lender's Term Loan in words.
IV-1
which reference is hereby made for a more complete statement of the terms and
conditions under which the Term Loan evidenced hereby was made and is to be
repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranties and is secured
pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
IV-2
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MBW FOODS INC.
By: ______________________________________
Name:
Title:
IV-3
EXHIBIT V
[FORM OF REVOLVING NOTE]
MBW FOODS INC.
PROMISSORY NOTE DUE DECEMBER 15, 2001
$(1) New York, New York
[Closing Date]
FOR VALUE RECEIVED, MBW FOODS INC., a Delaware corporation ("Company"),
promises to pay to the order of(2) ("Payee") or its registered assigns, on or
before December 15, 2001, the lesser of (x) (3) ($[1]) and (y) the unpaid
principal amount of all advances made by Payee to Company as Revolving Loans
under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of December __, 1996, by and among Company, MBW
Holdings Inc., a Delaware corporation, the financial institutions listed therein
as Lenders, The Chase Manhattan Bank, as administrative agent (in such capacity,
"Administrative Agent"), and Chase Securities Inc., as Arranging Agent (said
Credit Agreement, as it may be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Notes" in the aggregate principal
amount of $45,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Revolving Loans evidenced
hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the
----------
(1) Insert amount of Lender's Revolving Loan Commitment in numbers.
(2) Insert Lender's name in capital letters.
(3) Insert amount of Lender's Revolving Loan Commitment in words.
V-1
terms of the Credit Agreement. Unless and until an Assignment Agreement
effecting the assignment or transfer of this Note shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii) of the Credit Agreement, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loans evidenced hereby. Payee hereby agrees, by its acceptance hereof, that
before disposing of this Note or any part hereof it will make a notation hereon
of all principal payments previously made hereunder and of the date to which
interest hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Company hereunder with respect to payments of principal of or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranties and is secured
pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.
V-2
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MBW FOODS INC.
By: ______________________________________
Name:
Title:
V-3
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- -------------- ----------- -------
V-4
EXHIBIT VI
[FORM OF SWING LINE NOTE]
MBW FOODS INC.
PROMISSORY NOTE DUE DECEMBER 15, 2001
$2,000,000 New York, New York
[Closing Date]
FOR VALUE RECEIVED, MBW FOODS INC., a Delaware corporation ("Company"),
promises to pay to [NAME OF SWING LINE LENDER] ("Payee") or its registered
assigns, on or before December 15, 2001, the lesser of (x) TWO MILLION AND NO
DOLLARS ($2,000,000.00) and (y) the unpaid principal amount of all advances made
by Payee to Company as Swing Line Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of December __, 1996, by and among Company, MBW
Holdings Inc., a Delaware corporation, the financial institutions listed therein
as Lenders, The Chase Manhattan Bank, as administrative agent (in such capacity,
"Administrative Agent") and Chase Securities Inc., as Arranging Agent (said
Credit Agreement, as it may be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
This Note is Company's "Swing Line Note" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
VI-1
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranty and is secured
pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
[Remainder of page intentionally left blank]
VI-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
MBW FOODS INC.
By: ______________________________________
Name:
Title:
VI-3
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- --------- -------------- ----------- --------
VI-4
EXHIBIT VII
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of __________, [199__][200__]
by THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of MBW Foods Inc., a
Delaware corporation ("Company") (each such undersigned Subsidiary a "Guarantor"
and collectively, "Guarantors"; provided that after the date hereof, Guarantors
shall be deemed to include any Additional Guarantors (as hereinafter defined)),
in favor of and for the benefit of THE CHASE MANHATTAN BANK, as administrative
agent for and representative of (in such capacity herein called "Guarantied
Party") the financial institutions ("Lenders") party to the Credit Agreement
referred to below and any Interest Rate Exchangers (as hereinafter defined).
RECITALS
A. Company has entered into that certain Credit Agreement dated as of
December __, 1996 (said Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time, being the "Credit Agreement"; capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined) with MBW Holdings Inc., a Delaware corporation ("Holdings"),
Lenders, The Chase Manhattan Bank, as Administrative Agent, and Chase Securities
Inc., as Arranging Agent.
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreements (collectively, the "Lender
Interest Rate Agreements") with or one or more Lenders or their Affiliates (in
such capacity, collectively, "Interest Rate Exchangers") in accordance with the
terms of the Credit Agreement, and it is desired that the obligations of Company
under the Lender Interest Rate Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "Interest Rate
Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to Guarantors
and thus the Guarantied Obligations (as hereinafter defined) are being incurred
for and will inure to the benefit of Guarantors (which benefits are hereby
acknowledged).
D. It is a condition precedent to the making of the initial Loans under
the Credit Agreement that Company's obligations thereunder be guarantied by
Guarantors.
VII-1
E. Guarantors are willing irrevocably and unconditionally to guaranty such
obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, Guarantors hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"Beneficiaries" means Guarantied Party, Lenders and any Interest
Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term in
subsection 2.1.
"Guaranty" means this Subsidiary Guaranty dated as of __________,
[199__][200__], as it may be amended, restated, supplemented or otherwise
modified from time to time.
"payment in full", "paid in full" or any similar term means payment
in full of the Guarantied Obligations, including without limitation all
principal, interest, costs, fees and expenses (including without
limitation legal fees and expenses) of Beneficiaries as required under the
Loan Documents and the Lender Interest Rate Agreements.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions of this
Guaranty shall prevail.
VII-2
SECTION 2.
THE GUARANTY
2.1 Guaranty of the Guarantied Obligations.
Subject to the provisions of subsection 2.2(a), Guarantors jointly and
severally hereby irrevocably and unconditionally guaranty the due and punctual
payment in full of all Guarantied Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)). The term "Guarantied Obligations" is used herein in its most
comprehensive sense and includes:
(a) any and all Obligations of Company and any and all Interest Rate
Obligations, in each case now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or
not due, and however arising under or in connection with the Credit
Agreement and the other Loan Documents and the Lender Interest Rate
Agreements, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue the
Obligations of Company or from time to time renew them after they have
been satisfied and including interest which, but for the filing of a
petition in bankruptcy with respect to Company, would have accrued on any
Guarantied Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Limitation on Amount Guarantied; Contribution by Guarantors.
(a) Anything contained in this Guaranty to the contrary notwithstanding,
if any Fraudulent Transfer Law (as hereinafter defined) is determined by a court
of competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, the obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (i) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (ii) under
any guaranty of Subordinated Indebtedness which guaranty contains a limitation
as to maximum amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or
VII-3
contribution of such Guarantor pursuant to applicable law or pursuant to the
terms of any agreement (including without limitation any such right of
contribution under subsection 2.2(b)).
(b) Guarantors under this Guaranty and Holdings under the Holdings
Guaranty together desire to allocate among themselves (collectively, the
"Contributing Guarantors"), in a fair and equitable manner, their obligations
arising under this Guaranty and the Holdings Guaranty. Accordingly, in the event
any payment or distribution is made on any date by any Guarantor under this
Guaranty or Holdings under the Holdings Guaranty (a "Funding Guarantor") that
exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below) as of such date, with the result that
all such contributions will cause each Contributing Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such date. "Fair
Share" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Fair Share
Contribution Amount (as defined below) with respect to such Contributing
Guarantor to (y) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations guarantied. "Fair Share Shortfall" means,
with respect to a Contributing Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "Fair Share Contribution
Amount" means, with respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty or the Holdings Guaranty, as
applicable, determined as of such date, in the case of any Guarantor, in
accordance with subsection 2.2(a) or, if applicable, a similar provision
contained in the Holdings Guaranty; provided that, solely for purposes of
calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2(b), any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under subsection 2.2 of the Holdings Guaranty shall
not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or the Holdings Guaranty, as applicable
(including in respect of this subsection 2.2(b), or subsection 2.2 of the
Holdings Guaranty), minus (ii) the aggregate amount of all payments received on
or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this subsection 2.2(b) or subsection 2.2 of
the Holdings Guaranty. The amounts payable as contributions hereunder, under
subsection 2.2 of the Holdings Guaranty shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this subsection 2.2(b) or subsection 2.2 of the Holdings Guaranty
shall not be construed in any way to limit the liability of any Contributing
Guarantor hereunder or under the Holdings Guaranty. Holdings is a third party
beneficiary to the contribution agreement set forth in this subsection 2.2(b).
VII-4
2.3 Payment by Guarantors; Application of Payments.
Subject to the provisions of subsection 2.2(a), Guarantors hereby jointly
and severally agree, in furtherance of the foregoing and not in limitation of
any other right which any Beneficiary may have at law or in equity against any
Guarantor by virtue hereof, that upon the failure of Company to pay any of the
Guarantied Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including without
limitation interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in the related
bankruptcy proceeding) and all other Guarantied Obligations then owed to
Beneficiaries as aforesaid. All such payments shall be applied promptly from
time to time by Guarantied Party as provided in subsection 2.4D of the Credit
Agreement.
2.4 Liability of Guarantors Absolute.
Each Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guarantied Obligations. In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence
of an Event of Default under the Credit Agreement or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate and Currency Exchange Agreement in
the form prepared by the International Swap and Derivatives Association
Inc. or a similar event under any similar swap agreement) under any Lender
Interest Rate Agreement (either such occurrence being an "Event of
Default" for purposes of this Guaranty) notwithstanding the existence of
any dispute between Company and any Beneficiary with respect to the
existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are independent of
the obligations of Company under the Loan Documents or the Lender Interest
Rate Agreements and the obligations of any other guarantor (including any
other Guarantor or Holdings) of the obligations of Company under the Loan
Documents or the Lender Interest Rate Agreements, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or
not any action is brought against Company
VII-5
or any of such other guarantors and whether or not Company is joined in
any such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
any Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the foregoing,
if Guarantied Party is awarded a judgment in any suit brought to enforce
any Guarantor's covenant to pay a portion of the Guarantied Obligations,
such judgment shall not be deemed to release such Guarantor from its
covenant to pay the portion of the Guarantied Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guarantied Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor's
liability hereunder, from time to time may (i) renew, extend, accelerate,
increase the rate of interest on, or otherwise change the time, place,
manner or terms of payment of the Guarantied Obligations, (ii) settle,
compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guarantied Obligations and take and
hold security for the payment of this Guaranty or the Guarantied
Obligations; (iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guarantied Obligations, any
other guaranties of the Guarantied Obligations, or any other obligation of
any Person (including any other Guarantor or Holdings) with respect to the
Guarantied Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of such Beneficiary in respect of
this Guaranty or the Guarantied Obligations and direct the order or manner
of sale thereof, or exercise any other right or remedy that such
Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent with the Credit
Agreement or the applicable Lender Interest Rate Agreement and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Company or
any security for the Guarantied Obligations; and (vi) exercise any other
rights available to it under the Loan Documents or the Lender Interest
Rate Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other
than payment in full of the Guarantied
VII-6
Obligations), including without limitation the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge
of any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or enjoining,
by order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Loan Documents the Lender Interest Rate Agreements, at
law, in equity or otherwise) with respect to the Guarantied Obligations or
any agreement relating thereto, or with respect to the Holdings Guaranty
or any other guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
without limitation provisions relating to events of default) of the Credit
Agreement, any of the other Loan Documents, any of the Lender Interest
Rate Agreements or any agreement or instrument executed pursuant thereto,
or of the Holdings Guaranty or any other guaranty or security for the
Guarantied Obligations, in each case whether or not in accordance with the
terms of the Credit Agreement or such Loan Document, such Lender Interest
Rate Agreement or any agreement relating to the Holdings Guaranty or such
other guaranty or security; (iii) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Loan
Documents or any of the Lender Interest Rate Agreements or from the
proceeds of any security for the Guarantied Obligations, except to the
extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have elected to
apply such payment to any part or all of the Guarantied Obligations; (v)
any Beneficiary's consent to the change, reorganization or termination of
the corporate structure or existence of Company or any of its Subsidiaries
and to any corresponding restructuring of the Guarantied Obligations; (vi)
any failure to perfect or continue perfection of a security interest in
any collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations,
including, but not limited to, failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of any Guarantor as an obligor in respect of the
Guarantied Obligations.
2.5 Waivers by Guarantors.
Each Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment
or performance by such Guarantor, to (i) proceed against Company, any
other guarantor (including any other Guarantor [or Holdings) of the
Guarantied Obligations or any other Person, (ii) proceed against or
exhaust any security held from Company, any such other guarantor or any
other Person, (iii) proceed against or have resort to any balance of any
VII-7
deposit account or credit on the books of any Beneficiary in favor of
Company or any other Person, or (iv) pursue any other remedy in the power
of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including without
limitation any defense based on or arising out of the lack of validity or
the unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guarantied Obligations, except behavior which
amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any
legal or equitable discharge of such Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence
and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit
Agreement, the Lender Interest Rate Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of any
of the matters referred to in subsection 2.4 and any right to consent to
any thereof; and
(g) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
2.6 Guarantors' Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations have been paid in full and the
Commitments terminated, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case
VII-8
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including, without limitation, (a)
any right of subrogation, reimbursement or indemnification that such Guarantor
now has or may hereafter have against Company, (b) any right to enforce, or to
participate in, any claim, right or remedy that any Beneficiary now has or may
hereafter have against Company, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been paid
in full and the Commitments shall have terminated and all Letters of Credit
shall have expired or been cancelled, each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor or Holdings) of the Guarantied Obligations
(including without limitation any such right of contribution under subsection
2.2(b)). Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 Subordination of Other Obligations.
Any indebtedness of Company or any Guarantor now or hereafter held by any
Guarantor (the "Obligee Guarantor") is hereby subordinated in right of payment
to the Guarantied Obligations, and any such indebtedness collected or received
by the Obligee Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision of this Guaranty.
2.8 Expenses.
Guarantors jointly and severally agree to pay, or cause to be paid, on
demand, and to save Beneficiaries harmless against liability for, any and all
costs and expenses (including fees and disbursements of counsel and allocated
costs of internal counsel) incurred or expended by any Beneficiary in connection
with the enforcement of or preservation of any rights under this Guaranty.
VII-9
2.9 Continuing Guaranty.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled. Each Guarantor hereby irrevocably waives any right to revoke
this Guaranty as to future transactions giving rise to any Guarantied
Obligations.
2.10 Authority of Guarantors or Company.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of any Guarantor or Company or the officers, directors or any agents
acting or purporting to act on behalf of any of them.
2.11 Financial Condition of Company.
Any Loans may be granted to Company or continued from time to time, and
any Lender Interest Rate Agreement may be entered into from time to time, in
each case without notice to or authorization from any Guarantor regardless of
the financial or other condition of Company at the time of any such grant or
continuation or at the time such Lender Interest Rate Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Interest Rate Agreements, and each Guarantor assumes
the responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
2.12 Rights Cumulative.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents, any of the Lender Interest Rate Agreements
or any agreement between any Guarantor and any Beneficiary or Beneficiaries or
between Company and any Beneficiary or Beneficiaries. Any forbearance or failure
to exercise, and any delay by any Beneficiary in exercising, any right, power or
remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
VII-10
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty.
(a) So long as any Guarantied Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Guarantied Party acting pursuant to
the instructions of Requisite Obligees (as defined in subsection 3.14), commence
or join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Company. The obligations of Guarantors
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Company or by any defense which Company may have by reason of
the order, decree or decision of any court or administrative body resulting from
any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement of
any proceeding referred to in clause (a) above (or, if interest on any portion
of the Guarantied Obligations ceases to accrue by operation of law by reason of
the commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantors and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantors pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations are
paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 Notice of Events.
As soon as any Guarantor obtains knowledge thereof, such Guarantor shall
give Guarantied Party written notice of any condition or event which has
resulted in a breach of or noncompliance with any term, condition or covenant
contained herein.
2.15 Set Off.
In addition to any other rights any Beneficiary may have under law or in
equity, if any amount shall at any time be due and owing by any Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time upon the occurrence and during the continuation of any Event
of Default, without notice (any such notice being hereby expressly waived), to
set off and to appropriate and to apply any and all deposits (general
VII-11
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to such Guarantor and any other property
of such Guarantor held by any Beneficiary to or for the credit or the account of
such Guarantor against and on account of the Guarantied Obligations and
liabilities of such Guarantor to any Beneficiary under this Guaranty.
2.16 Discharge of Guaranty Upon Sale of Guarantor.
If all of the stock of any Guarantor or any of its successors in interest
under this Guaranty shall be sold or otherwise disposed of (including by merger
or consolidation) in an Asset Sale not prohibited by subsection 7.7 of the
Credit Agreement or otherwise consented to by Requisite Lenders, the Guaranty of
such Guarantor or such successor in interest, as the case may be, hereunder
shall automatically be discharged and released without any further action by any
Beneficiary or any other Person effective as of the time of such Asset Sale;
provided that, as a condition precedent to such discharge and release,
Guarantied Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Guarantied Party
of the applicable Net Cash Proceeds.
SECTION 3.
MISCELLANEOUS
3.1 Survival of Warranties.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Guaranty and the other Loan Documents and the
Lender Interest Rate Agreements and any increase in the Commitments under the
Credit Agreement.
3.2 Notices.
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, or upon receipt of
telefacsimile or telex (with received answerback) or three Business Days after
depositing it in the United States mail with postage pre-paid and properly
addressed; provided, notices to Guarantied Party shall not be effective until
received. For purposes hereof, the address of each party hereto shall be as set
forth under such party's name on the signature pages hereof or, as to any party,
such other address as shall be designated by such party in a written notice
delivered to the other parties hereto.
3.3 Severability.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
VII-12
3.4 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of this
Guaranty, and no consent to any departure by any Guarantor therefrom, shall in
any event be effective without the written concurrence of Guarantied Party and,
in the case of any such amendment or modification, each Guarantor against whom
enforcement of such amendment or modification is sought. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
3.5 Headings.
Section and subsection headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
3.6 Applicable Law; Rules of Construction.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Guaranty mutatis mutandis.
3.7 Successors and Assigns.
This Guaranty is a continuing guaranty and shall be binding upon each
Guarantor and its respective successors and assigns. This Guaranty shall inure
to the benefit of Beneficiaries and their respective successors and assigns. No
Guarantor shall assign this Guaranty or any of the rights or obligations of such
Guarantor hereunder without the prior written consent of all Lenders. Any
Beneficiary may, without notice or consent, assign its interest in this Guaranty
in whole or in part. The terms and provisions of this Guaranty shall inure to
the benefit of any transferee or assignee of any Loan, and in the event of such
transfer or assignment the rights and privileges herein conferred upon such
Beneficiary shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
3.8 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX
XX XXX XXXX. BY EXECUTING AND DELIVERING THIS GUARANTY, EACH GUARANTOR, FOR
VII-13
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED
IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GUARANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES
RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
3.9 Waiver of Trial by Jury.
EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH
BENEFICIARY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope
of this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each Guarantor
and, by its acceptance of the benefits hereof, each Beneficiary (i) acknowledges
that this waiver is a material inducement for such Guarantor and Beneficiaries
to enter into a business relationship, that such Guarantor and Beneficiaries
have already relied on this waiver in entering into this Guaranty or accepting
the benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY GUARANTIED
PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the
event of litigation, this Guaranty may be filed as a written consent to a trial
by the court.
VII-14
3.10 No Other Writing.
This writing is intended by Guarantors and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
3.11 Further Assurances.
At any time or from time to time, upon the request of Guarantied Party,
Guarantors shall execute and deliver such further documents and do such other
acts and things as Guarantied Party may reasonably request in order to effect
fully the purposes of this Guaranty.
3.12 Additional Guarantors.
The initial Guarantors hereunder shall be such of the Subsidiaries of
Company as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
parties hereto, as additional Guarantors (each an "Additional Guarantor") by
executing a counterpart of this Guaranty. Upon delivery of any such counterpart
to Administrative Agent, notice of which is hereby waived by Guarantors, each
such Additional Guarantor shall be a Guarantor and shall be as fully a party
hereto as if such Additional Guarantor were an original signatory hereof. Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder. This Guaranty
shall be fully effective as to any Guarantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Guarantor hereunder.
3.13 Counterparts; Effectiveness.
This Guaranty may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all purposes; but
all such counterparts together shall constitute but one and the same instrument.
This Guaranty shall become effective as to each Guarantor upon the execution of
a counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Guarantied Party
of written or telephonic notification of such execution and authorization of
delivery thereof.
3.14 Guarantied Party as Administrative Agent.
(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices,
VII-15
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action, solely in accordance with this Guaranty and the Credit
Agreement; provided that Guarantied Party shall exercise, or refrain from
exercising, any remedies hereunder in accordance with the instructions of (i)
Requisite Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Loan Documents, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Interest Rate Agreement)
under all Lender Interest Rate Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as "Requisite Obligees"). In furtherance
of the foregoing provisions of this subsection 3.14, each Interest Rate
Exchanger, by its acceptance of the benefits hereof, agrees that it shall have
no right individually to enforce this Guaranty, it being understood and agreed
by such Interest Rate Exchanger that all rights and remedies hereunder may be
exercised solely by Guarantied Party for the benefit of Beneficiaries in
accordance with the terms of this subsection 3.14.
(b) Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Guarantied Party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Guarantied Party's resignation or removal hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.
[Remainder of page intentionally left blank]
VII-16
IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
[GUARANTOR]
By: ______________________________________
Name:
Title:
Notice Address for the foregoing Guarantors:
___________________________
___________________________
___________________________
Attention: ______________
Facsimile: ______________
with a copy to:
XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(000) 000-0000
and a copy to:
Dartford Partnership L.L.C.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
VII-17
and a copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
VII-18
IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, [199_] [200_].
[NAME OF ADDITIONAL GUARANTOR]
By: ______________________________________
Name:
Title:
Notice Address:
___________________________
___________________________
___________________________
___________________________
VII-19
EXHIBIT VIII
[FORM OF HOLDINGS GUARANTY]
HOLDINGS GUARANTY
This HOLDINGS GUARANTY is entered into as of December __, 1996 by
MBW HOLDINGS INC., a Delaware corporation ("Guarantor"), in favor of and for the
benefit of THE CHASE MANHATTAN BANK, as agent for and representative of (in such
capacity herein called "Guarantied Party") the financial institutions
("Lenders") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined).
RECITALS
A. MBW Foods Inc., a Delaware corporation and a wholly-owned
subsidiary of Guarantor ("Company"), and Guarantor have entered into that
certain Credit Agreement dated as of December __, 1996 (said Credit Agreement,
as it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "Credit Agreement"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) with Lenders, The
Chase Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as
Arranging Agent.
B. Company may from time to time enter into one or more Interest
Rate Agreements (collectively, the "Lender Interest Rate Agreements") with or
one or more Lenders or their Affiliates (in such capacity, collectively,
"Interest Rate Exchangers") in accordance with the terms of the Credit
Agreement, and it is desired that the obligations of Company under the Lender
Interest Rate Agreements, including without limitation the obligation of Company
to make payments thereunder in the event of early termination thereof (all such
obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.
C. It is a condition precedent to the making of the initial Loans
under the Credit Agreement that Company's obligations thereunder be guarantied
by Guarantor.
D. Guarantor is willing irrevocably and unconditionally to guaranty
such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, Guarantor hereby agrees as follows:
VIII-1
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"Beneficiaries" means Guarantied Party, Lenders and any Interest
Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term in
subsection 2.1.
"Guaranty" means this Holdings Guaranty dated as of December __,
1996, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"payment in full", "paid in full" or any similar term means payment
in full of the Guarantied Obligations, including without limitation all
principal, interest, costs, fees and expenses (including without
limitation legal fees and expenses) of Beneficiaries as required under the
Loan Documents and the Lender Interest Rate Agreements.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions
of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations.
Guarantor hereby irrevocably and unconditionally guaranties the due and
punctual payment in full of all Guarantied Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. ss. 362(a)). The term "Guarantied Obligations" is used herein in
its most comprehensive sense and includes:
(a) any and all Obligations of Company and any and all Interest Rate
Obligations, in each case now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or
not due, and however arising under or in connection with the Credit
Agreement and the other Loan Documents and the
VIII-2
Lender Interest Rate Agreements, including those arising under successive
borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Company or from time to time renew them after
they have been satisfied and including interest which, but for the filing
of a petition in bankruptcy with respect to Company, would have accrued on
any Guarantied Obligations, whether or not a claim is allowed against
Company for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Contribution by Guarantor.
Guarantor under this Guaranty and each Subsidiary Guarantor under the
Subsidiary Guaranty, together desire to allocate among themselves (collectively,
the "Contributing Guarantors"), in a fair and equitable manner, their
obligations arising under this Guaranty and the Subsidiary Guaranty.
Accordingly, in the event any payment or distribution is made on any date by
Guarantor under this Guaranty or a Subsidiary Guarantor under the Subsidiary
Guaranty (a "Funding Guarantor") that exceeds its Fair Share (as defined below)
as of such date, that Funding Guarantor shall be entitled to a contribution from
each of the other Contributing Guarantors in the amount of such other
Contributing Guarantor's Fair Share Shortfall (as defined below) as of such
date, with the result that all such contributions will cause each Contributing
Guarantor's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "Fair Share" means, with respect to a Contributing Guarantor as of
any date of determination, an amount equal to (i) the ratio of (x) the Fair
Share Contribution Amount (as defined below) with respect to such Contributing
Guarantor to (y) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty and the Subsidiary Guaranty in respect of the obligations guarantied.
"Fair Share Shortfall" means, with respect to a Contributing Guarantor as of any
date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "Fair Share Contribution Amount" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty or
the Subsidiary Guaranty, as applicable, that would not render its obligations
hereunder or thereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law; provided that, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under subsection 2.2(b) of the Subsidiary Guaranty
shall not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or the Subsidiary Guaranty, as applicable
(including in respect of this subsection 2.2 or subsection 2.2(b) of the
Subsidiary Guaranty), minus (ii) the aggregate amount of all payments received
on or before
VIII-3
such date by such Contributing Guarantor from the other Contributing Guarantors
as contributions under this subsection 2.2 or subsection 2.2(b) of the
Subsidiary Guaranty. The amounts payable as contributions hereunder and under
subsection 2.2(b) of the Subsidiary Guaranty shall be determined as of the date
on which the related payment or distribution is made by the applicable Funding
Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this subsection 2.2 and subsection 2.2(b) of the Subsidiary
Guaranty shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder or under the Subsidiary Guaranty. Each
Subsidiary Guarantor is a third party beneficiary to the contribution agreement
set forth in this subsection 2.2.
2.3 Payment by Guarantor; Application of Payments.
Guarantor hereby agrees, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against Guarantor by virtue hereof, that upon the failure of Company to pay any
of the Guarantied Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.
362(a)), Guarantor will upon demand pay, or cause to be paid, in cash, to
Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to
the sum of the unpaid principal amount of all Guarantied Obligations then due as
aforesaid, accrued and unpaid interest on such Guarantied Obligations (including
without limitation interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on such Guarantied
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding) and all other Guarantied Obligations then
owed to Beneficiaries as aforesaid. All such payments shall be applied promptly
from time to time by Guarantied Party as provided in subsection 2.4D of the
Credit Agreement.
2.4 Liability of Guarantor Absolute.
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guarantied Obligations. In furtherance of the
foregoing and without limiting the generality thereof, Guarantor agrees as
follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence
of an Event of Default under the Credit Agreement or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate and Currency Exchange Agreement in
the form prepared by the International Swap and Derivatives Association
Inc. or a similar event under any similar swap agreement) under any Lender
Interest Rate Agreement (either such occurrence being an "Event of
VIII-4
Default" for purposes of this Agreement) notwithstanding the existence of
any dispute between Company and any Beneficiary with respect to the
existence of such Event of Default.
(c) The obligations of Guarantor hereunder are independent of the
obligations of Company under the Loan Documents or the Lender Interest
Rate Agreements and the obligations of any other guarantor (including any
Subsidiary Guarantor) of the obligations of Company under the Loan
Documents or the Lender Interest Rate Agreements, and a separate action or
actions may be brought and prosecuted against Guarantor whether or not any
action is brought against Company or any of such other guarantors and
whether or not Company is joined in any such action or actions.
(d) Guarantor's payment of a portion, but not all, of the Guarantied
Obligations shall in no way limit, affect, modify or abridge Guarantor's
liability for any portion of the Guarantied Obligations which has not been
paid. Without limiting the generality of the foregoing, if Guarantied
Party is awarded a judgment in any suit brought to enforce Guarantor's
covenant to pay a portion of the Guarantied Obligations, such judgment
shall not be deemed to release Guarantor from its covenant to pay the
portion of the Guarantied Obligations that is not the subject of such
suit.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's liability
hereunder, from time to time may (i) renew, extend, accelerate, increase
the rate of interest on, or otherwise change the time, place, manner or
terms of payment of the Guarantied Obligations, (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guarantied Obligations or any
agreement relating thereto and/or subordinate the payment of the same to
the payment of any other obligations; (iii) request and accept other
guaranties of the Guarantied Obligations and take and hold security for
the payment of this Guaranty or the Guarantied Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive,
alter, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties (including
the Subsidiary Guaranty) of the Guarantied Obligations, or any other
obligation of any Person with respect to the Guarantied Obligations; (v)
enforce and apply any security now or hereafter held by or for the benefit
of such Beneficiary in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise
any other right or remedy that such Beneficiary may have against any such
security, in each case as such Beneficiary in its discretion may determine
consistent with the Credit Agreement or the applicable Lender Interest
Rate Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of Guarantor against
VIII-5
Company or any security for the Guarantied Obligations; and (vi) exercise
any other rights available to it under the Loan Documents or the Lender
Interest Rate Agreements.
(f) This Guaranty and the obligations of Guarantor hereunder shall
be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other
than payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not
Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any
claim or demand or any right, power or remedy (whether arising under the
Loan Documents or the Lender Interest Rate Agreements, at law, in equity
or otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to the Subsidiary Guaranty or any other
guaranty of or security for the payment of the Guarantied Obligations;
(ii) any rescission, waiver, amendment or modification of, or any consent
to departure from, any of the terms or provisions (including without
limitation provisions relating to events of default) of the Credit
Agreement, any of the other Loan Documents, any of the Lender Interest
Rate Agreements or any agreement or instrument executed pursuant thereto,
or of the Subsidiary Guaranty or any other guaranty or security for the
Guarantied Obligations, in each case whether or not in accordance with the
terms of the Credit Agreement or such Loan Document, such Lender Interest
Rate Agreement or any agreement relating to the Subsidiary Guaranty or
such other guaranty or security; (iii) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Loan
Documents or any of the Lender Interest Rate Agreements or from the
proceeds of any security for the Guarantied Obligations, except to the
extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have elected to
apply such payment to any part or all of the Guarantied Obligations; (v)
any Beneficiary's consent to the change, reorganization or termination of
the corporate structure or existence of Company or any of its Subsidiaries
and to any corresponding restructuring of the Guarantied Obligations; (vi)
any failure to perfect or continue perfection of a security interest in
any collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations,
including, but not limited to, failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of Guarantor as an obligor in respect of the
Guarantied Obligations.
VIII-6
2.5 Waivers by Guarantor.
Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment
or performance by Guarantor, to (i) proceed against Company, any other
guarantor (including any Subsidiary Guarantor) of the Guarantied
Obligations or any other Person, (ii) proceed against or exhaust any
security held from Company, any such other guarantor or any other Person,
(iii) proceed against or have resort to any balance of any deposit account
or credit on the books of any Beneficiary in favor of Company or any other
Person, or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including without
limitation any defense based on or arising out of the lack of validity or
the unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guarantied Obligations, except behavior which
amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any
legal or equitable discharge of Guarantor's obligations hereunder, (ii)
the benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit
Agreement, the Lender Interest Rate Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of any
of the matters referred to in subsection 2.4 and any right to consent to
any thereof; and
VIII-7
(g) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
2.6 Guarantor's Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations have been paid in full and the
Commitments terminated, Guarantor hereby waives any claim, right or remedy,
direct or indirect, that Guarantor now has or may hereafter have against Company
or any of its assets in connection with this Guaranty or the performance by
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including, without limitation, (a) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter have
against Company, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (c) any benefit of, and any right to participate in, any collateral
or security now or hereafter held by any Beneficiary. In addition, until the
Guarantied Obligations shall have been paid in full and the Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled,
Guarantor shall withhold exercise of any right of contribution Guarantor may
have against any other guarantor of the Guarantied Obligations (including
without limitation any such right of contribution under the Subsidiary Guaranty
as contemplated by subsection 2.2). Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Guarantor may have
against Company or against any collateral or security, and any rights of
contribution Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Company,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 Subordination of Other Obligations.
Any indebtedness of Company or any Subsidiary Guarantor now or hereafter
held by Guarantor is hereby subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness collected or received by Guarantor after
an Event of Default has occurred and is continuing shall be held in trust for
Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to
Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations but without affecting, impairing or limiting
in any manner the liability of Guarantor under any other provision of this
Guaranty.
VIII-8
2.8 Expenses.
Guarantor agrees to pay, or cause to be paid, on demand, and to save
Beneficiaries harmless against liability for, any and all costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by any Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.
2.9 Continuing Guaranty.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled. Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Guarantied Obligations.
2.10 Authority of Guarantor or Company.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of Guarantor or Company or the officers, directors or any agents acting
or purporting to act on behalf of any of them.
2.11 Financial Condition of Company.
Any Loans may be granted to Company or continued from time to time, and
any Lender Interest Rate Agreement may be entered into from time to time, in
each case without notice to or authorization from Guarantor regardless of the
financial or other condition of Company at the time of any such grant or
continuation or at the time such Lender Interest Rate Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with Guarantor its assessment, or Guarantor's assessment, of the
financial condition of Company. Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Interest Rate Agreements, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Company now known or hereafter known by
any Beneficiary.
2.12 Rights Cumulative.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents, any of the Lender Interest Rate Agreements
or any agreement between Guarantor and any Beneficiary or Beneficiaries or
between Company and any Beneficiary or Beneficiaries. Any
VIII-9
forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty.
(a) So long as any Guarantied Obligations remain outstanding, Guarantor
shall not, without the prior written consent of Guarantied Party acting pursuant
to the instructions of Requisite Obligees (as defined in subsection 3.12),
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Company. The obligations
of Guarantor under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion of
the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations are
paid by Company, the obligations of Guarantor hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 Notice of Events.
As soon as Guarantor obtains knowledge thereof, Guarantor shall give
Guarantied Party written notice of any condition or event which has resulted in
a breach of or noncompliance with any term, condition or covenant contained
herein.
2.15 Set Off.
VIII-10
In addition to any other rights any Beneficiary may have under law or in
equity, if any amount shall at any time be due and owing by Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time upon the occurrence and during the continuation of any Event
of Default, without notice (any such notice being hereby expressly waived), to
set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness of such
Beneficiary owing to Guarantor and any other property of Guarantor held by any
Beneficiary to or for the credit or the account of Guarantor against and on
account of the Guarantied Obligations and liabilities of Guarantor to any
Beneficiary under this Guaranty.
SECTION 3. MISCELLANEOUS
3.1 Survival of Warranties.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Guaranty and the other Loan Documents and the
Lender Interest Rate Agreements and any increase in the Commitments under the
Credit Agreement.
3.2 Notices.
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, or upon receipt of
telefacsimile or telex (with received answerback) or three Business Days after
depositing it in the United States mail with postage pre-paid and properly
addressed; provided, notices to Guarantied Party shall not be effective until
received. For purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or, as to any party, such other
address as shall be designated by such party in a written notice delivered to
the other parties hereto.
3.3 Severability.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
3.4 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of this
Guaranty, and no consent to any departure by Guarantor therefrom, shall in any
event be effective without the written concurrence of Guarantied Party and, in
the case of any such amendment or
VIII-11
modification, Guarantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
3.5 Headings.
Section and subsection headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
3.6 Applicable Law; Rules of Construction.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Guaranty mutatis mutandis.
3.7 Successors and Assigns.
This Guaranty is a continuing guaranty and shall be binding upon Guarantor
and its successors and assigns. This Guaranty shall inure to the benefit of
Beneficiaries and their respective successors and assigns. Guarantor shall not
assign this Guaranty or any of the rights or obligations of Guarantor hereunder
without the prior written consent of all Lenders. Any Beneficiary may, without
notice or consent, assign its interest in this Guaranty in whole or in part. The
terms and provisions of this Guaranty shall inure to the benefit of any
transferee or assignee of any Loan, and in the event of such transfer or
assignment the rights and privileges herein conferred upon such Beneficiary
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.
3.8 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX
XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, GUARANTOR, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO GUARANTOR AT ITS ADDRESS PROVIDED
VIII-12
IN ACCORDANCE WITH SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES RETAIN THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI)
AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO JURISDICTION AND
VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
3.9 Waiver of Trial by Jury.
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH BENEFICIARY
EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Guarantor and, by its acceptance
of the benefits hereof, each Beneficiary each (i) acknowledges that this waiver
is a material inducement for Guarantor and Beneficiaries to enter into a
business relationship, that Guarantor and Beneficiaries have already relied on
this waiver in entering into this Guaranty or accepting the benefits thereof, as
the case may be, and that each will continue to rely on this waiver in their
related future dealings and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY GUARANTIED PARTY AND
GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the event of litigation, this
Guaranty may be filed as a written consent to a trial by the court.
3.10 No Other Writing.
This writing is intended by Guarantor and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
VIII-13
3.11 Further Assurances.
At any time or from time to time, upon the request of Guarantied Party,
Guarantor shall execute and deliver such further documents and do such other
acts and things as Guarantied Party may reasonably request in order to effect
fully the purposes of this Guaranty.
3.12 Guarantied Party as Administrative Agent.
(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i) Requisite Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional amount (or, with
respect to any Lender Interest Rate Agreement that has been terminated in
accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this subsection 3.12, each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to enforce this
Guaranty, it being understood and agreed by such Interest Rate Exchanger that
all rights and remedies hereunder may be exercised solely by Guarantied Party
for the benefit of Beneficiaries in accordance with the terms of this subsection
3.12.
(b) Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Guarantied Party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed
VIII-14
Guarantied Party's resignation or removal hereunder as Guarantied Party, the
provisions of this Guaranty shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Guaranty while it was Guarantied Party
hereunder.
[Remainder of page intentionally left blank]
VIII-15
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first written above.
MBW HOLDINGS INC.
By: ___________________________________
Name:
Title:
VIII-16
EXHIBIT IX
[FORM OF PLEDGE AGREEMENT]
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is dated as of December __, 1996
and entered into by and among MBW FOODS INC., a Delaware corporation
("Company"), MBW HOLDINGS INC., a Delaware corporation ("Holdings") (each of
Company and Holdings being a "Pledgor" and collectively "Pledgors"; provided
that after the Closing Date, "Pledgors" shall mean and include Company, Holdings
and any Additional Pledgors (as hereinafter defined)), and THE CHASE MANHATTAN
BANK, as administrative agent for and representative of (in such capacity herein
called "Secured Party") the financial institutions ("Lenders") party to the
Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgors are the legal and beneficial owners of (i) the shares of stock
(the "Pledged Shares") described in Part A of Schedule I annexed hereto and
issued by the corporations named therein and (ii) the indebtedness (the "Pledged
Debt") described in Part B of said Schedule I and issued by the obligors named
therein.
B. Pursuant to that certain Credit Agreement dated as of December __, 1996
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Company, Holdings, Lenders, Secured Party, as
Administrative Agent, and Chase Securities Inc., as Arranging Agent, Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend certain credit facilities to Company.
C. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreement (collectively, the "Lender
Interest Rate Agreements") with one or more Lenders or their Affiliates (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be secured hereunder.
IX-1
D. Holdings has executed and delivered that certain Holdings Guaranty
dated as of December __, 1996 (said Holdings Guaranty, as it may hereafter be
amended, restated, supplemented or otherwise modified from time to time, being
the "Holdings Guaranty") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which Holdings has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and the other Loan Documents and all obligations of Company
under the Lender Interest Rate Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof.
E. Additional Pledgors shall execute and deliver counterparts to that
certain Subsidiary Guaranty (said Subsidiary Guaranty, as it may be amended,
restated, supplemented or otherwise modified from time to time, being the
"Subsidiary Guaranty" and together with the Holdings Guaranty, the "Guaranties")
in favor of Secured Party for the benefit of Lenders and any Interest Rate
Exchangers, pursuant to which each Additional Pledgor shall guaranty the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and all obligations of Company under the Lender Interest Rate
Agreements, including without limitation the obligation of Company to make
payments thereunder in the event of early termination thereof.
F. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that each Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security.
Each Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "Pledged Collateral"):
(a) the Pledged Shares owned by such Pledgor and the certificates
representing such Pledged Shares and any interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such
Pledged Shares, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares; provided, however, that to the extent the issuer of any of
the Pledged Shares is a controlled foreign corporation (used hereinafter
as such term is defined in Section 957(a) or a successor provision of the
Internal Revenue Code of 1986, as
IX-2
amended from time to time), such Pledgor shall only be required to pledge
Pledged Shares of, certificates representing Pledged Shares of, and such
interests pertaining to Pledged Shares of such issuer possessing up to but
not exceeding 65% of the voting power of all classes of capital stock
entitled to vote of such issuer, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Pledged Shares;
(b) the Pledged Debt owned by such Pledgor and the instruments
evidencing such Pledged Debt, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Debt;
(c) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of any Pledged Shares from time to time acquired by
such Pledgor in any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares (all such shares,
securities, warrants, options, rights, certificates, instruments and
interests collectively being "Additional Pledged Shares"), and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Additional Pledged
Shares; provided, however, that to the extent that the issuer of any
Additional Pledged Shares is a controlled foreign corporation, such
Pledgor shall only be required to pledge Additional Pledged Shares of such
issuer possessing up to but not exceeding 65% of the voting power of all
classes of capital stock entitled to vote of such issuer, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Additional Pledged
Shares;
(d) all additional indebtedness from time to time owed to such
Pledgor by any obligor on any Pledged Debt and the instruments evidencing
such indebtedness, and all interest, cash, instruments and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness;
(e) all shares of, and all securities convertible into and warrants,
options and other rights to purchase or otherwise acquire, stock of any
Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of such Pledgor (which shares shall be
deemed to be part of the Pledged Shares), the certificates or other
instruments representing such shares, securities, warrants, options or
other rights and any interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such shares (all such shares,
securities, warrants, options, rights,
IX-3
certificates, instruments and interests collectively being "New Pledged
Shares"), and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares,
securities, warrants, options or other rights; provided, however, that in
the event that any such direct Subsidiary is a controlled foreign
corporation, such Pledgor shall only be required to pledge New Pledged
Shares of such Subsidiary possessing up to but not exceeding 65% of the
voting power of all classes of capital stock entitled to vote of such
Subsidiary, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
New Pledged Shares;
(f) all indebtedness from time to time owed to such Pledgor by any
Person that, after the date of this Agreement, becomes, as a result of
such any occurrence, a direct or indirect Subsidiary of such Pledgor, and
all interest, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f) above, all
proceeds of any or all of the foregoing Pledged Collateral. For purposes
of this Agreement, the term "proceeds" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes, without limitation, proceeds of any
indemnity or guaranty payable to such Pledgor or Secured Party from time
to time with respect to any of the Pledged Collateral.
SECTION 2. Security for Obligations.
This Agreement secures, and the Pledged Collateral pledged and assigned by
each Pledgor is collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured
Obligations with respect to such Pledgor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreements,
(b) with respect to Holdings, all obligations and liabilities of
every nature of Holdings now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the Holdings Guaranty, and
IX-4
(c) with respect to each Additional Pledgor, all obligations and
liabilities of every nature of Additional Pledgors now or hereafter
existing under or arising out of or in connection with the Subsidiary
Guaranty,
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgors now or hereafter existing under this Agreement.
SECTION 3. Delivery of Pledged Collateral.
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of Secured Party
pursuant hereto and shall be in suitable form for transfer by delivery or, as
applicable, shall be accompanied by the appropriate Pledgor's endorsement, where
necessary, or duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Secured Party. Upon the occurrence and
during the continuation of an Event of Default (as defined in the Credit
Agreement) or the occurrence of an Early Termination Date (as defined in a
Master Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International Swap and
Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Lender Interest Rate Agreement (either such occurrence
being an "Event of Default" for purposes of this Agreement), Secured Party shall
have the right, without notice to any Pledgor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties.
Each Pledgor represents and warrants as of the date it becomes a party
hereto as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares owned by such Pledgor have been duly authorized and validly
issued and are fully
IX-5
paid and non-assessable. All of the Pledged Debt owned by such Pledgor has
been duly authorized, authenticated or issued, and delivered and is the
legal, valid and binding obligation of the issuers thereof and is not in
default.
(b) Description of Pledged Collateral. The Pledged Shares owned by
such Pledgor constitute the percentage of the issued and outstanding
shares of stock of each issuer thereof set forth on Schedule I annexed
hereto, and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance
or sale of, any Pledged Shares. The Pledged Debt owned by such Pledgor
constitutes all of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers thereof owing to
such Pledgor.
(c) Ownership of Pledged Collateral. Such Pledgor is the legal,
record and beneficial owner of the Pledged Collateral owned by such
Pledgor free and clear of any Lien except for the security interest
created by this Agreement.
(d) Perfection. The pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the Secured
Obligations.
SECTION 5. Transfers and Other Liens; Additional Pledged Collateral; etc.
Each Pledgor shall:
(a) not, except as expressly permitted by the Credit Agreement, (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral, (ii)
create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement,
or (iii) permit any issuer of Pledged Shares to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder and
no cash, securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation; provided that if
the surviving or resulting corporation upon any such merger or
consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then such Pledgor
shall only be required to pledge outstanding capital stock of such
surviving or resulting corporation possessing up to but not exceeding 65%
of the voting power of all classes of capital stock of such issuer
entitled to vote; provided further that in the event any Pledgor makes an
Asset Sale permitted by the Credit Agreement and the assets subject to
such Asset Sale are Pledged Shares, Secured Party shall release the
Pledged Shares that are the subject of such Asset Sale to such Pledgor
free and clear of the lien and security interest under this Agreement
concurrently with the consummation of such Asset Sale; and provided
further, that as a condition precedent to such release, Secured Party
shall have received evidence
IX-6
satisfactory to it that arrangements satisfactory to it have been made for
delivery to Secured Party of the Net Cash Proceeds of such Asset Sale in
the event and to the extent that all or any portion of such Net Cash
Proceeds are required to be applied to prepay the Loans under the Credit
Agreement.
(b) (i) cause each issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to a Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each issuer of
Pledged Shares, and (iii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes, as a result
of any occurrence, a direct Subsidiary of any Pledgor; provided, that
notwithstanding anything contained in this clause (b) to the contrary,
such Pledgor shall only be required to pledge the outstanding capital
stock of a controlled foreign corporation possessing up to but not
exceeding 65% of the voting power of all classes of capital stock of such
controlled foreign corporation entitled to vote;
(c) (i) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to
time owed to such Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments
or other evidences of indebtedness from time to time owed to such Pledgor
by any Person that after the date of this Agreement becomes, as a result
of any occurrence, a direct or indirect Subsidiary of any Pledgor;
(d) promptly deliver to Secured Party all written notices received
by it with respect to the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested
in good faith; provided that such Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days
prior to the date of any proposed sale under any judgement, writ or
warrant of attachment entered or filed against Pledgor or any of the
Pledged Collateral as a result of the failure to make such payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Each Pledgor agrees that from time to time, at the expense of
Pledgors, such Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, such
Pledgor will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such
IX-7
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby and (ii) at Secured Party's request,
appear in and defend any action or proceeding that may affect such Pledgor's
title to or Secured Party's security interest in all or any part of the Pledged
Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) or (c), promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Amendment, duly executed by
such Pledgor, in substantially the form of Schedule II annexed hereto (a "Pledge
Amendment"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Each Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any such Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of a Pledgor to execute a Pledge Amendment with
respect to any additional Pledged Shares or Pledged Debt pledged pursuant to
this Agreement shall not impair the security interest of Secured Party therein
or otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
(a) Pledgors' Rights. So long as no Event of Default shall have occurred
and be continuing:
(i) Pledgors shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the Credit Agreement;
(ii) Pledgors shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(1) dividends and interest paid or payable other than in cash
in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Pledged Collateral,
(2) dividends and other distributions paid or payable in cash
in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus, and
(3) cash paid, payable or otherwise distributed in respect of
principal or in redemption of or in exchange for any Pledged
Xxxxxxxxxx,
XX-0
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by a Pledgor, be received in
trust for the benefit of Secured Party, be segregated from the other
property or funds of such Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or cause to
be executed and delivered) to Pledgors all such proxies, dividend payment
orders and other instruments as Pledgors may from time to time reasonably
request for the purpose of enabling Pledgors to exercise the voting and
other consensual rights which they are entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, principal or interest
payments which they are authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Secured Party's Rights. Upon acceleration of the maturity of the Loans
in accordance with Section 8 of the Credit Agreement and upon the occurrence and
during the continuation of an Event of Default:
(i) upon written notice from Secured Party to a Pledgor, all rights
of such Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and
other consensual rights;
(ii) all rights of Pledgors to receive the dividends and interest
payments which they would otherwise be authorized to receive and retain
pursuant to Section 7(a)(ii) shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and
interest payments; and
(iii) all dividends, principal and interest payments which are
received by a Pledgor contrary to the provisions of paragraph (ii) of this
Section 7(b) shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of such Pledgor and shall forthwith
be paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements).
(c) Irrevocable Proxy. In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
to Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) each
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request and (ii)
without limiting the effect of the immediately preceding clause (i), each
Pledgor hereby grants to Secured Party an IRREVOCABLE PROXY to vote the Pledged
Shares owned by such Pledgor and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Shares would
IX-9
be entitled (including without limitation giving or withholding written consents
of shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Shares on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Shares or any officer or agent thereof), upon the occurrence of an
Event of Default and which proxy shall only terminate upon the payment in full
of the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Each Pledgor hereby irrevocably appoints Secured Party as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, Secured Party or otherwise, from time to time in
Secured Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of such Pledgor;
(b) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any instruments made payable to
such Pledgor representing any dividend, principal or interest payment or
other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same; and
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the
rights of Secured Party with respect to any of the Pledged Collateral.
SECTION 9. Secured Party May Perform.
If any Pledgor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Pledgors under Section 13(b).
IX-10
SECTION 10. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Pledged Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any parties
with respect to any Pledged Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Pledged Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Pledged Collateral), and Secured Party
may also in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. Secured Party or any Lender or
Interest Rate Exchanger may be the purchaser of any or all of the Pledged
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 15(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Pledgor, and each Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each
IX-11
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to such Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Pledgor hereby
waives any claims against Secured Party arising by reason of the fact that the
price at which any Pledged Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Pledged Collateral are insufficient to pay all the Secured
Obligations, Pledgors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions and, notwithstanding such
circumstances, such Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any or all
of the Pledged Collateral, upon written request, each Pledgor shall and shall
cause each issuer of any Pledged Shares owned by such Pledgor to be sold
hereunder from time to time to furnish to Secured Party all such information as
Secured Party may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
SECTION 12. Application of Proceeds.
All proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as provided in subsection 2.4D of the Credit
Agreement.
IX-12
SECTION 13. Indemnity and Expenses.
(a) Pledgors jointly and severally agree to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including without
limitation enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's or such Lender's or
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Pledgors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Pledgor to perform or observe any of the provisions hereof.
(c) The obligations of Pledgors in this Section 13 shall survive the
termination of this Agreement and the discharge of Pledgors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
SECTION 14. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall revert to the applicable Pledgors. Upon any such termination Secured Party
will, at Pledgors' expense, execute and deliver to Pledgors such documents as
Pledgors shall reasonably request to evidence such termination and Pledgors
shall be entitled to the return, upon their request and at their expense,
against receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
IX-13
SECTION 15. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 11 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 15(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Pledged Collateral hereunder, it being understood and agreed by such
Interest Rate Exchanger that all rights and remedies hereunder may be exercised
solely by Secured Party for the benefit of Lenders and Interest Rate Exchangers
in accordance with the terms of this Section 15(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
IX-14
SECTION 16. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Pledgor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Pledgors;
provided that any Pledge Amendment in the form of Schedule II annexed hereto or
any amendment hereto pursuant to Section 19 shall be effective upon execution by
any Pledgor and Pledgors hereby waive any requirement of notice of or consent to
any such Pledge Amendment or amendment. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 17. Notices.
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 18. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. Additional Pledgors.
From time to time subsequent to the date hereof, Subsidiaries of Company
may become parties hereto, as additional Pledgors (each an "Additional
Pledgor"), by executing an acknowledgement to this Agreement substantially in
the form of Schedule III annexed hereto. Upon delivery of any such counterpart
to Administrative Agent and Secured Party, notice of which is hereby waived by
Pledgors, each such Additional Pledgor shall be a Pledgor and shall be as fully
a party hereto as if such Additional Pledgor were an original signatory hereto.
Each Pledgor expressly agrees that its obligations arising hereunder shall not
be affected or diminished
IX-15
by the addition or release of any other Pledgor hereunder, nor by any election
of Administrative Agent not to cause any Subsidiary of Company to become an
Additional Pledgor hereunder. This Agreement shall be fully effective as to any
Pledgor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Pledgor hereunder.
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 22. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
SECTION 23. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX
XX XXX XXXX.
IX-16
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PLEDGOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PLEDGOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 17; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
PLEDGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 23 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 24. Waiver of Jury Trial.
PLEDGORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Pledgor and Secured Party acknowledge that this waiver is
a material inducement for Pledgors and Secured Party to enter into a business
relationship, that Pledgors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Pledgor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 24 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
IX-17
SECTION 25. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
IX-18
IN WITNESS WHEREOF, Pledgors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MBW FOODS INC.
By:______________________________________
Name:
Title:
MBW HOLDINGS INC.
By:______________________________________
Name:
Title:
XX-00
XXX XXXXX XXXXXXXXX XXXX,
as Secured Party
By:______________________________________
Name: Xxxxx Xxxxx
Title: Vice President
IX-20
SCHEDULE I
TO PLEDGE AGREEMENT
Attached to and forming a part of the Pledge Agreement dated as of
December __, 1996, by and among the Pledgors referred to therein and The Chase
Manhattan Bank, as Secured Party.
Part A
================================================================================
Percentage
of
Stock Number Outstanding
Class of Certificate Par of Shares
Pledgor Stock Issuer Stock Nos. Value Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
Part B
================================================================================
Pledgor Debt Issuer Amount of
Indebtedness
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
IX-I-I
SCHEDULE II
TO PLEDGE AGREEMENT
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated _______________, [199_] [200_] is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated as of December __, 1996, by and among the Pledgors
referred to therein and The Chase Manhattan Bank, as Secured Party (the "Pledge
Agreement", capitalized terms defined therein being used herein as therein
defined), and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
[NAME OF PLEDGOR]
By: ______________________________________
Name:
Title:
================================================================================
Percentage of
Class of Stock Par Number of Outstanding
Stock Issuer Stock Certificate Nos. Value Shares Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
=====================================================
Amount of
Debt Issuer Indebtedness
=====================================================
-----------------------------------------------------
-----------------------------------------------------
=====================================================
IX-II-1
SCHEDULE III
TO PLEDGE AGREEMENT
[FORM OF PLEDGE ACKNOWLEDGEMENT]
This Pledge Acknowledgement, dated _______________, [199_] [200_], is
delivered pursuant to Section 19 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Acknowledgement may be attached to
the Pledge Agreement dated December __, 1996, by and among the Pledgors referred
to therein and The Chase Manhattan Bank, as Secured Party (the "Pledge
Agreement", capitalized terms defined therein being used herein as therein
defined), that the undersigned by executing and delivering this Acknowledgement
hereby becomes a Pledgor under the Pledge Agreement in accordance with Section
19 thereof and agrees to be bound by all of the terms thereof, and that the
[Pledged Shares] [Pledged Debt] listed on this Pledge Acknowledgement shall be
deemed to be part of the [Pledged Shares] [Pledged Debt] and shall become part
of the Pledged Collateral and shall secure all Secured Obligations.
[NAME OF ADDITIONAL PLEDGOR]
By: ______________________________________
Name:
Title:
Notice Address:
_______________________________
_______________________________
_______________________________
_______________________________
IX-III-1
================================================================================
Percentage of
Class of Stock Par Number of Outstanding
Stock Issuer Stock Certificate Nos. Value Shares Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
=====================================================
Amount of
Debt Issuer Indebtedness
=====================================================
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
=====================================================
IX-III-2
EXHIBIT X
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is dated as of December __,
1996 and entered into by and among MBW FOODS INC., a Delaware corporation
("Company"), MBW HOLDINGS INC., a Delaware corporation ("Holdings") (each of
Company and Holdings being a "Grantor" and collectively "Grantors"; provided
that after the Closing Date, "Grantors" shall mean and include Company, Holdings
and any Additional Grantors (as hereinafter defined)) and THE CHASE MANHATTAN
BANK, as administrative agent for and representative of (in such capacity herein
called "Secured Party") the financial institutions ("Lenders") party to the
Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to that certain Credit Agreement dated as of December __, 1996
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) by and among Company, MBW Holdings Inc., a Delaware corporation,
Lenders, Secured Party, as Administrative Agent, and Chase Securities Inc., as
Arranging Agent, Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreement (collectively, the "Lender
Interest Rate Agreements") with one or more Lenders or their Affiliates (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be secured hereunder.
C. Holdings has executed and delivered that certain Holdings Guaranty
dated as of December __, 1996 (said Holdings Guaranty, as it may hereafter be
amended, restated, supplemented or otherwise modified from time to time, being
the "Holdings Guaranty") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which Holdings has guarantied the
prompt payment and performance when due of all
X-1
obligations of Company under the Credit Agreement and the other Loan Documents
and all obligations of Company under the Lender Interest Rate Agreements,
including without limitation the obligation of Company to make payments
thereunder in the event of early termination thereof.
D. Additional Grantors shall execute and deliver counterparts to that
certain Subsidiary Guaranty (said Subsidiary Guaranty, as it may be amended,
restated, supplemented or otherwise modified from time to time, being the
"Subsidiary Guaranty") in favor of Secured Party for the benefit of Lenders and
any Interest Rate Exchangers, pursuant to which each Additional Grantor shall
guaranty the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents and all
obligations of Company under the Lender Interest Rate Agreements, including
without limitation the obligation of Company to make payments thereunder in the
event of early termination thereof.
E. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with
Secured Party as follows:
SECTION 1. Grant of Security.
Each Grantor hereby assigns to Secured Party, and hereby grants to Secured
Party a security interest in, all of such Grantor's right, title and interest in
and to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "Collateral"):
(a) all equipment in all of its forms (including, but not limited
to, all machinery, all computers, all data processing, computer or office
equipment, all furniture and all trucks and other vehicles), all parts
thereof and all accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");
(b) all inventory in all of its forms (including, but not limited
to, (i) all goods held by such Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii) all
raw materials, work in process, finished goods, samples, and materials
used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise
used or consumed in such Grantor's business, (iii) all goods in which such
Grantor has an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which
X-2
are returned to or repossessed by such Grantor) and all accessions thereto
and products thereof (all such inventory, accessions and products being
the "Inventory") and all negotiable and non-negotiable documents of title
(including without limitation warehouse receipts, dock receipts and bills
of lading) issued by any Person covering any Inventory (any such
negotiable document of title being a "Negotiable Document of Title");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any
kind owned by or owing to such Grantor and all rights in, to and under all
security agreements, leases and other contracts securing or otherwise
relating to any such accounts, contract rights, chattel paper, documents,
instruments, general intangibles or other obligations (any and all such
accounts, contract rights, chattel paper, documents, instruments, general
intangibles and other obligations being the "Accounts", and any and all
such security agreements, leases and other contracts being the "Related
Contracts");
(d) all agreements to which such Grantor is a party, including
without limitation those listed in Schedule 1(d) annexed hereto, as each
such agreement may be amended, restated, supplemented or otherwise
modified from time to time (said agreements, as so amended, restated,
supplemented or otherwise modified, being referred to herein individually
as an "Assigned Agreement" and collectively as the "Assigned Agreements"),
including, without limitation, (i) all rights of such Grantor to receive
moneys due or to become due under or pursuant to the Assigned Agreements,
(ii) all rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) all claims of such Grantor for damages arising out of any breach of
or default under the Assigned Agreements, and (iv) all rights of such
Grantor to terminate, amend, supplement, modify or exercise rights or
options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(e) all cash, money, currency and deposit accounts, including
without limitation demand, time, savings, passbooks or similar accounts
maintained with Lenders or other banks, savings and loan associations or
other financial institutions;
(f) all trademarks, trademark applications, trade names, trade
secrets, trade dress, service marks, business names, patents, patent
applications, licenses, copyrights and copyright applications owned by
such Grantor, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation
unpatented formulas, recipes, manufacturing methods and processes,
inventions, discoveries, tax refunds, rights to payment or performance,
choses in action and judgments taken on any rights or claims included in
the Collateral);
X-3
(h) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products
thereof;
(i) all books, records, ledger cards, files, sales records, sales
and promotional data, invoices, product specifications, drawings,
advertising materials, customer lists, cost and pricing information,
supplier lists, business plans, catalogs, quality control manuals,
blueprints, correspondence, computer programs, tapes, disks and related
data processing software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon; and
(j) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral assigned by each Grantor is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured Obligations
with respect to such Grantor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreement,
(b) with respect to Holdings, all obligations and liabilities of
every nature of Holdings now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the Holdings Guaranty, and
(c) with respect to each Additional Grantor, all obligations and
liabilities of every nature of Additional Grantors now or hereafter
existing under or arising out of or in connection with the Subsidiary
Guaranty,
X-4
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement.
SECTION 3. Grantors Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as of the date it becomes a party
hereto as follows:
(a) Ownership of Collateral. Except as expressly permitted by the
Credit Agreement and for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of
any Lien.
(b) Locations of Equipment and Inventory. All of the Equipment and
Inventory is, as of the date such Grantor has become a party hereto,
located at the places specified in Schedule 4(b) annexed hereto.
(c) Negotiable Documents of Title. No Negotiable Documents of Title
are outstanding with respect to any of the Inventory.
X-5
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that
evidence Accounts are located at the locations set forth on Schedule 4(d)
annexed hereto.
(e) Names. No Grantor has in the past done, and no Grantor now does,
business under any other name (including any trade-name or fictitious
business name) except the names listed in Schedule 4(e) annexed hereto.
(f) Delivery of Certain Collateral. All notes and other instruments
(excluding checks) comprising any and all items of Collateral have been
delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(g) Perfection. The security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers hereunder constitute valid security interests in the
Collateral. Upon the filing of UCC financing statements naming each
Grantor as "debtor", naming Secured Party as "secured party" and
describing the Collateral in the filing offices set forth on Schedule 4(g)
annexed hereto, the security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers will, to the extent a security interest in the Collateral may
be perfected by filing UCC financing statements, constitute perfected
security interests therein prior to all other Liens.
SECTION 5. Further Assurances.
(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor will:
(i) at the request of Secured Party, xxxx conspicuously each item of chattel
paper included in the Accounts, each Related Contract and, at the request of
Secured Party, each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) at the
request of Secured Party, deliver and pledge to Secured Party hereunder all
promissory notes and other instruments (including checks) and all original
counterparts of chattel paper constituting Collateral, duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Secured Party, (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) promptly after the acquisition by such
Grantor of any item of Equipment which is covered by a certificate of
X-6
title under a statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of perfection
thereof, execute and file with the registrar of motor vehicles or other
appropriate authority in such jurisdiction an application or other document
requesting the notation or other indication of the security interest created
hereunder on such certificate of title, (v) within 30 days after the end of each
calendar year and June 30 of each calendar year, deliver to Secured Party copies
of all such applications or other documents filed during such semiannual period
and copies of all such certificates of title issued during such semiannual
period indicating the security interest created hereunder in the items of
Equipment covered thereby, (vi) at any reasonable time, upon request by Secured
Party, exhibit the Collateral to and allow inspection of the Collateral by
Secured Party, or persons designated by Secured Party, and (vii) at Secured
Party's request, appear in and defend any action or proceeding that may affect
such Grantor's title to or Secured Party's security interest in all or any part
of the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
and
(d) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except
to the extent the validity thereof
X-7
is being contested in good faith; provided that such Grantor shall in any
event pay such taxes, assessments, charges, levies or claims not later
than five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against such Grantor or any
of the Collateral as a result of the failure to make such payment.
SECTION 7. Special Covenants With Respect to Equipment and Inventory.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the
places therefor specified on Schedule 4(b) annexed hereto or, upon 30
days' prior written notice to Secured Party, at such other places in
jurisdictions where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Secured
Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment owned by such Grantor to be maintained and
preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with such Grantor's
past practices. Each Grantor shall promptly furnish to Secured Party a
statement respecting any material loss or damage to any of the Equipment
owned by such Grantor;
(c) keep correct and accurate records of Inventory owned by such
Grantor, itemizing and describing the kind, type and quantity of such
Inventory, such Grantor's cost therefor and (where applicable) the current
list prices for such Inventory;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $300,000, and in any event upon the occurrence of an
Event of Default (as defined in the Credit Agreement) or the occurrence of
an Early Termination Date (as defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate and Currency Exchange Agreement in
the form prepared by the International Swap and Derivatives Association
Inc. or a similar event under any similar swap agreement) under any Lender
Interest Rate Agreement (either such occurrence being an "Event of
Default" for purposes of this Agreement), instruct such agent or processor
to hold all such Inventory for the account of Secured Party and subject to
the instructions of Secured Party.
(e) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party.
X-8
SECTION 8. Insurance.
Each Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Credit
Agreement.
SECTION 9. Special Covenants with respect to Accounts and Related Contracts.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 30
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than 3 years from the date on which
such Account arose, maintain (i) complete records of each Account of such
Grantor, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts and Related Contracts. In connection with
such collections, each Grantor may take (and, at Secured Party's direction,
shall take) such action as such Grantor or Secured Party may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to such Grantor of its
intention to do so, to notify the account debtors or obligors under any Accounts
of the assignment of such Accounts to Secured Party and to direct such account
debtors or obligors to make payment of all amounts due or to become due to such
Grantor thereunder directly to Secured Party, to notify each Person maintaining
a lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party and,
upon such notification and at the expense of Grantors, to enforce collection of
any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done. After
X-9
receipt by such Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including
checks and other instruments) received by such Grantor in respect of the
Accounts and the Related Contracts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 18, and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.
SECTION 10. Special Provisions With Respect to the Assigned Agreements.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and observe
all terms and provisions of the Assigned Agreements to be performed or
observed by it, maintain the Assigned Agreements in full force and effect,
enforce the Assigned Agreements in accordance with their terms, and take
all such action to such end as may be from time to time requested by
Secured Party; and
(ii) upon the reasonable request of Secured Party, furnish to
Secured Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or pursuant to
the Assigned Agreements, and from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon request of Secured Party
make to the parties to such Assigned Agreements such demands and requests
for information and reports or for action as such Grantor is entitled to
make under the Assigned Agreements.
(b) Upon the occurrence and during the continuance of an Event of Default,
no Grantor shall:
(i) cancel or terminate any of the Assigned Agreements or consent to
or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned Agreements;
(iv) consent to or permit or accept any prepayment of amounts to
become due under or in connection with the Assigned Agreements, except as
expressly provided therein; or
X-10
(v) take any other action in connection with the Assigned Agreements
that would materially impair the value of the interest or rights of such
Grantor thereunder or that would materially impair the interest or rights
of Secured Party.
SECTION 11. Deposit Accounts.
Upon the occurrence and during the continuation of an Event of Default,
Secured Party may exercise dominion and control over, and refuse to permit
further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Secured Party constituting
part of the Collateral.
SECTION 12. License of Patents, Trademarks, Copyrights, etc.
Each Grantor hereby assigns, transfers and conveys to Secured Party,
effective upon the occurrence of any Event of Default, the nonexclusive right
and license to use all trademarks, tradenames, copyrights, patents or technical
processes owned or held by such Grantor that are necessary for the use and
enjoyment of the Collateral and any other collateral granted by such Grantor as
security for the Secured Obligations, together with any goodwill associated
therewith, all to the extent necessary to enable Secured Party to use, possess
and realize on the Collateral and to enable any successor or assign to enjoy the
benefits of the Collateral. This right and license shall inure to the benefit of
all successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge, without requirement that any
monetary payment whatsoever be made to such Grantor.
SECTION 13. Transfers and Other Liens.
No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for the security interest created by this Agreement,
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person.
SECTION 14. Secured Party Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor,
X-11
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to Section 8;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to
become obligations of such Grantor to Secured Party, due and payable
immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantors' expense, at
any time or from time to time, all acts and things that Secured Party
deems necessary to protect, preserve or realize upon the Collateral and
Secured Party's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
X-12
SECTION 15. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
such Grantor under Section 19(b).
SECTION 16. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 17. Remedies.
If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Collateral), and also may (a) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (b) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (c) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (d) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (c) and collecting any
Secured Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 21(a))
shall otherwise agree in writing), shall be entitled, for the purpose of
X-13
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
SECTION 18. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Credit Agreement.
SECTION 19. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including without
limitation enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's or such Lender's or
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
X-14
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
SECTION 20. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Secured Party will,
at Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination.
SECTION 21. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 17 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 21(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it
X-15
being understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 21(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 22. Additional Grantors.
From time to time subsequent to the date hereof, Subsidiaries of Company
may become parties hereto as additional Grantors (each an "Additional Grantor")
by executing a counterpart of this Agreement and delivering supplements to
Schedule 4(b), Schedule 4(d), Schedule 4(e) and Schedule 4(g) in substantially
the forms annexed hereto, which supplements shall thereby supplement and amend
such Schedules. Upon delivery of any such counterpart to Administrative Agent
and Secured Party, notice of which is hereby waived by Grantors, each such
Additional Grantor shall be a Grantor and shall be as fully a party hereto as if
such Additional Grantor were an original signatory hereto. Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Administrative Agent not to cause any Subsidiary of Company to
become an Additional Grantor hereunder. This Agreement shall be fully effective
as to any Grantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Grantor hereunder.
X-16
SECTION 23. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided that any amendment hereto pursuant to Section 22 shall be effective
upon execution by any Additional Grantor and Grantors hereby waive any
requirement of notice of or consent to any such amendment. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 24. Notices.
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 25. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 26. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
X-17
SECTION 27. Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 28. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
SECTION 29. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX
XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 24; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES
X-18
THAT THE PROVISIONS OF THIS SECTION 29 RELATING TO JURISDICTION AND VENUE SHALL
BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 30. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 31. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
X-19
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MBW FOODS INC.
By:___________________________________
Name:
Title:
MBW HOLDINGS INC.
By:___________________________________
Name:
Title:
X-20
THE CHASE MANHATTAN BANK,
as Secured Party
By:___________________________________
Name: Xxxxx Xxxxx
Title: Vice President
X-21
IN WITNESS WHEREOF, the undersigned Additional Grantor has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of __________, [199_] [200_].
[NAME OF ADDITIONAL GRANTOR]
By:___________________________________
Name:
Title:
Notice Address:
________________________________
________________________________
________________________________
________________________________
X-22
SCHEDULE 1(d)
TO
SECURITY AGREEMENT
Assigned Agreements
(1) License Agreement dated as of December __, 1996, by and between
Conopco, Inc. and MBW Foods Inc.
(2) Shared Technology License Agreement dated as of December __, 1996,
by and between Conopco, Inc. and MBW Foods Inc.
(3) Transition Services Agreement dated as of December __, 1996, by and
between Conopco, Inc. and MBW Foods Inc.
(4) Co-Pack Agreement dated as of December __, 1996, by and between
Conopco, Inc. and MBW Foods Inc.
(5) Patent License Agreement dated as of December __, 1996, by and among
Conopco, Inc., Unilever PLC and MBW Foods Inc.
(6) Flavor Supply Agreement dated as of December __, 1996, by and
between MBW Foods Inc. and Quest International Flavors & Food
Ingredients Company.
(7) Escrow Agreement dated as of December __, 1996, by and among MBW
Foods Inc., ______________, as escrow agent, and Quest International
Flavors & Food Ingredients Company.
X-1(d)-1
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
X-4(b)-1
SCHEDULE 4(d)
TO
SECURITY AGREEMENT
Office Locations
Name of Grantor Office Locations
--------------- ----------------
X-4(d)-1
SCHEDULE 4(e)
TO
SECURITY AGREEMENT
Other Names
Name of Grantor Other Names
--------------- -----------
X-4(e)-1
SCHEDULE 4(g)
TO
SECURITY AGREEMENT
Filing Offices
--------------
X-4(g)-1
EXHIBIT XI
[FORM OF PATENT AND TRADEMARK SECURITY AGREEMENT]
PATENT AND TRADEMARK SECURITY AGREEMENT
This PATENT AND TRADEMARK SECURITY AGREEMENT (this "Agreement") is dated
as of December __, 1996 and entered into by and among MBW FOODS INC., a Delaware
corporation ("Company")(Company being referred to herein as a "Grantor";
provided that after the Closing Date, "Grantors" shall mean and include Company
and any Additional Grantors (as hereinafter defined)), and THE CHASE MANHATTAN
BANK, as administrative agent for and representative of (in such capacity herein
called "Secured Party") the financial institutions ("Lenders") party to the
Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to that certain Credit Agreement dated as of December __, 1996
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) by and among Company, MBW Holdings Inc., a Delaware corporation,
Lenders, Secured Party, as Administrative Agent, and Chase Securities Inc., as
Arranging Agent, Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreement (collectively, the "Lender
Interest Rate Agreements") with one or more Lenders or their Affiliates (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be secured hereunder.
C. Additional Grantors shall execute and deliver counterparts to that
certain Subsidiary Guaranty (said Subsidiary Guaranty, as it may be amended,
restated, supplemented or otherwise modified from time to time, being the
"Subsidiary Guaranty") in favor of Secured Party for the benefit of Lenders and
any Interest Rate Exchangers, pursuant to which each Additional Grantor shall
guaranty the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents and all
XI-1
obligations of Company under the Lender Interest Rate Agreements, including
without limitation the obligation of Company to make payments thereunder in the
event of early termination thereof.
D. Grantors own and use in their business, and will in the future adopt
and so use, various intangible assets, including trademarks, service marks,
designs, logos, indicia, tradenames, corporate names, company names, business
names, fictitious business names, trade styles and/or other source and/or
business identifiers and applications pertaining thereto (collectively, the
"Trademarks").
E. Secured Party desires Grantors to assign and grant to it a lien on and
security interest in all of Grantors' existing and future Trademarks, all
registrations that have been or may hereafter be issued or applied for thereon
in the United States and any state thereof and in foreign countries (the
"Registrations"), all common law and other rights in and to the Trademarks in
the United States and any state thereof and in foreign countries (the "Trademark
Rights"), all goodwill of Grantors' business symbolized by the Trademarks and
associated therewith, including without limitation the documents and things
described in Section 1(b) (the "Associated Goodwill"), and all proceeds of the
Trademarks, the Registrations, the Trademark Rights and the Associated Goodwill,
and Grantors agree to assign and grant to Secured Party a secured and protected
interest in the Trademarks, the Registrations, the Trademark Rights, the
Associated Goodwill and all the proceeds thereof as provided herein.
F. Pursuant to the Security Agreement, each Grantor has assigned and
granted to Secured Party a lien on and security interest in, among other assets,
all Grantors' equipment, inventory, accounts and general intangibles relating to
the products and services sold or delivered under or in connection with the
Trademarks such that, upon the occurrence and during the continuation of an
Event of Default (as defined in the Credit Agreement) or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an Interest Rate
Swap Agreement or Interest Rate and Currency Exchange Agreement in the form
prepared by the International Swap and Derivatives Association Inc. or a similar
event under any similar swap agreement) under any Lender Interest Rate Agreement
(either such occurrence being an "Event of Default" for purposes of this
Agreement), Secured Party would be able to exercise its remedies consistent with
the Security Agreement, this Agreement and applicable law to foreclose upon
Grantors' business and use the Trademarks, the Registrations and the Trademark
Rights in conjunction with the continued operation of such business, maintaining
substantially the same product and service specifications and quality as
maintained by Grantors, and benefit from the Associated Goodwill.
G. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors shall have assigned and granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and
XI-2
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Grantor hereby agrees with Secured Party as follows:
SECTION 1. Assignment and Grant of Security.
Each Grantor hereby grants to Secured Party a security interest in all of
such Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "Collateral"):
(a) each of the Trademarks and rights and interests in Trademarks
which are presently, or in the future may be, owned or held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part
(including without limitation the Trademarks specifically identified in
Schedule I annexed hereto, as the same may be amended pursuant hereto from
time to time), and including all Trademark Rights with respect thereto and
all federal, state and foreign Registrations therefor heretofore or
hereafter granted or applied for, the right (but not the obligation) to
register claims under any state or federal trademark law or regulation or
any trademark law or regulation of any foreign country and to apply for,
renew and extend the Trademarks, Registrations and Trademark Rights, the
right (but not the obligation) to xxx or bring opposition or cancellation
proceedings in the name of such Grantor or in the name of Secured Party or
otherwise for past, present and future infringements of the Trademarks,
Registrations or Trademark Rights and all rights (but not obligations)
corresponding thereto in the United States and any foreign country, and
the Associated Goodwill; it being understood that the rights and interests
included herein shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of such
Grantor pertaining to the Trademarks, Registrations or Trademark Rights
presently or in the future owned or used by third parties but, in the case
of third parties which are not Affiliates of such Grantor, only to the
extent permitted by such licensing or other contracts or otherwise
permitted by applicable law and, if not so permitted under any such
contracts and applicable law, only with the consent of such third parties;
(b) the following documents and things in such Grantor's possession,
or subject to such Grantor's right to possession, related to (Y) the
production, sale and delivery by such Grantor, or by any Affiliate,
licensee or subcontractor of such Grantor, of products or services sold or
delivered by or under the authority of such Grantor in connection with the
Trademarks, Registrations or Trademark Rights (which products and services
shall, for purposes of this Agreement, be deemed to include, without
limitation, products and services sold or delivered pursuant to
merchandising operations utilizing any Trademarks, Registrations or
Trademark Rights); or (Z) any retail or other merchandising operations
conducted under the name of or in connection with the Trademarks,
Registrations or Trademark Rights by such Grantor or any Affiliate,
licensee or subcontractor of such Grantor:
XI-3
(i) all lists and ancillary documents that identify and
describe any of such Grantor's customers, or those of their
Affiliates, licensees or subcontractors, for products sold and
services delivered under or in connection with the Trademarks or
Trademark Rights, including without limitation any lists and
ancillary documents that contain a customer's name and address, the
name and address of any of its warehouses, branches or other places
of business, the identity of the Person or Persons having the
principal responsibility on a customer's behalf for ordering
products or services of the kind supplied by such Grantor, or the
credit, payment, discount, delivery or other sale terms applicable
to such customer, together with information setting forth the total
purchases, by brand, product, service, style, size or other
criteria, and the patterns of such purchases;
(ii) all product and service specification documents and
production and quality control manuals used in the manufacture or
delivery of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and address of any
source of supply, and any terms of purchase and delivery, for any
and all materials, components and services used in the production of
products and services sold or delivered under or in connection with
the Trademarks or Trademark Rights; and
(iv) all documents constituting or concerning the then current
or proposed advertising and promotion by such Grantor or its
Affiliates, licensees or subcontractors of products and services
sold or delivered under or in connection with the Trademarks or
Trademark Rights including, without limitation, all documents which
reveal the media used or to be used and the cost for all such
advertising conducted within the described period or planned for
such products and services; and
(c) all patents and patent applications and rights and interests in
patents and patent applications that are presently, or in the future may
be, owned, held (whether pursuant to a license or otherwise) or used by
such Grantor in whole or in part (including, without limitation, the
patents and patent applications listed in Schedule II annexed hereto, as
the same may be amended pursuant hereto from time to time), all rights
(but not obligations) corresponding thereto (including without limitation
the right (but not the obligation) to xxx for past, present and future
infringements in the name of such Grantor or in the name of Secured
Party), and all re-issues, divisions, continuations, renewals, extensions
and continuations-in-part thereof (all of the foregoing being collectively
referred to as the "Patents"); it being understood that the rights and
interests assigned hereby shall include, without limitation, all rights
and interests pursuant to licensing or other contracts in favor of such
Grantor pertaining to any Patent presently or in the future owned, held or
used by third parties but, in the case of third parties which are not
Affiliates of such Grantor, only to the extent permitted by such licensing
XI-4
or other contracts or otherwise permitted by applicable law and, if not so
permitted under any such contracts and applicable law, only with the
consent of such third parties;
(d) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that
at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(e) all proceeds, products, rents and profits (including without
limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not Secured
Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of
the foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral assigned by each Grantor is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured Obligations
with respect to such Grantor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreement, and
(b) with respect to each Additional Grantor, all obligations and
liabilities of every nature of Grantors now or hereafter existing under or
arising out of or in connection with the Subsidiary Guaranty,
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased,
XI-5
created or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party or any Lender or Interest
Rate Exchanger as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement.
SECTION 3. Grantors Remains Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as of the date it becomes a party
hereto as follows:
(a) Ownership of Collateral. Except as expressly permitted by the
Credit Agreement and for the security interest assigned and created by
this Agreement, such Grantor is the legal and beneficial owner of the
entire right, title and interest in and to (i) each Material Trademark
Property (as defined in subsection 4(b) of this Agreement), free and clear
of any Lien other than Liens of mechanics, materialmen, attorneys and
other similar liens imposed by laws in the ordinary course of business in
connection with the establishment, creation or application for
Registration of any Trademarks, Registrations or Trademark Rights for sums
not yet delinquent or being contested in good faith (such Liens being
referred to herein as "Permitted Trademark Liens"), and (ii) each Material
Patent (as defined in subsection 4(b) of this Agreement), free and clear
of any Lien other than Liens of mechanics, materialmen, attorneys and
other similar liens imposed by law in the ordinary course of business in
connection with the establishment, creation or application for any Patent
for sums not yet delinquent or being contested in good faith (such Liens
being referred to herein as "Permitted Patent Liens"). Except such as may
have been filed in favor of Secured Party relating to this Agreement, no
effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office, including the United States Patent and Trademark Office.
XI-6
(b) Description of Collateral. A true and complete list of all
Trademarks, Registrations and Trademark Rights owned or held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part,
as of the date such Grantor has entered into this Agreement is set forth
in Schedule I annexed hereto. Each Trademark, Registration or Trademark
Right designated on Schedule I annexed hereto as a Material Trademark
Property, and each other Trademark, Registration or Trademark Right
hereafter arising or otherwise owned or held by any Grantor that is
material to any of such Grantor's business or operations is referred to
herein as a "Material Trademark Property". A true and complete list of all
Patents owned or held (whether pursuant to a license or otherwise) by such
Grantor, in whole or in part, as of the date such Grantor has entered into
this Agreement is set forth in Schedule II annexed hereto. Each Patent
designated on Schedule II annexed hereto as a Material Patent and each
other Patent hereafter arising or otherwise owned or held by such Grantor
that is material to any of such Grantor's business or operations is
referred to herein as a "Material Patent".
(c) Validity and Enforceability of Collateral. To the knowledge of
Grantors, each Material Trademark Property and each Material Patent is
valid, subsisting and enforceable. As of the date each Grantor has entered
into this Agreement, such Grantor is not aware of any pending or
threatened claim by any third party that any Material Trademark Property
or any Material Patent is invalid or unenforceable or that the use of any
Material Trademark Property or any Material Patent violates the rights of
any third person or of any basis for any such claim, and there is no such
pending or threatened claim whether arising prior to or after the Closing
Date, that could reasonably be expected to have a Material Adverse Effect.
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Collateral is at the locations set forth on Schedule III
annexed hereto.
(e) Names. No Grantor has in the past done, and no Grantor now does,
business under any other name (including any tradename or fictitious
business name) except under the names listed on Schedule IV annexed
hereto.
(f) Perfection. The security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers hereunder constitute valid security interests in the
Collateral. Upon the filing of UCC financing statements naming each
Grantor as "debtor", naming Secured Party as "secured party" and
describing the Collateral in the filing offices set forth on Schedule V
annexed hereto and the recording of this Agreement with the United Sates
Patent and Trademark Office, the security interests in the Collateral
granted to Secured Party for the ratable benefit of the Lenders and
Interest Rate Exchangers will, to the extent a security interest in the
Collateral may be perfected by filing UCC financing statements and
recording this Agreement, constitute valid and perfected security
interests therein prior to all other Liens (subject only to Permitted
Patent Liens and Permitted Trademark Liens).
XI-7
SECTION 5. Further Assurances; New Trademarks, Registrations and Trademark
Rights; New Patents and Patent Applications; Certain Inspection
Rights.
(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest assigned or purported to be assigned or granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will: (i) at the request of Secured Party, take reasonable steps to
indicate that such Collateral is subject to the security interest granted
hereby, (ii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (iii) use its
best efforts to obtain any necessary consents of third parties to the assignment
and perfection of a security interest to Secured Party with respect to any
Collateral, and (iv) at Secured Party's request, appear in and defend any action
or proceeding that may materially affect such Grantor's title to or Secured
Party's security interest in all or any part of the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor hereby authorizes Secured Party to modify this Agreement
without obtaining such Grantor's approval of or signature to such modification
by (i) amending Schedule I annexed hereto to include reference to any right,
title or interest in any existing Trademark, Registration or Trademark Right or
any Trademark, Registration or Trademark Right acquired or developed by any
Grantor after its execution hereof or to delete any reference to any right,
title or interest in any Trademark, Registration or Trademark Right in which no
Grantor has or claims any right, title or interest, or (ii) amending Schedule II
annexed hereto to include reference to any right, title or interest in any
existing Patent or any Patent acquired or developed by any Grantor after its
execution hereof or to delete any reference to any right, title or interest in
any Patent in which no Grantor has or claims any right, title or interest.
(d) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(e) If any Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, or to any patentable inventions, or become
entitled to the benefit of any patent application or patent or any reissue,
division, continuation, renewal, extension, or continuation-in-part of any
Patent or any improvement in any Patent, the provisions of this
XI-8
Agreement shall automatically apply thereto. Each Grantor shall promptly notify
Secured Party in writing of any of the foregoing rights or benefits, including,
without limitation, rights to any new Trademarks or Trademark Rights, acquired
by such Grantor after the date hereof and of any Registrations issued or
applications for Registration made after the date hereof, which notice shall
state whether such Trademark, Registration or Trademark Right constitutes a
Material Trademark Property or whether such Patent constitutes a Material
Patent. Within a reasonable time after the filing of an application for
Registration for any Trademark, or an application for any Patent the applicable
Grantor shall execute, deliver and record in all places where this Agreement is
recorded an appropriate Patent and Trademark Security Agreement, substantially
in the form hereof, with appropriate insertions, or an amendment to this
Agreement, in form and substance satisfactory to Secured Party, pursuant to
which such Grantor shall assign and grant a security interest to the extent of
its interest in such Registration or Patent as provided herein to Secured Party
unless so doing would, in the reasonable judgment of such Grantor, after due
inquiry, result in the grant of a Patent or Registration in the name of Secured
Party, in which event such Grantor shall give written notice to Secured Party as
soon as reasonably practicable and the filing shall instead be undertaken as
soon as practicable but in no case later than immediately following the grant of
such Patent or Registration.
(f) Each Grantor hereby grants to Secured Party and its employees,
representatives and agents the right to visit such Grantor's and any of its
Affiliate's or subcontractor's plants, facilitates and other places of business
that are utilized in connection with the manufacture, production, inspection,
storage or sale of products and services sold or delivered under any of the
Patents, Trademarks, Registrations or Trademark Rights (or which were so
utilized during the prior six month period), and to inspect the quality control
and all other records relating thereto upon reasonable notice to such Grantor
and as often as my be reasonably requested.
SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business or chief executive office or the
office where such Grantor keeps its records regarding the Collateral;
(d) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except
to the extent the validity thereof
XI-9
is being contested in good faith; provided that such Grantor shall in any
event pay such taxes, assessments, charges, levies or claims not later
than five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against such Grantor or any
of the Collateral as a result of the failure to make such payment;
(e) not sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement;
(f) except for Permitted Patent Liens and Permitted Trademark Liens
and the security interest assigned and created by this Agreement, not
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person;
(g) diligently keep reasonable records respecting the Collateral
assigned by it hereunder and at all times keep at least one complete set
of its records concerning substantially all of the Patents, Trademarks,
Registrations and Trademark Rights at its chief executive office or
principal place of business;
(h) not permit the inclusion in any contract to which it becomes a
party of any provision that could or might in any way conflict with this
Agreement or impair or prevent the assignment and creation of a security
interest in any Grantor's rights and interests in any property included
within the definitions of any Patents, Trademarks, Registrations,
Trademark Rights and Associated Goodwill acquired;
(i) use proper statutory notice in connection with its use of each
Material Patent and Material Trademark Property to the extent reasonably
necessary for the protection of such Material Patent or Material Trademark
Property;
(j) use consistent standards of quality (which may be consistent
with such Grantor's past practices) in the manufacture, sale and delivery
of products and services sold or delivered under or in connection with the
Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its retail stores and
other merchandising operations; and
(k) upon any officer of such Grantor obtaining knowledge thereof,
promptly notify Secured Party in writing of any event that may materially
and adversely affect the value of the Collateral or any portion thereof,
the ability of any Grantor or Secured Party to dispose of the Collateral
or any portion thereof, or the rights and remedies of Secured Party in
relation thereto, including without limitation the levy of any legal
process against the Collateral or any portion thereof.
XI-10
SECTION 7. Amounts Payable in Respect of the Collateral.
Except as otherwise provided in this Section 7, each Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
Grantors in respect of the Collateral or any portion thereof. In connection with
such collections, each Grantor may take (and, at Secured Party's direction,
shall take) such action as such Grantor or Secured Party may deem necessary or
advisable to enforce collection of such amounts; provided, however, that Secured
Party shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default or a Potential Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
assigned and created hereby, and to direct such obligors to make payment of all
such amounts directly to Secured Party, and, upon such notification and at the
expense of Grantors, to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done. After receipt by such Grantor
of the notice from Secured Party referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including checks and other instruments)
received by such Grantor in respect of amounts due to such Grantor in respect of
the Collateral or any portion thereof shall be received in trust for the benefit
of Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 14, and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
SECTION 8. Patent or Trademark Applications and Litigation.
(a) Each Grantor shall have the duty diligently to prosecute any trademark
application relating to any Material Trademark Property that is pending as of
the date such Grantor has entered into this Agreement, to make federal
application on any existing or future registerable but unregistered Material
Trademark Property (whenever it is commercially reasonable in the reasonable
judgement of such Grantor to do so), and to file and prosecute opposition and
cancellation proceedings, renew Registrations and do any and all acts which are
necessary or desirable to preserve and maintain all rights in all Material
Trademark Properties. Any expenses incurred in connection therewith shall be
borne solely by Grantors. No Grantor shall abandon any Material Trademark
Property unless it is commercially reasonable in the judgment of such Grantor to
do so.
(b) Each Grantor shall have the duty diligently to prosecute any patent
application relating to any Material Patent that is pending as of the date such
Grantor has entered into this Agreement and to do any and all acts which are
necessary or desirable to preserve and maintain all rights in all Material
Patents. Any expenses incurred in connection therewith shall be borne solely by
Grantors. Each Grantor shall not, as to any patentable invention or Patent that
constitutes or could constitute a Material Patent, abandon any pending patent
application or any Patent without the prior written consent of Secured Party.
XI-11
(c) Except as provided in Section 8(e), each Grantor shall have the right
to commence and prosecute in its own name, as real party in interest, for its
own benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution or other damage as are in its
reasonable business judgment necessary to protect the Collateral. Secured Party
shall provide, at Grantor's expense, all reasonable and necessary cooperation in
connection with any such suit, proceeding or action including, without
limitation, joining as a necessary party.
(d) Each Grantor shall promptly, following its becoming aware thereof,
notify Secured Party of the institution of, or of any adverse determination in,
any proceeding (whether in the United States Patent and Trademark Office or any
federal, state, local or foreign court) described in subsection 8(a), 8(b) or
8(c) or regarding such Grantor's claim of ownership in or right to use any of
the Trademarks, Registrations or Trademark Rights, its right to register the
same, or its right to keep and maintain such Registration. Such Grantor shall
provide to Secured Party any information with respect thereto requested by
Secured Party.
(e) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, Secured Party
shall have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Patent, Trademark,
Registration, Trademark Right and any license thereunder and to enforce its
rights hereunder in Associated Goodwill, in which event each Grantor shall, at
the request of Secured Party, do any and all lawful acts and execute any and all
documents required by Secured Party in aid of such enforcement and each Grantor
shall promptly, upon demand, reimburse and indemnify Secured Party as provided
in Section 15 in connection with the exercise of its rights under this Section
8. To the extent that Secured Party shall elect not to bring suit to enforce any
Patent, Trademark, Registration, Trademark Right or any license thereunder or to
enforce its rights hereunder in Associated Goodwill as provided in this Section
8(e), each Grantor agrees to use all reasonable measures, whether by action,
suit, proceeding or otherwise, to prevent the infringement of any of the
Patents, Trademarks, Registrations or Trademark Rights or of Grantors' or
Secured Party's rights in Associated Goodwill by others and for that purpose
agrees to diligently maintain any action, suit or proceeding against any Person
so infringing necessary to prevent such infringement.
SECTION 9. Non-Disturbance Agreements, etc.
If and to the extent that any Grantor is permitted to license the
Collateral, Secured Party shall enter into a non-disturbance agreement or other
similar arrangement, at Grantors' request and expense, with such Grantor and any
licensee of any Collateral permitted hereunder in form and substance
satisfactory to Secured Party pursuant to which (a) Secured Party shall agree
not to disturb or interfere with such licensee's rights under its license
agreement with such Grantor so long as such licensee is not in default
thereunder and (b) such licensee shall acknowledge and agree that the Collateral
licensed to it is subject to the security interest assigned and created in favor
of Secured Party and the other terms of this Agreement.
XI-12
SECTION 10. Secured Party Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to endorse such Grantor's name on all applications, documents,
papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to
become obligations of such Grantor to Secured Party, due and payable
immediately without demand; and
(f) upon the occurrence and during the continuance of an Event of
Default, (i) to execute and deliver any of the assignments or documents
requested by Secured Party pursuant to Section 13(b), (ii) to grant or
issue an exclusive or non-exclusive license to the Collateral or any
portion thereof to any Person, and (iii) otherwise generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party
were the absolute owner thereof for all purposes, and to do, at Secured
Party's option and Grantors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
XI-13
SECTION 11. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
such Grantor under Section 15.
SECTION 12. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for monies actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property of a similar nature.
SECTION 13. Remedies.
If any Event of Default shall have occurred and be continuing:
(a) Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to the affected
Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured
Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be
designated by Secured Party that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store the Collateral or otherwise prepare
the Collateral for disposition in any manner to the extent Secured Party
deems appropriate, (iv) take possession of any Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use
the same for the purpose of taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, (v) exercise any and
all rights and remedies of Grantors under or in connection with the
contracts related to the Collateral or otherwise in respect of the
Collateral, including without limitation any and all rights of Grantors to
demand or otherwise require payment of any amount under, or performance of
any provision of, such contracts, and (vi) without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such
XI-14
time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable. Secured Party or any
Lender or Interest Rate Exchanger may be the purchaser of any or all of
the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender
or Lenders or Interest Rate Exchanger or Interest Rate Exchangers in its
or their respective individual capacities unless Requisite Obligees (as
defined in Section 17(a)) shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Collateral sold at any
such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by
Secured Party at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it
now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten days'
notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may
have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if Secured Party accepts the
first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations, Grantors
shall be jointly and severally liable for the deficiency and the fees of
any attorneys employed by Secured Party to collect such deficiency.
(b) Upon written demand from Secured Party, each Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Patents, Trademarks, Registrations, Trademark Rights and the Associated
Goodwill and such other documents as are requested by Secured Party. Each
Grantor agrees that such an assignment and/or recording shall be applied
to reduce the Secured Obligations outstanding only to the extent that
Secured Party (or any Lender) receives cash proceeds in respect of the
sale of, or other realization upon, the Collateral.
(c) Within five Business Days after written notice from Secured
Party, each Grantor shall make available to Secured Party, to the extent
within each applicable Grantor's power and authority, such personnel in
such Grantor's employ on the date of such Event of Default as Secured
Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered by such
Grantor under or in connection with the Patents, Trademarks, Registrations
and Trademark Rights, such
XI-15
persons to be available to perform their prior functions on Secured
Party's behalf and to be compensated by Secured Party at Grantors' expense
on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default.
SECTION 14. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Credit Agreement.
SECTION 15. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including without
limitation enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's or such Lender's or
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 15 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Interest Rate Agreements, the Credit Agreement and the
other Loan Documents.
SECTION 16. Continuing Security Interest; Transfer of Loans.
This Agreement shall assign and create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the payment
in full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the
XI-16
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to Lenders herein or otherwise. Upon
the payment in full of all Secured Obligations, the cancellation or termination
of the Commitments and the cancellation or expiration of all outstanding Letters
of Credit, the security interest assigned and granted hereby shall terminate and
all rights to the Collateral shall revert to the applicable Grantors. Upon any
such termination Secured Party will, at Grantors' expense, execute and deliver
to Grantors such documents as Grantors shall reasonably request to evidence such
termination.
SECTION 17. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 13 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 17(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Interest
Rate Exchanger that all rights and remedies hereunder may be exercised solely by
Secured Party for the benefit of Lenders and Interest Rate Exchangers in
accordance with the terms of this Section 17(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and
XI-17
other documents necessary or appropriate in connection with the performance of
the duties of the successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Secured Party of the security
interests created hereunder, whereupon such retiring or removed Secured Party
shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Administrative Agent's resignation or removal hereunder
as Secured Party, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Secured Party hereunder.
SECTION 18. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided that any amendment hereto pursuant to Section 21 or Section 5(c) shall
be effective upon execution by any Additional Grantor and Grantors hereby waive
any requirement of notice of or consent to any such amendment. Any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 19. Notices.
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 20. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
XI-18
SECTION 21. Additional Grantors.
From time to time subsequent to the date hereof, Subsidiaries of Company
may become parties hereto as additional Grantors (each an "Additional Grantor")
by executing an acknowledgement to this Agreement substantially in the form of
Schedule VI annexed hereto. Upon delivery of any such acknowledgment to
Administrative Agent and Secured Party, notice of which is hereby waived by
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 22. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 23. Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 24. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are
XI-19
used herein as therein defined. The rules of construction set forth in
subsection 1.3 of the Credit Agreement shall be applicable to this Agreement
mutatis mutandis.
SECTION 25. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX
XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 19; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 25 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 26. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Each Grantor and Secured Party
acknowledge that this waiver is a material inducement for Grantors and Secured
Party to enter into a business relationship, that Grantors and Secured Party
have already relied on this waiver in entering into this Agreement and that each
will continue to rely on this waiver in their related future dealings. Each
Grantor and Secured Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
XI-20
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 26 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 27. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
XI-21
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MBW FOODS INC.
By: ________________________________
Name:
Title:
XX-00
XXX XXXXX XXXXXXXXX BANK,
as Secured Party
By: ________________________________
Name: Xxxxx Xxxxx
Title: Vice President
XI-23
SCHEDULE I
TO
PATENT AND TRADEMARK SECURITY AGREEMENT
Registered United States Trademark Registration Registration
Owner Description Number Date
---------- ----------------------- ------------ ------------
XI-I-1
SCHEDULE II
TO
TO PATENT AND SECURITY AGREEMENT
PATENTS ISSUED
--------------
Patent No. Issue Date Invention
---------- ---------- ---------
PATENTS PENDING
---------------
Applicant's Date Application
Name Filed No. Invention Inventor
---- ----- ----------- --------- --------
XI-II-1
SCHEDULE III
TO
PATENT AND TRADEMARK SECURITY AGREEMENT
Office Locations
----------------
Name of Grantor Office Location
--------------- ---------------
XI-III-1
SCHEDULE IV
TO
PATENT AND TRADEMARK SECURITY AGREEMENT
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
XI-IV-1
SCHEDULE V
TO
PATENT AND TRADEMARK SECURITY AGREEMENT
Filing Offices
--------------
XI-V-1
SCHEDULE VI
TO PATENT AND TRADEMARK SECURITY AGREEMENT
[FORM OF ACKNOWLEDGEMENT]
This Acknowledgement, dated _______________, [199_] [200_], is delivered
pursuant to Section 20 of the Patent and Trademark Security Agreement referred
to below. The undersigned hereby agrees that this Acknowledgement may be
attached to the Patent and Trademark Security Agreement dated December __, 1996,
by and among the Grantors referred to therein and The Chase Manhattan Bank, as
Secured Party (the "Patent and Trademark Security Agreement", capitalized terms
defined therein being used herein as therein defined), that the undersigned by
executing and delivering this Acknowledgement hereby becomes a Grantor under the
Patent and Trademark Security Agreement in accordance with Section 20 thereof
and agrees to be bound by all of the terms thereof, and that the Patents,
Registrations and Trademark Rights described on this Acknowledgement shall be
deemed to be part of the and shall become part of the Collateral and shall
secure all Secured Obligations.
[NAME OF ADDITIONAL GRANTOR]
By: ________________________________
Name:
Title:
Notice Address:
__________________________________
__________________________________
__________________________________
__________________________________
Trademark Registrations
-----------------------
Registered Trademark Registration Registration
Owner Description Number Date Jurisdiction
---------- ----------- ------------ ------------- ------------
Patents Issued
--------------
XI-VI-1
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
Patents Pending
---------------
Applicant's Name Date Filed Application No. Invention Inventor
---------------- ---------- --------------- --------- --------
XI-VI-2
EXHIBIT XII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Title] of MBW Foods Inc., a Delaware
corporation ("Company");
(2) I have reviewed the terms of that certain Credit Agreement dated
as of December __, 1996, by and among Company, MBW Holdings Inc., a
Delaware corporation, the financial institutions listed therein as
Lenders, The Chase Manhattan Bank, as Administrative Agent, and Chase
Securities Inc., as Arranging Agent, as amended, restated, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so
amended, restated, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), and the terms
of the other Loan Documents, and I have made, or have caused to be made
under my supervision, a review in reasonable detail of the transactions
and condition of Company and its Subsidiaries during the accounting period
covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the existence of any condition or
event which constitutes an Event of Default or Potential Event of Default
during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate[, except as set
forth below].
[Set forth [below] [in a separate attachment to this Certificate] are all
exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking, or proposes to take with respect to each such
condition or event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________]
XII-1
The foregoing certifications, together with the computations set forth in
Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this __________ day of _____________, [199_] [200_] pursuant to
subsection 6.1(iv) of the Credit Agreement.
MBW FOODS INC.
By:__________________________________
Name:
Title:
XII-2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ____________, [199_][200_] and pertains to the period
from ____________, [199_][200_] to ____________, [199_][200_]. Subsection
references herein relate to subsections of the Credit Agreement.
A. Indebtedness
1. Indebtedness under Capital Leases of the type
described in subsection 7.1(iii)(a): $______________
2. Indebtedness in respect of sale and lease-back
transactions expressly permitted under
subsection 7.8: $______________
3. Indebtedness secured by Liens permitted under
subsection 7.2A(iii): $______________
4. Indebtedness of the type described in subsection
7.1(iii) (A.1 + A.2 + A.3): $______________
5. Maximum Indebtedness permitted under subsection
7.1(iii): $5,000,000
6. Aggregate principal amount of Permitted Seller
Notes issued after the Closing Date: $______________
7. Maximum principal amount permitted under
subsection 7.1(ix): $10,000,000
8. Indebtedness of the type described in subsection
7.1(ix): $______________
9. Maximum Indebtedness permitted under subsection
7.1(viii): $5,000,000
B. Liens
1. Indebtedness secured by Liens described in
subsection 7.2A(iii): $______________
XII-A-1
2. Original purchase price (or cost of acquisition,
construction or improvement) of assets financed
with Indebtedness secured by Liens permitted
under subsection 7.2A(iii): $______________
3. Percentage of purchase price (or cost of
acquisition, construction or improvement)
financed with Indebtedness secured by Liens
permitted under subsection 7.2A(iii)
((B.1)/(B.2)): ______________
4. Maximum percentage permitted to be financed
under subsection 7.2A(iii): 100%
5. Minimum percentage permitted to be financed
under subsection 7.2A(iii): 80%
6. Proceeds of Indebtedness permitted by subsection
7.1(iii)(b) incurred during period and secured
by Liens on assets: $______________
7. Fair market value of assets securing Liens
described in item B.6: $______________
8. Percentage of fair market value constituted by
proceeds of Indebtedness ((B.6)/(B.7)): ______________
9. Minimum percentage permitted under subsection
7.2A(iv): 80%
10. Indebtedness secured by Liens described in
subsection 7.2A(v): $______________
11. Maximum Indebtedness permitted to be secured by
Liens under subsection 7.2A(v): $2,500,000
C. Investments
1. Investments consisting of advances made during
Fiscal Year-to-date to Holdings to make payments
contemplated by subsection 7.5(vi)(a): $______________
2. Maximum permitted under subsection 7.5(vi)(a): $250,000
3. Outstanding amount of loans and advances to
employees
XII-A-2
and directors of Holdings or Company of the type
described in subsection 7.3(vii): $______________
4. Maximum permitted under subsection 7.3(vii): $1,000,000
5. Investments of the type described in subsection
7.3(viii): $______________
6. Maximum permitted under subsection 7.3(viii): $2,500,000
D. Contingent Obligations
1. Net amount which Company would be liable to pay
to counterparties under Interest Rate Agreements
of the type described in subsection 7.4(iii) in
the event such Interest Rate Agreements were
terminated on the date hereof: $______________
2. Maximum amount permitted under subsection
7.4(iii): $2,500,000
3. Contingent Obligations under guarantees in the
ordinary course of business of the type
described in subsection 7.4(v): $______________
4. Maximum permitted under subsection 7.4(v): $250,000
5. Contingent Obligations of the type described in
subsection 7.4(vii): $______________
6. Maximum permitted under subsection 7.4(vii): $250,000
E. Restricted Junior Payments
1. Restricted Junior Payments made during Fiscal
Year-to-date of the type described in subsection
7.5(vi)(a): $______________
2. Aggregate advances made during Fiscal
Year-to-date to Holdings to make payments
contemplated by subsection 7.5(vi)(a) (E.1 +
C.1): $______________
3. Maximum permitted under subsection 7.5(vi)(a): $250,000
XII-A-3
4. Restricted Junior Payments made after the
Closing Date of the type described in subsection
7.5(vii): $______________
5. Maximum permitted under subsection 7.5(vii): $2,000,000
F. Minimum Interest Coverage Ratio ([calculated on a pro
forma basis for Fiscal Quarters ending prior to the
Closing Date] for the four-Fiscal Quarter period
ending _____________, [199_] [200_])
1. Consolidated Net Income: $______________
2. Consolidated Interest Expense (to the extent
deducted in determining Consolidated Net
Income): $______________
3. Depreciation (to the extent deducted in
determining Consolidated Net Income): $______________
4. Depletion (to the extent deducted in determining
Consolidated Net Income): $______________
5. Amortization (to the extent deducted in
determining Consolidated Net Income): $______________
6. Federal, state, local and foreign income taxes
(to the extent deducted in determining
Consolidated Net Income): $______________
7. Transaction fees paid to the MDC Entities and/or
Dartford in connection with acquisitions made in
accordance with the terms of the MDC Advisory
Services Agreement and the Dartford Management
Agreement (to the extent deducted in determining
Consolidated Net Income): $______________
8. [PERIODS PRIOR TO FIRST ANNIVERSARY ONLY]
Non-recurring charges incurred with respect to
relocation of Company's assets (to the extent
deducted in determining Consolidated Net Income)
(if greater than $2,000,000, enter
"$2,000,000"): $______________
9. Other non-cash items reducing Consolidated Net
Income (to the extent deducted in determining
Consolidated Net Income): $______________
XII-A-4
10. Extraordinary and unusual losses (to the extent
deducted in determining Consolidated Net
Income): $______________
11. Non-cash items increasing Consolidated Net
Income: $______________
12. Extraordinary and unusual gains: $______________
13. Consolidated EBITDA ((F.1 + F.2 + F.3 + F.4 +
F.5 + F.6 + F.7 + F.8 + F.9 + F.10) - (F.11 +
F.12)): $______________
14. Consolidated Cash Interest Expense: $______________
15. Interest Coverage Ratio ((F.13):(F.14)): _____:1.00
16. Minimum Interest Coverage Ratio required under
subsection 7.6A: _____:1.00
G. Maximum Leverage Ratio ([calculated on a pro forma
basis for Fiscal Quarters ending prior to the Closing
Date] as of _____________, [199_] [200_])
1. Consolidated Total Debt: $______________
2. Cash on hand of Company minus $3,500,000 (if
difference is equal to or less than zero, enter
"0"): $______________
3. Consolidated EBITDA for the four-Fiscal Quarter
period ended on the above date (F.13 above): $______________
4. Leverage Ratio ((G.1 - G.2)/G.3): $______________
5. Maximum Leverage Ratio permitted under
subsection 7.6B: _____:1.00
H. Minimum Fixed Charge Coverage Ratio ([calculated on a
pro forma basis for Fiscal Quarters ending prior to
the Closing Date] for the four-Fiscal Quarter period
ending _____________, [199_] [200_])
1. Consolidated EBITDA (F.13 above): $______________
2. Scheduled amortization of Indebtedness of
Holdings and its Subsidiaries (as reduced by
prepayments previously made),
XII-A-5
and discount or premium relating to any such
Indebtedness, whether expensed or capitalized: $______________
3. Consolidated Cash Interest Expense (F.14 above): $______________
4. Consolidated Capital Expenditures: $______________
5. Taxes actually paid in cash by Holdings and its
Subsidiaries: $______________
6. Consolidated Fixed Charges (H.2 + H.3 + H.4 +
H.5): $______________
7. Fixed Charge Coverage Ratio ((H.1):(H.6)): _____:1.00
8. Minimum Fixed Charge Coverage Ratio required
under subsection 7.6C: _____:1.00
I. Consolidated Capital Expenditures (for the Fiscal Year
ending in December [199_] [200_] [to date])
1. Consolidated Capital Expenditures: $______________
2. Maximum Consolidated Capital Expenditures Amount
permitted under subsection 7.6D (as adjusted
(calculations and supporting information therefor
attached hereto) in accordance with the provisos to
such subsection): $______________
J. Fundamental Changes
1. Aggregate fair market value of assets sold in
Asset Sales described in subsection 7.7(vi)
during the period commencing _________________,
[199_] [200_]: $______________
2. Consolidated EBITDA (F.13 above): $______________
3. Maximum Asset Sales permitted under subsection
7.7(vi) (.10 x (J.2)): $______________
4. Consideration received in Asset Sales described
in subsection 7.7(vi) during the period
commencing _________________, [199_] [200_]: $______________
XII-A-6
5. Cash consideration received in Asset Sales
described in subsection 7.7(vi) during the
period commencing _________________, [199_]
[200_]: $______________
6. Minimum cash consideration permitted under
subsection 7.7(vi) (.80 x (J.4)): $______________
[K. Consolidated Excess Cash Flow (for the Fiscal Year ending
December 31, [199_] [200_]) [ONLY USE FOR FISCAL YEARS
[1998] [1999] AND THEREAFTER]
1. Consolidated EBITDA (F.13 above): $______________
2. Extraordinary and unusual cash gains (to the
extent included in item F.12 above): $______________
3. Consolidated Working Capital Adjustment: $______________
4. Voluntary and scheduled cash repayments of
Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the
Revolving Loan Commitments are permanently
reduced): $______________
5. Consolidated Capital Expenditures (net of any
proceeds of related financings with respect to
such expenditures): $______________
6. Expenditures made in connection with any
Permitted Acquisition pursuant to subsection
7.7(vii) (net of any proceeds of related
financings with respect to such acquisitions),
including without limitation transaction fees
paid in cash to the MDC Entities and/or Dartford
in connection with such acquisitions in
accordance with the terms of the MDC Advisory
Services Agreement and the Dartford Management
Agreement: $______________
7. Consolidated Interest Expense (F.14 above): $______________
8. Extraordinary and unusual cash losses (to the
extent included in item F.10 above): $______________
XII-A-7
9. Provision for current taxes based on income of
Holdings and its Subsidiaries and payable in
cash with respect to such period: $______________
10. Consolidated Excess Cash Flow ((K.1 + K.2 + K.3)
- (K.4 + K.5 + K.6 + K.7 + K.8 + K.9)): $______________
11. Portion of Consolidated Excess Cash Flow
required to be prepaid (.50 x (K.10)): $_____________]
XII-A-8
EXHIBIT XIII
[FORM OF OPINION OF WHITE & CASE]
[Closing Date]
The Chase Manhattan Bank,
as Administrative Agent under the Credit
Agreement referred to below, and
Chase Securities Inc.,
as Arranging Agent under the Credit Agreement
referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Lenders Listed on
Schedule A Annexed Hereto
Re: Credit Agreement dated as of December __, 1996, by and among
MBW Foods Inc., MBW Holdings Inc., the financial institutions
listed therein as Lenders, The Chase Manhattan Bank, as
Administrative Agent, and Chase Securities Inc., as Arranging
Agent
Ladies and Gentlemen:
We have acted as counsel to (i) MBW Foods Inc., a Delaware
corporation ("Company"), in connection with that certain Credit Agreement dated
as of December __, 1996 (the "Credit Agreement"; capitalized terms used herein
without definition have the same meanings as in the Credit Agreement), by and
among Company, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent, (ii) MBW Holdings Inc., a Delaware corporation ("Holdings"), in
connection with the Credit Agreement and that certain Holdings Guaranty dated as
of December __, 1996 (the "Holdings Guaranty"), in favor of and for the benefit
of Administrative Agent as Guarantied Party thereunder (Company and Holdings are
collectively referred to herein as "Loan Parties" and each individually as a
"Loan Party"), and (iii) Loan Parties in connection with documents executed in
connection with the Credit Agreement and the Holdings Guaranty. This opinion is
rendered to you in compliance with subsection 4.1O of the Credit Agreement.
In our capacity as such counsel, we have examined originals, or
copies identified to our satisfaction as being true copies, of such records,
documents or other instruments as in
XIII-1
our judgment are necessary or appropriate to enable us to render the opinions
expressed below. These records, documents and instruments included the
following:
(a) The Certificate of Incorporation of each of the Loan Parties, in
each case as amended to date;
(b) The Bylaws of each of the Loan Parties, in each case as amended
to date;
(c) All records of proceedings and actions of the respective Boards
of Directors of each of the Loan Parties relating to the Credit Agreement
and the transactions contemplated thereby;
(d) The Credit Agreement;
(e) The Term Notes, the Revolving Notes and the Swing Line Note
delivered on the Closing Date (collectively, the "Notes");
(f) The Collateral Account Agreement;
(g) The Holdings Guaranty;
(h) The Pledge Agreement;
(i) The Security Agreement;
(j) The Patent and Trademark Security Agreement;
(k) that certain Grant of Trademark Security Interest dated as of
December __, 1996 executed by Company;
(l) that certain Grant of Patent Security Interest dated as of
December __, 1996 executed by Company;
(m) The Subordinated Bridge Notes, the Subordinated Bridge Loan
Agreement and the other Subordinated Bridge Loan Documents; [and]
[(n) the Asset Purchase Agreement; and]
([o][p]) Copies of Uniform Commercial Code financing statements (the
"Financing Statements") to be filed in the filing offices listed for
Company and Holdings on Schedule 1 annexed hereto (the "Filing Offices")
in the States indicated therein (the "Relevant States").
The documents referenced in items (d) through (l) above are
collectively referred to herein as the "Loan Documents".
XIII-2
[NOTE: OPINIONS IN RESPECT OF THE SUBORDINATED BRIDGE
LOANS AND THE TRANSITION AGREEMENTS MAY BE REQUIRED]
In connection with this opinion, we have also examined such other
agreements, documents, certificates and other statements of government officials
and corporate officers of the Loan Parties and such other papers as we have
deemed necessary as a basis for such opinions. In all such examinations, we have
assumed the genuineness of all signatures on original and certified documents
(other than the signatures of officers of the Loan Parties on the Loan Documents
and the Financing Statements), and the conformity to original or certified
documents of all documents submitted to us as conformed or photostatic copies.
On the basis of the foregoing, and in reliance thereon, and subject
to the limitations, qualifications and exceptions set forth below, we are of the
opinion that:
12. Each Loan Party is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted.
13. Each Loan Party has all requisite corporate power and authority
to execute and deliver the Loan Documents to which it is a party and the
Financing Statements in which it is named as Debtor and to perform the Loan
Documents to which it is a party and to carry out the transactions contemplated
thereby.
14. The execution and delivery of each of the Loan Documents and the
Financing Statements and the performance of each of the Loan Documents have been
duly authorized by all necessary corporate action on the part of each Loan Party
which is a party thereto or which is named therein as a Debtor. Each Loan
Document and each Financing Statement has been duly executed and delivered by
each Loan Party which is a party thereto or which is named therein as a Debtor,
and each Loan Document constitutes the valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
15. None of the execution or delivery by the Loan Parties of the
Loan Documents to which it is a party or the Financing Statements in which it is
named as a debtor nor the performance by the Loan Parties of the Loan Documents
nor the consummation of the transactions contemplated thereby will (i) conflict
with, result in a breach or violation of, or constitute a default under, any of
the terms, conditions or provisions of (a) the Certificate of Incorporation or
Bylaws of any Loan Party, (b) any term of any material agreement or instrument
known to us to which any of the Loan Parties is a party or by which any of their
respective properties or assets are bound, or (c) any New York State or Federal
or Delaware corporation law, statute, rule or regulation (including, without
limitation, Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System) or any order, writ, judgment, injunction or decree of any New
York State or Federal court or other adjudicative body or
XIII-3
arbitrator to which Company or any Loan Party or any of their respective assets
or properties is subject and of which we are aware, or (ii) result in the
creation of any Lien upon any of the properties or assets of any Loan Party
under any agreement or order referred to in clause (b) or (c) above (other than
Liens created pursuant to the Loan Documents and the Financing Statements).
16. The authorized and outstanding capital stock of each Loan Party
is as set forth on Schedule B annexed hereto. Loan Parties indicated on Schedule
I annexed to the Pledge Agreement are the record owners of the Pledged Shares
(as defined in the Pledge Agreement). Upon delivery to Administrative Agent
pursuant to the Pledge Agreement of the certificates representing the Pledged
Shares, and assuming (i) continued possession by Administrative Agent (or an
agent of Administrative Agent) of the certificates representing the Pledged
Shares in the State or New York, (ii) that Administrative Agent has taken
delivery of the certificates representing the Pledged Shares in good faith and
(iii) that neither Administrative Agent nor any Lender has notice, prior to or
on the date of delivery of such Pledged Shares, of an adverse claim within the
meaning of the Uniform Commercial Code (the "UCC") as in effect on the date
hereof in the State of New York (the "New York UCC"), the execution of the
Pledge Agreement by the Loan Parties will create a perfected security interest
in favor of Administrative Agent in the Pledged Shares, which security interest
has priority over all other liens except as follows:
(a) we express no opinion as to any Loan Party's right in or
title to the Pledged Shares;
(b) priority may be subject to claims or liens in favor of the
United States, of any State of the United States or any agency,
instrumentality or political subdivision thereof, including, without
limitation, (i) liens for the payment of Federal, state or local
taxes which are given priority by operation of law, (ii) liens under
Title IV of the Employee Retirement Income Security Act of 1974, as
amended, and (iii) claims arising under the Federal Priority Statute
(31 U.S.C. ss. 3713);
(c) we express no opinion as to the security interest of
Administrative Agent in proceeds of or distributions on the Pledged
Shares; and
(d) we express no opinion as to the priority of the security
interests in the Pledged Shares as against any lien creditor (as
such term in defined in Article 9 of the New York UCC) or any buyer,
to the extent that the security interests therein purport to secure
any advances or other extensions of credit other than obligations
incurred pursuant to existing commitments under the Credit
Agreement.
17. Upon delivery to Administrative Agent pursuant to the Pledge
Agreement of the instruments representing the Pledged Debt (as defined in the
Pledge Agreement), and assuming (i) continued possession by Administrative Agent
(or an agent of Administrative Agent)
XIII-4
of the instruments representing the Pledged Debt in the State or New York, (ii)
that Administrative Agent has taken delivery of the instruments representing the
Pledged Debt in good faith and (iii) that neither Administrative Agent nor any
Lender has notice, prior to or on the date of delivery of such Pledged Debt, of
an adverse claim within the meaning of the New York UCC, the execution of the
Pledge Agreement by the Loan Parties will create a perfected security interest
in favor of Administrative Agent in the Pledged Debt, which security interest
has priority over all other liens except as follows:
(a) we express no opinion as to any Loan Party's right in or
title to the Pledged Debt;
(b) priority may be subject to claims or liens in favor of the
United States, of any State of the United States or any agency,
instrumentality or political subdivision thereof, including, without
limitation, (i) liens for the payment of Federal, state or local
taxes which are given priority by operation of law, (ii) liens under
Title IV of the Employee Retirement Income Security Act of 1974, as
amended, and (iii) claims arising under the Federal Priority Statute
(31 U.S.C. ss. 3713);
(c) we express no opinion as to the security interest of the
Administrative Agent in proceeds of or distributions on the
Pledged Debt; and
(d) we express no opinion as to the priority of the security
interests in the Pledged Debt as against any lien creditor (as such
term in defined in Article 9 of the New York UCC) or any buyer, to
the extent that the security interests therein purport to secure any
advances or other extensions of credit other than obligations
incurred pursuant to existing commitments under the Credit
Agreement.
18. The Security Agreement creates a valid lien and security
interest in favor of Administrative Agent in the Collateral (as defined in the
Security Agreement) purported to be covered thereby. The Financing Statements
are in appropriate form and upon the filing of such Financing Statements in the
applicable Filing Offices, assuming that the representations made by each of the
Loan Parties in the Security Agreement with respect to the locations of their
respective Collateral (as defined in the Security Agreement) are true and
correct, all filings, registrations and recordings necessary or appropriate to
create, maintain, preserve, protect and perfect the security interests granted
by each Loan Party to Administrative Agent under the Security Agreement in
respect of all Collateral (as defined in the Security Agreement) will have been
accomplished in accordance with the UCC as in effect on the date hereof in the
respective Relevant States and the security interests granted by the Loan
Parties to Administrative Agent pursuant to the Security Agreement in and to
such Collateral will constitute perfected security interests therein to the
extent that such Collateral consists of the type of property in which a security
interest may be perfected by filing a financing statement under the UCC as in
effect on the date hereof in the Relevant States except as follows:
XIII-5
(a) we express no opinion as to the security interest of the
Administrative Agent in proceeds of or distributions on the
Collateral;
(b) in the case of Collateral referred to in this paragraph 9,
Article 9 of the UCC requires the filing of continuation statements
within the period of six months prior to the expiration of five
years from the date of the original filings, in order to maintain
the effectiveness of the filings referred to in this paragraph; and
(c) in the case of property which becomes Collateral after the
date hereof, section 552 of the United States Bankruptcy Code limits
the extent to which priority acquired by a debtor after the
commencement of a case under the Federal Bankruptcy Code may be
subject to a security interest arising from a security agreement
entered into by the debtor before the commencement of such case.
19. Upon the filing of the Financing Statements relating to the
Collateral under the Patent and Trademark Security Agreement in the office of
the Secretary of State of the State of ______________ and the recording of the
Grant of Trademark Security Interest in the trademark records of the United
States Patent and Trademark Office (the "PTO") and the Grant of Patent Security
Interest in the patent records of the PTO, we are aware of no additional actions
to be taken in order to create and perfect security interests in favor of
Administrative Agent in the Trademarks (as defined in the Patent and Trademark
Security Agreement) described on Schedule I annexed to the Patent and Trademark
Security Agreement or the Patents (as defined in the Patent and Trademark
Security Agreement) described in Schedule II to the Patent and Trademark
Security Agreement. However, we express no opinion as to the sufficiency of the
foregoing actions to create and perfect security interests in such Patents and
Trademarks to the extent federal law is determined to be applicable to the
creation and perfection of such security interests. In addition, we express no
opinion as to whether federal law or the laws of the State of _____________
govern the validity or perfection of such security interests.
20. Upon receipt by Administrative Agent of any cash representing
Collateral under the Collateral Account Agreement and assuming Administrative
Agent maintains dominion and control of the Collateral Account in the manner set
forth in the Collateral Account Agreement, the Collateral Account Agreement will
create in favor of Administrative Agent a perfected security interest in the
Collateral Account.
21. The choice of law of the State of New York as the governing law
of each of the Loan Documents is a valid choice of law.
22. None of the Loan Parties is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. No Loan Party is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company"
XIII-6
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
23. All Obligations under the Credit Agreement are within the
definition of "Designated Senior Indebtedness" contained in the subordination
provisions of the Subordinated Bridge Loan Documents.
24. No law of the State of New York regulating the maximum rate of
interest which may be charged, taken or received applies to the Loans.
To the extent that the obligations of any of the Loan Parties may be
dependent upon such matters, we have assumed for purposes of this opinion, other
than with respect to the Loan Parties, that each additional party to the
agreements and contracts referred to herein is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; that each such other party has the requisite corporate or other
organizational power and authority to perform its obligations under such
agreements and contracts, as applicable; and that such agreements and contracts
have been duly authorized, executed and delivered by, and each of them
constitutes the legally valid and binding obligation of, such other parties, as
applicable, enforceable against such other parties in accordance with their
respective terms. Except as expressly covered in this opinion, we are not
expressing any opinion as to the effect of compliance by any Lender with any
state or federal laws or regulations applicable to the transactions because of
the nature of any of its businesses.
The opinions contained in paragraphs 3, 6, 7, 8 and 9 are subject to
the following additional limitations, qualifications, exceptions and
assumptions:
(a) We express no opinion as to the enforceability of any
indemnification or contribution provisions in the Loan Documents to
the extent the rights to indemnification or contribution provided
for therein are violative of any law, rule or regulation (including
any securities law, rule or regulation) or public policy relating
thereto.
(b) There may be limitations upon the exercise of remedial or
procedural provisions contained in the Loan Documents, but such
limitations do not make the rights and remedies provided in or
contemplated by the Loan Documents inadequate for the practical
realization of the rights and remedies afforded thereby.
(c) We express no opinion as the applicability to the Loan
Documents of Section 548 of the Bankruptcy Code (11 U.S.C. Section
548) or Article 10 of the New York Debtor and Creditor Law relating
to fraudulent transfers and obligations.
XIII-7
(d) We wish to point out that the law of the State of New York
generally imposes an obligation of good faith and reasonableness in
the performance and enforcement of contracts.
A copy of this opinion letter may be delivered by any of you to any
Eligible Assignee in connection with and at the time of any assignment and
delegation by any of you as a Lender to such Eligible Assignee of all or a
portion of your Loans and Commitments in accordance with the provisions of the
Credit Agreement, and such Eligible Assignee may rely on the opinions expressed
above as if this opinion letter were addressed and delivered to such Eligible
Assignee on the date hereof.
This opinion is rendered only to Arranging Agent, Administrative Agent and
Lenders and is solely for their benefit in connection with the above
transactions. This opinion may not be relied upon by Arranging Agent,
Administrative Agent or Lenders for any other purpose, or quoted to or relied
upon by any other person, firm or corporation for any purpose without our prior
written consent.
The opinions expressed above are limited to questions arising under the
Federal law of the United States, the General Corporation Law of the State of
Delaware and the law of the State of New York, except that our opinions set
forth in paragraph 7 above (to the extent governed by a law other than that of
the Federal law of the United States, the General Corporation Law of the State
of Delaware or the law of the State of New York) are based upon our review of
generally available compilations of law relating to such matters.
Very truly yours,
XIII-8
SCHEDULE A
The Chase Manhattan Bank
[INSERT NAMES OF ADDITIONAL LENDERS]
XIII-A-1
SCHEDULE B
[CAPITALIZATION OF LOAN PARTIES]
XIII-B-1
SCHEDULE 1
FILING OFFICES AND RELEVANT STATES
XIII-Sched. 1-1
EXHIBIT XIV
[FORM OF OPINION OF O'MELVENY & XXXXX LLP]
[Date]
1 9 9 6
148,999-056
[doc ID]
The Chase Manhattan Bank,
as Administrative Agent
Chase Securities Inc.,
as Arranging Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Loans to MBW Foods Inc.
Ladies and Gentlemen:
We have acted as counsel to The Chase Manhattan Bank, as Administrative
Agent (in such capacity, the "Administrative Agent"), and Chase Securities Inc.,
as Arranging Agent (in such capacity, the "Arranging Agent"), in connection with
the preparation and delivery of a Credit Agreement dated as of December __, 1996
(the "Credit Agreement") among MBW Foods Inc., a Delaware corporation
("Company"), MBW Holdings Inc., a Delaware corporation, the financial
institutions listed therein as lenders, Arranging Agent and Administrative Agent
(collectively, Administrative Agent and Arranging Agent are "Agents") and in
connection with the preparation and delivery of certain related documents.
We have participated in various conferences with representatives of
Company and Agents and conferences and telephone calls with White & Case and
Xxxxxxxx & X'Xxxx, LLP, counsel to Loan Parties, during which the Credit
Agreement and related matters have been discussed, and we have also participated
in the meeting held on the date hereof (the "Closing") incident to the funding
of the initial loans made under the Credit Agreement. We have reviewed the forms
of the Credit Agreement and the exhibits thereto, including the forms of the
promissory notes annexed thereto (the "Notes"), and the opinions of White &
XIV-2
The Chase Manhattan Bank
Chase Securities Inc.
[date]
Page 3
Case and Xxxxxxxx & X'Xxxx, LLP (collectively, the "Opinions"), and the
officers' certificates and other documents delivered at the Closing. We have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals or copies and the due authority of all persons
executing the same, and we have relied as to factual matters on the documents
that we have reviewed.
Although we have not independently considered all of the matters covered
by the Opinions to the extent necessary to enable us to express the conclusions
therein stated, we believe that the Credit Agreement and the exhibits thereto
are in substantially acceptable legal form and that the Opinions and the
officers' certificates and other documents delivered in connection with the
execution and delivery of, and as conditions to the making of the initial loans
under, the Credit Agreement and the Notes are substantially responsive to the
requirements of the Credit Agreement.
Respectfully submitted,
XIV-3
EXHIBIT XV
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is entered into by and
between the parties designated as Assignor ("Assignor") and Assignee
("Assignee") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "Schedule of
Terms") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, restated, supplemented or otherwise
modified to the date hereof and as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Effective upon the Settlement Date specified in Item 4 of the Schedule
of Terms (the "Settlement Date"), Assignor hereby sells and assigns to Assignee,
without recourse, representation or warranty (except as expressly set forth
herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Commitments and outstanding Loans, if any, which represents, as of
the Settlement Date, the percentage interest specified in Item 3 of the Schedule
of Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "Assigned Share"). Without limiting the generality of the
foregoing, the parties hereto hereby expressly acknowledge and agree that any
assignment of all or any portion of Assignor's rights and obligations relating
to Assignor's Revolving Loan Commitment shall include (i) in the event Assignor
is an Issuing Lender with respect to any outstanding Letters of Credit (any such
Letters of Credit being "Assignor Letters of Credit"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
XV-1
(b) In consideration of the assignment described above, Assignee hereby
agrees to pay to Assignor, on the Settlement Date, the principal amount of any
outstanding Loans included within the Assigned Share, such payment to be made by
wire transfer of immediately available funds in accordance with the applicable
payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of the Schedule of
Terms correctly sets forth the amount of the Commitments, the outstanding Term
Loan and the Pro Rata Share corresponding to the Assigned Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Agents, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitments, the outstanding Term
Loan and the Pro Rata Share corresponding to the Assigned Share as set forth in
Item 3 of the Schedule of Terms or on the interest of Assignee in any
outstanding Revolving Loans corresponding thereto, and (iii) from and after the
Settlement Date, Administrative Agent shall make all payments under the Credit
Agreement in respect of the Assigned Share (including without limitation all
payments of principal and accrued but unpaid interest, commitment fees and
letter of credit fees with respect thereto) (1) in the case of any such interest
and fees that shall have accrued prior to the Settlement Date, to Assignor, and
(2) in all other cases, to Assignee; provided that Assignor and Assignee shall
make payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor and/or Assignee
by Administrative Agent under the Loan Documents in respect of the Assigned
Share in the event that, for any reason whatsoever, the payment of consideration
contemplated by Section 1(b) occurs on a date other than the Settlement Date.
SECTION 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and beneficial
owner of the Assigned Share, free and clear of any adverse claim.
XV-2
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
Company or of any other Loan Party to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Assignor be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee; that
it has experience and expertise in the making or purchasing of loans such as the
Loans; that it has acquired the Assigned Share for its own account in the
ordinary course of its business and without a view to distribution of the Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 10.1 of the Credit Agreement, the disposition of the Assigned Share
or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from Assignor
such financial information regarding Company and its Subsidiaries as is
available to Assignor and as Assignee has requested, that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the assignment evidenced by this Agreement,
and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making of the initial Loans or at any time or
times thereafter, and Assignor shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
XV-3
SECTION 3. Miscellaneous.
(a) Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and
XV-4
attached to a single counterpart so that all signature pages are physically
attached to the same document.
(h) This Agreement shall become effective upon the date (the "Effective
Date") upon which all of the following conditions are satisfied: (i) the
execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
giving of notice to Company, (iii) the receipt by Administrative Agent of the
processing and recordation fee referred to in subsection 10.1B(i) of the Credit
Agreement, (iv) in the event Assignee is a Non-US Lender (as defined in
subsection 2.7B(iii)(a) of the Credit Agreement), the delivery by Assignee to
Administrative Agent of such forms, certificates or other evidence with respect
to United States federal income tax withholding matters as Assignee may be
required to deliver to Administrative Agent pursuant to said subsection
2.7B(iii)(a), (v) the execution of a counterpart hereof by Administrative Agent
as evidence of its consent hereto to the extent required under subsection
10.1B(i) of the Credit Agreement and by Administrative Agent as evidence of its
acceptance hereof in accordance with subsection 10.1B(ii) of the Credit
Agreement, (vi) the receipt by Administrative Agent of originals or
telefacsimiles of the counterparts described above and authorization of delivery
thereof, and (vii) the recordation by Administrative Agent in the Register of
the pertinent information regarding the assignment effected hereby in accordance
with subsection 10.1B(ii) of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
XV-5
SCHEDULE OF TERMS
1. Company: MBW FOODS INC., a Delaware corporation
2. Name and Date of Credit Agreement: Credit Agreement dated as of December
__, 1996, by and among Company, MBW Holdings Inc., a Delaware corporation,
the financial institutions listed therein as Lenders, The Chase Manhattan
Bank, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent.
3. Amounts: Re: Revolving
Re: Term Loans Loans
-------------- -------------
(a) Aggregate Commitments of all
all Lenders: $_______ $_______
(b) Assigned Share/Pro Rata Share: _____% ______%
(c) Amount of Assigned Share of
Commitments: $_______ $_______
(d) Amount of Assigned Share of
Term Loans: $_______
4. Settlement Date: ____________, [199_][200_]
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
XV-Schedule-1
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: ____________________ By: ____________________
Name: Name:
Title: Title:
Consented to and accepted in accor-
dance with subsections 10.1B(i) and
(ii) of the Credit Agreement
THE CHASE MANHATTAN
BANK,
as Administrative Agent
By:______________________
Name:
Title:
XV-Schedule-2
ANNEX A
Assignor Payment Instructions:
------------------------------
_______________________________
_______________________________
Attention:_____________________
Reference:_____________________
Assignor Notice Addresses:
--------------------------
_______________________________
_______________________________
Attention:_____________________
Reference:_____________________
XV-Schedule Annex A-1
ANNEX B
Assignor Payment Instructions:
------------------------------
_______________________________
_______________________________
Attention:_____________________
Reference:_____________________
Assignor Notice Addresses:
--------------------------
_______________________________
_______________________________
Attention:_____________________
Reference:_____________________
XV-Schedule Annex B-1
EXHIBIT XVI
[FORM OF PERMITTED SELLER NOTE]
% NON-NEGOTIABLE SUBORDINATED NOTE
[Insert Date] $_________________
MBW FOODS INC., a Delaware corporation (the "Borrower"), hereby
promises upon the terms and subject to the provisions hereof to pay to [NAME OF
SELLER] (the "Holder"), the principal amount of [ ] Dollars ($ ).
This % Non-Negotiable Junior Subordinated Note (the "Note") was issued
pursuant to the Purchase Agreement (the "Purchase Agreement") dated as of
[__________, [199_] [200_], between the Borrower and the Holder.
1. Definitions. As used herein, the following terms shall have the
following meanings:
"Indebtedness" means (i) all obligations for borrowed money or for
the deferred purchase price of property or services (including, without
limitation, all obligations contingent or otherwise in connection with
acceptance, letter of credit or similar facilities, (ii) all obligations
evidenced by bonds, notes, debentures or other similar instruments or
securities, (iii) all indebtedness created or arising under any sale and
leaseback arrangement, conditional sale or other title retention agreement with
respect to property owned or acquired (whether or not the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all rental obligations under
capital leases to the extent not included in clause (iii) above, (v) all
guarantees (direct or indirect), all contingent reimbursement obligations under
undrawn letters of credit and all other contingent obligations in respect of, or
obligations to purchase or otherwise acquire or to assure payment of,
indebtedness of others and (vi) indebtedness of others secured by any lien upon
property, whether or not assumed, but only to the extent of such property's fair
market value.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof
"Senior Agent" shall mean The Chase Manhattan Bank, N.A., as
Administrative Agent for the Lenders under the Senior Credit Agreement, and its
successors in such capacity, or if there is then no acting Administrative Agent
under the Senior Credit Agreement, financial institutions holding a majority in
principal amount of the Senior Debt outstanding thereunder.
XVI-1
"Senior Credit Agreement" shall mean the Credit Agreement, dated as
of December __, 1996, by and among the Borrower, MBW Holdings Inc., a Delaware
corporation, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent, as amended, restated, modified or supplemented from time to time
hereafter, together with any credit agreement or similar document from time to
time executed by the Borrower to evidence any Refinancing (as defined in the
definition of Senior Indebtedness) or successive Refinancings.
"Senior Indebtedness" shall mean (i) all Obligations (as defined in
the Senior Credit Agreement) (including Contingent Obligations, as defined in
the Senior Credit Agreement) now or hereafter incurred pursuant to and in
accordance with the terms of the Senior Debt Documents, (ii) any additional
Indebtedness incurred under or pursuant to the Senior Credit Agreement and the
other Senior Debt Documents whether such Obligations or additional Indebtedness
involve principal prepayment charges, interest (including, without limitation,
interest accruing after the filing of a petition initiating any proceeding under
the Bankruptcy Code, whether or not allowed as a claim in such proceeding)
indemnities or reimbursement of fees, expenses or other amounts, and (iii) any
indebtedness incurred for the purpose of refinancing, restructuring, extending
or renewing (collectively, "Refinancing") the obligations of the Borrower under
the Senior Credit Agreement as set forth in clauses (i) and (ii) above.
"Senior Debt Documents" shall mean the Senior Credit Agreement and
all other documents and instruments delivered or filed in connection with the
creation or incurrence of any Senior Indebtedness (including, without
limitation, the guaranty agreements executed and delivered by the subsidiaries
of the Borrower in respect of the Obligations under the Senior Credit
Agreement).
"Senior Lenders" shall mean the financial institutions party to the
Senior Credit Agreement as "Lenders" from time to time.
2. Payment of Interest. Interest shall accrue on the unpaid
principal amount of this Note from the date hereof at the rate of [ ]% per annum
[NOT TO EXCEED 12%] (the "Interest Rate"), calculated on the basis of a 365 day
year. The Borrower shall pay interest semi-annually in arrears on the fifteenth
day of January and July in each year (each, an "Interest Payment Date")
commencing on , [199_][200_].
3. Payment of Principal.
(a) Scheduled Payment. Subject to the provisions of Section 4
hereof, on [_____________], [199_][200_] (the "Maturity Date"), the Borrower
shall pay to the holder of this Note the entire principal amount of this Note,
plus all accrued and unpaid interest hereon which is then unpaid.
(b) Optional Prepayments. Subject to the provisions of Section 4
hereof, the Borrower may, at any time and from time to time, without premium or
penalty, prepay all or a portion of the unpaid principal amount of this Note,
together with unpaid interest accrued since
XVI-2
the preceding Interest Payment Date to which interest has been paid on such
portion of the principal amount which it is prepaying; provided, that no such
prepayment shall be made if such prepayment is then prohibited by the terms of
any Senior Indebtedness. A prepayment of less than all of the unpaid principal
amount of this Note shall not relieve the Borrower of its obligation to make the
scheduled payment on this Note on the Maturity Date. Each partial payment under
this Note shall first be credited to accrued and unpaid interest on the
principal being prepaid, and the remainder shall be credited to principal.
Whenever any payment to be made hereunder shall be due on a date which is not a
business day, the payment shall be made on the next succeeding business day and
such extension of time shall be included in the computation of interest with
respect to such payment
4. Subordination.
(a) Agreement to Subordinate. The Borrower and, by its acceptance
hereof, each Holder agree that the indebtedness of the Borrower evidenced by
this Note, whether for principal, interest on any other amount payable under or
in respect hereof and all rights or claims arising out of or associated with
such Indebtedness (the "Subordinated Obligations"), shall be junior and
subordinate in right of payment to the prior payment in full in cash of all
Senior Indebtedness, in accordance with the provisions of this Section 4. Each
holder of Senior Indebtedness shall be deemed to have acquired Senior
Indebtedness in reliance upon the agreements of the Borrower and the holder of
this Note contained in this Section 4. The provisions of this Section 4 shall be
reinstated if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior Indebtedness or
any representative of such holder upon the insolvency, bankruptcy or
reorganization of the Borrower. Any provision of this Note to the contrary
notwithstanding (other than the provision contained in Section 6), the Borrower
shall not make, and no Holder shall accept, any payment or prepayment of
principal, or prepayment of other amounts due thereunder, of any kind whatsoever
(including without limitation by distribution of assets, set off, exchange or
any other manner) with respect to the Subordinated Obligations at any time when
any of the Senior Indebtedness remains outstanding. Holder may receive interest
payments in respect of the Subordinated Obligations in accordance with the terms
of this Note except to the extent and at the times prohibited or restricted by
the provisions of this Section 4. In no event shall the Holder commence any
action or proceeding to contest the provisions of this Section 4 or the priority
of the Liens (as defined in the Senior Credit Agreement) granted to the holders
of the Senior Indebtedness by the Borrower. No Holder shall take, accept or
receive any collateral security from the Borrower for the payment of the
Subordinated Obligations.
(b) Liquidation, Dissolution, Bankruptcy. In the event of any
insolvency, bankruptcy, dissolution, winding up, liquidation, arrangement,
reorganization, marshalling of assets or liabilities, composition, assignment
for the benefit of creditors or other similar proceedings relating to the
Borrower, its debts, its property or its operations, whether voluntary or
involuntary, including, without limitation the filing of any petition or the
taking of any action to commence any of the foregoing (which, in the case of
action by a third party, is not dismissed within 60 days) (a "Bankruptcy
Event"), all Senior Indebtedness shall first be paid in full in cash or other
immediately available funds before Holder shall be entitled to receive or retain
any
XVI-3
payment or distribution of assets of the Borrower with respect to any
Subordinated Obligations. In the event of any such Bankruptcy Event, any payment
or distribution of assets to which Holder would be entitled if the Subordinated
Obligations were not subordinated to the Senior Indebtedness in accordance with
this Section 4, whether in cash, property, securities or otherwise, shall be
paid or delivered by the debtor, custodian, trustee or agent or other Person
making such payment or distribution, or by the Holder if received by it,
directly to the Senior Agent on behalf of the holders of the Senior Indebtedness
for application to the payment of the Senior Indebtedness remaining unpaid, to
the extent necessary to make payment in full in cash or other immediately
available funds of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to or for the holders of the Senior
Indebtedness.
(c) No Payments with Respect to Subordinated Obligations in Certain
Circumstances.
(i) In circumstances in which Section 4(b) is not applicable,
no payment of any nature (including, without limitation, any distribution of
assets) in respect of the Subordinated Obligations (including, without
limitation, pursuant to any judgment with respect thereto or on account of the
purchase or redemption or other acquisition of Subordinated Obligations, by set
off, prepayment exchange or other manner) shall be made by or on behalf of the
Borrower if, at the time of such payment:
(A) a default in the payment when due (whether at the
maturity thereof, or upon acceleration of maturity or otherwise and
without giving effect to any applicable grace periods) of all or any
portion of the Senior Indebtedness (whether of principal, interest
or any other amount with respect thereto) shall have occurred, and
such default shall not have been cured or waived in accordance with
the terms of the Senior Debt Documents; or
(B) subject to the last sentence of this Section 4(c),
(x) the Borrower shall have received notice from the Senior Agent of
the occurrence of one or more Events of Default (as defined in the
Senior Credit Agreement) in respect of the Senior Indebtedness
(other than payment defaults described in Section 4(c)(i)(A) above),
(y) each such Event of Default shall not have been cured or waived
in accordance with the terms of the Senior Debt Documents, and (z)
180 days shall not have elapsed since the date such notice was
received.
The Borrower may resume payments (and may make any payments missed
due to the application of Section 4(c)(i) in respect of the Subordinated
Obligations or any judgment with respect thereto:
(A) in the case of a default referred to in clause (A)
of this Section 4(c)(i), upon a cure or waiver thereof in accordance
with the terms of the Senior Debt Documents; or
XVI-4
(B) in the case of an Event of Default or Events of
Default referred to in clause (B) of this Section 4(c)(i), upon the
earlier to occur of (1) the cure or waiver of all such Events of
Default in accordance with the terms of the Senior Debt Documents,
or (2) the expiration of such period of 180 days.
(ii) Following any acceleration of the maturity of any Senior
Indebtedness and as long as such acceleration shall continue unrescinded
and unannulled, such Senior Indebtedness shall first be paid in full in
cash, or provision for such payment shall be made in a manner satisfactory
to the holders of the Senior Indebtedness, before any payment is made on
account of or applied on the Subordinated Obligations.
(iii) The Borrower shall give prompt written notice to the Holder of
(i) any default in respect of Senior Obligations referred to in Section
4(c)(i)(A) and (ii) any notice of the type described in Section 4(c)(i)(B)
from the Senior Agent.
(d) When Distribution Must Be Paid Over. In the event that Holder
shall receive any payment or distribution of assets that Holder is not entitled
to receive or retain under the provisions of this Note, Holder shall hold any
amount so received in trust for the holders of Senior Indebtedness, shall
segregate such assets from other assets held by Holder and shall forthwith turn
over such payment or distribution (without liability for interest thereon) to
the Senior Agent on behalf of the holders of Senior Indebtedness in the form
received (with any necessary endorsement) to be applied to Senior Indebtedness.
(e) Exercise of Remedies. So long as any Senior Indebtedness is
outstanding (including any loans, any letters of credit, any commitments to lend
or any lender guarantees), Holder (solely in its capacity as a holder of this
Note) shall not exercise any rights or remedies with respect to an Event of
Default under this Note, including, without limitation, any action (l) to demand
or xxx for collection of amounts payable hereunder, (2) to accelerate the
principal of this Note, or (3) to commence or join with any other creditor
(other than the holder of a majority in principal amount of the Senior
Indebtedness) in commencing any proceeding in connection with or premised on the
occurrence of a Bankruptcy Event prior to the earlier of:
(A) the payment in full in cash or other immediately
available funds of all Senior Indebtedness;
(B) the initiation of a proceeding (other than a
proceeding prohibited by clause (3) of this Section 4(e)) in
connection with or premised upon the occurrence of a Bankruptcy
Event;
(C) the expiration of 180 days immediately following the
receipt by the Senior Agent of notice of the occurrence of such
Event of Default from the Holder; and
(D) the acceleration of the maturity of the Senior
Indebtedness;
XVI-5
provided, however, that if, with respect to (B) and (D) above, such proceeding
or acceleration, respectively, is rescinded, or with respect to (C) above,
during such 180-day period such Event of Default has been cured or waived, the
prohibition against taking the actions described in this section 4(e) shall
automatically be reinstated as of the date of the rescission, cure or waiver, as
applicable. In all events, unless an event described in clause (A), (B) or (D)
above has occurred and not been rescinded, the Holder shall give thirty (30)
days prior written notice to the Senior Agent before taking any action described
in this Section 4(e), which notice shall describe with specificity the action
that the Holder in good faith intends to take.
(f) Acceleration of Payment of Note. If this Note is declared due
and payable prior to the Maturity Date, no direct or indirect payment that is
due solely by reason of such declaration shall be made, nor shall application be
made of any distribution of assets of the Borrower (whether by set off or in any
other manner, including, without limitation, from or by way of collateral) to
the payment, purchase or other acquisition or retirement of this Note, unless,
in either case, (i) all amounts due or to become due on or in respect of the
Senior Indebtedness (including with respect to any outstanding letters of
credit) shall have been previously paid in full in cash or other immediately
available funds or in any other manner satisfactory to all holders of such
Senior Indebtedness, (ii) all commitments to lend under Senior Indebtedness
shall have been terminated, (iii) all guarantees constituting Senior
Indebtedness shall have been terminated and (iv) all lender guarantees
constituting Senior Indebtedness shall have been permanently reduced to zero.
(g) Proceedings Against Borrower. So long as any Senior Indebtedness
is outstanding (including any loans, any commitments to lend or open lender
guarantees or any lender guarantees, Holder (solely in its capacity as a holder
of this Note) shall not commence any bankruptcy, insolvency, reorganization or
other similar proceeding against Borrower.
(h) Amending Senior Indebtedness. Any holder of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to
Holder (i) modify or amend the terms of the Senior Indebtedness provided that
such Senior Indebtedness cannot be extended or renewed past December __, 2001,
(ii) sell, exchange, release, fail to perfect a lien on or a security interest
in or otherwise in any manner deal with or apply any property pledged or
mortgaged to secure, or otherwise securing, Senior Indebtedness, (iii) release
any guarantor or any other person liable in any manner for the Senior
Indebtedness, (iv) exercise or refrain from exercising any rights against
Borrower or any other person, (v) apply any sums by whomever paid or however
realized to Senior Indebtedness or (vi) take any other action that might be
deemed to impair in any way the rights of the holder of this Note. Any and all
of such actions may be taken by the holders of Senior Indebtedness without
incurring responsibility to Holder and without impairing or releasing the
obligations of Holder to the holders of Senior Indebtedness.
(i) Certain Rights in Bankruptcy. Holder hereby irrevocably
authorizes and empowers each holder of Senior Indebtedness (and its
representative or representatives) to demand, xxx for, collect and receive all
payments and distributions under the terms of this Note, to file and prove all
claims (including claims in bankruptcy) relating to this Note, to exercise any
XVI-6
right to vote arising with respect to this Note and any claims hereunder in any
bankruptcy, insolvency or similar proceeding and take any and all other actions
in the name of Holder (solely in its capacity as a holder of this Note), as such
holder of Senior Indebtedness determines to be necessary or appropriate.
(j) Subrogation. No payment or distribution to any holder of Senior
Indebtedness pursuant to the provisions of this Note shall entitle Holder to
exercise any right of subrogation in respect thereof until (i)(w) all Senior
Indebtedness shall have been paid in full in cash or other immediately available
funds or in any other manner satisfactory to all holders of Senior Indebtedness,
(x) all commitments to lend under Senior Indebtedness shall have been
terminated, (y) all guarantees constituting Senior Indebtedness shall have been
terminated and (z) all lender guarantees constituting Senior Indebtedness shall
have been permanently reduced to zero or (ii) all holders of Senior Indebtedness
have consented in writing to the taking of such action.
(k) Relative Rights. The provisions of this Section 4 are for the
benefit of the holders of Senior Indebtedness (and their successors and assigns)
and shall be enforceable by them directly against Holder. Holder acknowledges
and agrees that any breach of the provisions of this Section 4 will cause
irreparable harm for which the payment of monetary damages may be inadequate.
For this reason, Holder agrees that, in addition to any remedies at law or
equity to which a holder of the Senior Indebtedness may be entitled, a holder of
the Senior Indebtedness will be entitled to an injunction or other equitable
relief to prevent breaches of the provisions of this Section 4 and/or to compel
specific performance of such provisions. The provisions of this Section 4 shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of Senior Indebtedness is rescinded or must otherwise be returned by
any holder of Senior Indebtedness upon the occurrence of a Bankruptcy Event or
otherwise, all as though such payment had not been made. The provisions of this
Section 4 are not intended to impair and shall not impair as between Borrower
and Holder, the obligation of Borrower, which is absolute and unconditional, to
pay Holder all amounts owing under this Note.
(l) Reliance on Orders and Decrees. Subject to the provisions of
Section 4(d) hereof, upon any payment or distribution of assets of Borrower,
whether in cash, property, securities or otherwise, Holder shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which any insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to Holder for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 4.
XVI-7
5. Events of Default.
(a) Definition. The following shall be an "Event of Default" under
this Note;
(i) the Borrower shall fail to make any payment of interest on
this Note when the same shall become due and payable and such failure
shall continue for a period of 5 days;
(ii) the Borrower shall fail to make any payment of the
principal of this Note when the same shall become due and payable, whether
on the Maturity Date or otherwise;
(iii) (A) the Borrower shall commence any case, proceeding or
action (x) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to its debts, or (y)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, (B) the
Borrower shall make a general assignment for the benefit of its creditors,
(C) there shall be commenced against the Borrower any case, proceeding or
other action of a nature referred to in clause (A) above which shall not
have been vacated or discharged within 60 days from the commencement
thereof, or (iv) a court shall enter a decree or order for relief in any
involuntary case under Title 11 of the United States Code, as amended from
time to time, or any applicable bankruptcy or similar law now or hereafter
in effect, which decree or order is not stayed, vacated, discharged, or
bonded pending appeal within 60 days from the entry thereof; or
(iv) the acceleration of the maturity of the Senior
Indebtedness.
(b) Remedies. If an Event of Default shall occur and be continuing,
then, subject to the provisions of Section 4, the Holder may, upon written
notice to the Borrower, declare all amounts owing under this Note to be
immediately due and payable.
Subject to the immediately preceding paragraph and to Section 4
above, the Holder shall also have all other rights in respect of this Note
following the occurrence and during the continuance of an Event of Default which
are available pursuant to applicable law or in equity.
[6. Right of Set-Off. Anything in this Note to the contrary
notwithstanding, nothing in this Note shall preclude the Borrower from timely
exercising such Borrower's right pursuant to Section ______ of the Purchase
Agreement to set-off indemnification claims against this Note and/or interest
payments under this Note.]
7. No Presentment. The Borrower, for itself and any guarantors
hereof, and their successors and assigns, waives presentment, demand, protest
and notice thereof or of
XVI-8
dishonor, and waives any right to be released by reason of any extension of time
or change in the terms of payment.
8. Amendment. So long as any Senior Indebtedness is outstanding
(including any commitment under the Senior Agent Documents) the terms of this
Note may be amended only with the consent of the Senior Agent. Subject to the
foregoing, without the consent of the Senior Agent hereof, this Note may be
amended by the Borrower and the Holder to cure any ambiguity, defect or
inconsistency that does not affect the subordination provisions hereof or the
rights of the Senior Lenders.
9. Cancellation. After all unpaid principal and interest owed on
this Note has been paid in full, this Note shall be surrendered to the Borrower
for cancellation and shall not be reissued.
10. Transfer Restrictions: Acknowledgment of Security Interest. This
Note shall not be transferrable by the Holder hereof without the prior written
consent of the Borrower (which consent shall not be unreasonably withheld). The
Holder hereby acknowledges, and agrees to, the Borrower's grant of its interest
herein to the Lenders under the Credit Agreement, dated as of the date hereof,
to collaterally secure the Borrower's obligations under such Credit Agreement.
11. Payment of Expenses. The Borrower agrees to pay all costs and
expenses (including reasonable attorneys' fees) reasonably incurred by the
Holder after the occurrence and during the continuance of an Event of Default in
enforcing any obligations under this Note or in collecting any payments due from
Borrower under this Note (including in connection with a bankruptcy or
insolvency proceeding with respect to the Borrower).
12. Governing Law. The construction, validity and interpretation of
this Note shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
13. Descriptive Headings. The descriptive headings of this Note are
inserted for convenience only, and do not constitute a part of this Note.
XVI-9
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Note on the date first written above.
MBW FOODS INC.
By:_____________________________________
Name:
Title:
Agreed:
[NAME OF SELLER]
By: ____________________________
Name:
Title:
XVI-10
EXHIBIT XVII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement dated as of
December __, 1996 (said Credit Agreement, as amended, restated, supplemented or
otherwise modified to the date hereof, being the "Credit Agreement"), by and
among MBW Foods Inc., a Delaware corporation, MBW Holdings Inc., a Delaware
corporation, the financial institutions listed therein as Lenders ("Lenders"),
The Chase Manhattan Bank, as Administrative Agent, and Chase Securities Inc., as
Arranging Agent. Pursuant to subsection 2.7B(iii) of the Credit Agreement, the
undersigned hereby certifies that it is not a "bank" or other Person described
in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By: ________________________________
Name:
Title:
XVII-1
EXHIBIT XVIII
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "Agreement") is dated as of
December __, 1996 and entered into by and between MBW FOODS INC., a Delaware
corporation ("Pledgor"), and THE CHASE MANHATTAN BANK, as administrative agent
for and representative of (in such capacity herein called "Secured Party") the
financial institutions ("Lenders") party to the Credit Agreement referred to
below.
PRELIMINARY STATEMENTS
A. Pursuant to that certain Credit Agreement dated as of December __, 1996
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Pledgor, MBW Holdings Inc., a Delaware corporation,
Secured Party, as Administrative Agent, and Chase Securities Inc., as Arranging
Agent, Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.
B. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Pledgor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and issue Letters of Credit under the Credit Agreement and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Pledgor hereby agrees with Secured Party as follows:
SECTION 1. Certain Definitions.
The following terms used in this Agreement shall have the following
meanings:
"Collateral" means (i) the Collateral Account, (ii) all amounts on
deposit from time to time in the Collateral Account, (iii) all interest,
cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Collateral, and (iv) to the extent not covered by
clauses (i) through (iii) above, all proceeds of any or all of the
foregoing Collateral.
XVIII-1
"Collateral Account" means the restricted deposit account
established and maintained by Secured Party pursuant to subsection 2(a).
"Secured Obligations" means all obligations and liabilities of every
nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Pledgor, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or
not jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred, and
all or any portion of such obligations or liabilities that are paid, to
the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of
Pledgor now or hereafter existing under this Agreement.
SECTION 2. Establishment and Operation of Collateral Account.
(a) Secured Party is hereby authorized to establish and maintain at its
office at _____________________________________________, as a blocked account in
the name of Secured Party and under the sole dominion and control of Secured
Party, a restricted deposit account designated as "MBW Foods Inc. Collateral
Account".
(b) The Collateral Account shall be operated in accordance with the terms
of this Agreement.
(c) All amounts at any time held in the Collateral Account shall be
beneficially owned by Pledgor but shall be held in the name of Secured Party
hereunder, for the benefit of Lenders, as collateral security for the Secured
Obligations upon the terms and conditions set forth herein. Pledgor shall have
no right to withdraw, transfer or, except as expressly set forth herein,
otherwise receive any funds deposited into the Collateral Account.
(d) Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.
SECTION 3. Deposits of Cash Collateral.
(a) All deposits of funds in the Collateral Account shall be made by wire
transfer (or, if applicable, by intra-bank transfer from another account of
Pledgor) of immediately available funds, in each case addressed as follows:
XVIII-2
Account No.:
ABA No.:
Reference:
Attention:
Pledgor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit.
(b) If an Event of Default has occurred and is continuing and, in
accordance with Section 8 of the Credit Agreement, Pledgor is required to pay to
Secured Party an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding under the Credit Agreement,
Pledgor shall deliver funds in such an amount for deposit in the Collateral
Account in accordance with Section 3(a). Upon any drawing under any outstanding
Letter of Credit in respect of which Pledgor has deposited in the Collateral
Account any amounts described above, Secured Party shall apply such amounts to
reimburse the Issuing Lender for the amount of such drawing. In the event the
amount deposited in the Collateral Account pursuant to this Section 3(b) exceeds
the maximum amount available to be drawn under all Letters of Credit, Secured
Party shall apply such excess amount then on deposit in the Collateral Account
in accordance with subsection 2.4D of the Credit Agreement.
(c) Pledgor shall, promptly after initiating a transfer of funds to the
Collateral Account, give notice to Secured Party by telefacsimile of the date,
amount and method of delivery of such deposit.
SECTION 4. Pledge of Security for Secured Obligations.
Pledgor hereby pledges and assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of Pledgor's right, title and interest
in and to the Collateral as collateral security for the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all
Secured Obligations.
SECTION 5. No Investment of Amounts in the Collateral Account; Interest on
Amounts in the Collateral Account.
(a) Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit in
the Collateral Account pending application thereof as elsewhere provided in this
Agreement.
(b) To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account shall
bear interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms.
XVIII-3
(c) Subject to Secured Party's rights under Section 12, any interest
earned on deposits of cash in the Collateral Account in accordance with
subsection 5(b) shall be deposited directly in, and held in the Collateral
Account.
SECTION 6. Representations and Warranties.
Pledgor represents and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time of transfer
thereof to Secured Party will be) the legal and beneficial owner of the
Collateral from time to time transferred by Pledgor to Secured Party, free
and clear of any Lien except for the security interest created by this
Agreement.
(b) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by Pledgor of the
security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the perfection of or
the exercise by Secured Party of its rights and remedies hereunder (except
as may have been taken by or at the direction of Pledgor).
(c) Perfection. The pledge and assignment of the Collateral pursuant
to this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Secured
Obligations.
(d) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Collateral is accurate and complete in all respects.
SECTION 7. Further Assurances.
Pledgor agrees that from time to time, at the expense of Pledgor, Pledgor
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor will: (a) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby and (b) at Secured Party's request,
appear in and defend any action or proceeding that may affect Pledgor's
beneficial title to or Secured Party's security interest in all or any part of
the Collateral.
XVIII-4
SECTION 8. Transfers and other Liens.
Pledgor agrees that it will not (a) sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral or (b) create or suffer
to exist any Lien upon or with respect to any of the Collateral, except for the
security interest under this Agreement.
SECTION 9. Secured Party Appointed Attorney-in-Fact.
Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation to file one or more financing or
continuation statements, or amendments thereto, relative to all or any part of
the Collateral without the signature of Pledgor.
SECTION 10. Secured Party May Perform.
If Pledgor fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Pledgor under
subsection 10.2 of the Credit Agreement.
SECTION 11. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral, it being
understood that Secured Party shall have no responsibility for (a) taking any
necessary steps (other than steps taken in accordance with the standard of care
set forth above to maintain possession of the Collateral) to preserve rights
against any parties with respect to any Collateral or (b) taking any necessary
steps to collect or realize upon the Secured Obligations or any guarantee
therefor, or any part thereof, or any of the Collateral. Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property of like
kind.
XVIII-5
SECTION 12. Remedies.
(a) If any Event of Default or Potential Event of Default shall have
occurred and be continuing, Secured Party may (i) transfer any or all of the
Collateral to an account established in Secured Party's name (whether at Secured
Party or otherwise) or (ii) otherwise register title to any Collateral in the
name of Secured Party or one of its nominees or agents, without reference to any
interest of Pledgor.
(b) If any Event of Default shall have occurred and be continuing, subject
to the provisions of subsection 3(b), Secured Party may exercise in respect of
the Collateral, in addition to all other rights and remedies otherwise available
to it, all the rights and remedies of a secured party on default under the
Uniform Commercial Code as in effect in any relevant jurisdiction (the "Code")
(whether or not the Code applies to the affected Collateral).
(c) If the proceeds of any disposition of the Collateral are insufficient
to pay all the Secured Obligations, Pledgor shall be liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
(d) Anything contained herein to the contrary notwithstanding, any of the
Collateral consisting of cash held by Secured Party in the Collateral Account
shall be subject to Secured Party's rights of set-off under subsection 10.4 of
the Credit Agreement.
SECTION 13. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination Secured Party shall, at Pledgor's
expense, execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination and Pledgor shall be entitled to
the return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Collateral as shall not have been
otherwise applied pursuant to the terms hereof.
XVIII-6
SECTION 14. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder by
Lenders. Secured Party shall be obligated, and shall have the right hereunder,
to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including without
limitation the release or substitution of Collateral), solely in accordance with
this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums held by Secured Party hereunder (which
shall be deposited in a new Collateral Account established and maintained by
such successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Secured Party under this Agreement, and (ii) execute and deliver to
such successor Secured Party such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 15. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Pledgor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Pledgor. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
XVIII-7
SECTION 16. Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex (with
received answerback), or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided that notices
to Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 20. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST
XVIII-8
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms used in Articles 8
and 9 of the Uniform Commercial Code in the State of New York are used herein as
therein defined.
SECTION 21. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
XVIII-9
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MBW FOODS INC.
By: __________________________
Name:
Title:
XVIII-10
THE CHASE MANHATTAN BANK,
as Secured Party
By: __________________________
Name: Xxxxx Xxxxx
Title: Vice President
XVIII-11
EXHIBIT XIX
[FORM OF COLLATERAL ACCESS AGREEMENT]
COLLATERAL ACCESS AGREEMENT
RECORDING REQUESTED BY:
O'Melveny & Xxxxx LLP
AND WHEN RECORDED MAIL TO:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Yongjin Im
Re: MBW FOODS INC.
--------------------------------------------------------------------------------
Space above this line for recorder's use only
REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT
This REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT (this
"Agreement") is dated as of ___________, [199__][200_] and entered into by
_________________________, a ____________________ ("Real Property Holder"), to
and for the benefit of THE CHASE MANHATTAN BANK, having offices at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as administrative agent (in such capacity,
"Administrative Agent") for the financial institutions ("Lenders") which are or
may hereafter become parties to the Credit Agreement (as hereinafter defined).
R E C I T A L S
C. [MBW Foods Inc.][Name of Subsidiary], a [_________] corporation
("Company"), has possession of and occupies all or a portion of the property
described on Exhibit A annexed hereto (the "Premises").
D. Company's interest in the Premises [arises under the lease
agreement (the "Lease")][is subject to the [mortgage][deed of trust] (the
"Mortgage")] more particularly described on Exhibit B annexed hereto, pursuant
to which Real Property Holder has rights, upon the terms and conditions set
forth therein, to take possession of, and otherwise assert control over, the
Premises.
XIX-1
E. Administrative Agent, Lenders, and Chase Securities Inc., as
Arranging Agent, have entered into that certain Credit Agreement dated as of
December __, 1996 (said Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time, being the "Credit Agreement") with
[Company] [MBW Foods Inc., a Delaware corporation of which Company is a
subsidiary ("Borrower")] and MBW Holdings Inc., a Delaware corporation, and
Company has executed [a guaranty,] a security agreement and other collateral
documents in relation to the Credit Agreement.
F. [Company's guaranty of] the extensions of credit made by Lenders
to [Company] [Borrower] under the Credit Agreement will be secured, in part, by
all raw materials, work-in-process and finished goods inventory of Company
(including all inventory of Company now or hereafter located on the Premises
(the "Inventory")) and all equipment, machinery and other goods used in
Company's business (including all equipment of Company now or hereafter located
on the Premises (the "Equipment" and, together with the Inventory, the
"Collateral")).
G. Administrative Agent has requested that Real Property Holder
execute this Agreement as a condition to the extension of credit to [Company]
[Borrower] under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Real Property Holder hereby represents and warrants to, and
covenants and agrees with, Administrative Agent as follows:
1. Real Property Holder hereby (a) waives and releases unto
Administrative Agent and its successors and assigns any and all rights granted
by or under any present or future laws to levy or distraint for rent or any
other charges which may be due to Real Property Holder against the Collateral,
and any and all other claims, liens and demands of every kind which it now has
or may hereafter have against the Collateral, and (b) agrees that any rights it
may have in or to the Collateral, no matter how arising (to the extent not
effectively waived pursuant to clause (a) of this paragraph 1), shall be second
and subordinate to the rights of Administrative Agent in respect thereof. Real
Property Holder acknowledges that the Collateral is and will remain personal
property and not fixtures even though it may be affixed to or placed on the
Premises.
2. Real Property Holder certifies that (a) Real Property Holder is
the [landlord under the Lease][beneficiary under the Mortgage], (b) the
[Lease][Mortgage] is in full force and effect and has not been amended,
modified, or supplemented except as set forth on Exhibit B annexed hereto, (c)
there is no defense, offset, claim or counterclaim by or in favor of Real
Property Holder against Company under the [Lease][Mortgage] or against the
obligations of Real Property Holder under the [Lease][Mortgage], (d) no notice
of default has been given under or in connection with the [Lease][Mortgage]
which has not been cured, and Real Property Holder has no knowledge of the
occurrence of any other default under or in connection with the
[Lease][Mortgage], and (e) except as disclosed to Administrative Agent, no
portion of the
XIX-2
Premises is encumbered in any way by any deed of trust or mortgage lien or
ground or superior lease.
3. Real Property Holder consents to the installation or placement of
the Collateral on the Premises, and Real Property Holder grants to
Administrative Agent a license to enter upon and into the Premises to do any or
all of the following with respect to the Collateral: assemble, have appraised,
display, remove, maintain, prepare for sale or lease, repair, transfer, or sell
(at public or private sale). In entering upon or into the Premises,
Administrative Agent hereby agrees to indemnify, defend and hold Real Property
Holder harmless from and against any and all claims, judgments, liabilities,
costs and expenses incurred by Real Property Holder caused solely by
Administrative Agent's entering upon or into the Premises and taking any of the
foregoing actions with respect to the Collateral. Such costs shall include any
damage to the Premises made by Administrative Agent in severing and/or removing
the Collateral therefrom.
4. Real Property Holder agrees that it will not prevent
Administrative Agent or its designee from entering upon the Premises at all
reasonable times to inspect or remove the Collateral. In the event that Real
Property Holder has the right to, and desires to, obtain possession of the
Premises [(either through expiration of the Lease or termination thereof due to
the default of Company thereunder)] [(through the exercise of its rights under
the Mortgage upon a default by Company thereunder)], Real Property Holder will
deliver notice (the "Real Property Holder's Notice") to Administrative Agent to
that effect. Within the 45 day period after Administrative Agent receives the
Real Property Holder's Notice, Administrative Agent shall have the right, but
not the obligation, to cause the Collateral to be removed from the Premises.
During such 45 day period, Real Property Holder will not remove the Collateral
from the Premises nor interfere with Administrative Agent's actions in removing
the Collateral from the Premises or Administrative Agent's actions in otherwise
enforcing its security interest in the Collateral. Notwithstanding anything to
the contrary in this paragraph, Administrative Agent shall at no time have any
obligation to remove the Collateral from the Premises.
5. Real Property Holder shall send to Administrative Agent a copy of
any notice of default under the [Lease][Mortgage] sent by Real Property Holder
to Company. In addition, Real Property Holder shall send to Administrative Agent
a copy of any notice received by Real Property Holder of a breach or default
under any other lease, mortgage, deed of trust, security agreement or other
instrument to which Real Property Holder is a party which may affect Company's
rights in, or possession of, the Premises.
6. All notices to Administrative Agent under this Agreement shall be
in writing and sent to Administrative Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.
7. The provisions of this Agreement shall continue in effect until
Real Property Holder shall have received Administrative Agent's written
certification that all amounts advanced under the Credit Agreement have been
paid in full.
XIX-3
8. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles.
XIX-4
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the day and year first set forth above.
[NAME OF REAL PROPERTY HOLDER]
By: ________________________________
Name:
Title:
By its acceptance hereof, as of the day and year first set forth
above, Administrative Agent agrees to be bound by the provisions hereof.
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: ________________________________
Name: Xxxxx Xxxxx
Title: Vice President
XIX-5
EXHIBIT A TO COLLATERAL ACCESS AGREEMENT
----------------------------------------
LEGAL DESCRIPTION OF PREMISES
XIX-A-1
EXHIBIT B TO COLLATERAL ACCESS AGREEMENT
----------------------------------------
DESCRIPTION OF [LEASE] [MORTGAGE]]
XIX-B-1
