Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 120 663K
Business-Combination Transaction
2: EX-2.1 Agreement of Sale and Plan of Merger 90 281K
3: EX-2.2 1st Amendment to Agreement of Sale 5 27K
4: EX-3.1 Cert. of Incorp. - American Home Foods Products 8 41K
13: EX-3.10 Bylaws of Canadian Home Products 14 64K
14: EX-3.11 Ceri. of Incorp. - Heritage Brands Holdings 4 22K
15: EX-3.12 Bylaws of Heritage Brands Holdings 13 57K
16: EX-3.13 Certificate of Incorporation - Heritage Brands 2 17K
17: EX-3.14 Bylaws of Heritage Brands 13 57K
18: EX-3.15 Certificate of Incorporation of Campfire 2 17K
19: EX-3.16 Bylaws of Campfire, Inc. 13 57K
5: EX-3.2 Bylaws of American Home Foods Products, Inc. 9 42K
6: EX-3.3 Certificate of Incorporation - American Home Foods 9 41K
7: EX-3.4 Bylaws of American Home Foods 7 37K
8: EX-3.5 Certificate of Incorporation - Luck's, Inc. 7 33K
9: EX-3.6 Bylaws of Luck's, Inc. 7 36K
10: EX-3.7 Certificate of Incorporation - M. Polaner, Inc. 6 32K
11: EX-3.8 Bylaws of M. Polaner, Inc. 7 41K
12: EX-3.9 Certificate of Continuance 13 45K
20: EX-4.1 Registration Rights Agreement 17 82K
21: EX-4.2 Indenture Dated as of November 1, 1996 125 413K
22: EX-10.1 Transisitional Services Agreement 9 35K
27: EX-10.10 Monitoring and Oversight Agreement 7 30K
23: EX-10.2 Financial Advisory Agreement 5 26K
24: EX-10.3 International Home Foods, Inc. Stock Option Plan 16 74K
25: EX-10.8 Indemnification Agreement 11 45K
26: EX-10.9 Credit Agreement 242 879K
28: EX-12.1 Computation of Ratio of Earnings to Fixed Charges 1 13K
29: EX-12.2 Pro Forma Ratio of Earnings to Fixed Charges 1 13K
30: EX-16.1 Letter Re: Change to Certifying Acountants 1 12K
31: EX-21.1 List of Subsidiaries 1 12K
32: EX-23.1 Consent of Arthur Andersen LLP 1 12K
33: EX-25.1 Form T-1 5 25K
34: EX-27.1 Financial Data Schedule 1 15K
| Page | (sequential) | | | | (alphabetic) | Top |
|---|
| | |
- Alternative Formats (Word, et al.)
- Consolidated EBITDA
- Credit Agreement
- Eurodollar Base Rate
- Revolving Credit Note
- Section 10. Miscellaneous
- Section 1. Defined Terms
- Section 1. Definitions
- Section 2. Amount and Terms of Commitments
- Section 2. Guarantee
- Section 3. Grant of Security Interest
- Section 3. Letters of Credit
- Section 4. Representations and Warranties
- Section 5. Conditions Precedent
- Section 5. Covenants
- Section 6. Affirmative Covenants
- Section 6. Remedial Provisions
- Section 7. Negative Covenants
- Section 7. the Administrative Agent
- Section 8. Events of Default
- Section 8. Miscellaneous
- Section 9. the Agents
- Swing Line Note
- Table of contents
- 10.10 Integration
- 10.11 Governing Law
- 10.12 Submission To Jurisdiction; Waivers
- 10.13 Acknowledgements
- 10.14 Waivers of Jury Trial
- 10.15 Confidentiality
- 10.1 Amendments and Waivers
- 10.2 Notices
- 10.3 No Waiver; Cumulative Remedies
- 10.4 Survival of Representations and Warranties
- 10.5 Payment of Expenses and Taxes
- 10.6 Successors and Assigns; Participations and Assignments
- 10.7 Adjustments; Set-off
- 10.8 Counterparts
- 10.9 Severability
- 1.1 Defined Terms
- 1.1 Definitions
- 1.2 Other Definitional Provisions
- 2.10 Optional Prepayments
- 2.11 Mandatory Prepayments and Commitment Reductions
- 2.12 Conversion and Continuation Options
- 2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches
- 2.14 Interest Rates and Payment Dates
- 2.15 Computation of Interest and Fees
- 2.16 Inability to Determine Interest Rate
- 2.17 Pro Rata Treatment and Payments
- 2.18 Requirements of Law
- 2.19 Taxes
- 2.1 Guarantee
- 2.1 Term Loan Commitments
- 2.20 Indemnity
- 2.21 Change of Lending Office
- 2.22 Replacement of Lenders under Certain Circumstances
- 2.2 Procedure for Term Loan Borrowing
- 2.2 Right of Contribution
- 2.3 No Subrogation
- 2.3 Repayment of Term Loans
- 2.4 Amendments, etc. with respect to the Borrower Obligations
- 2.4 Revolving Credit Commitments
- 2.5 Guarantee Absolute and Unconditional
- 2.5 Procedure for Revolving Credit Borrowing
- 2.6 Reinstatement
- 2.6 Swing Line Commitment
- 2.7 Payments
- 2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans
- 2.8 Commitment Fees, etc
- 2.9 Termination or Reduction of Revolving Credit Commitments
- 3.1 L/C Commitment
- 3.2 Procedure for Issuance of Letter of Credit
- 3.3 Commissions, Fees and Other Charges
- 3.4 L/C Participations
- 3.5 Reimbursement Obligation of the Borrower
- 3.6 Obligations Absolute
- 3.7 Letter of Credit Payments
- 3.8 Applications
- 4.10 Taxes
- 4.11 Federal Regulations
- 4.12 Labor Matters
- 4.13 Erisa
- 4.14 Investment Company Act; Other Regulations
- 4.15 Subsidiaries
- 4.16 Use of Proceeds
- 4.17 Environmental Matters
- 4.18 Accuracy of Information, etc
- 4.19 Security Documents
- 4.1 Financial Condition
- 4.1 Representations in Credit Agreement
- 4.20 Solvency
- 4.21 Senior Indebtedness
- 4.22 Regulation H
- 4.2 No Change
- 4.2 Title; No Other Liens
- 4.3 Corporate Existence; Compliance with Law
- 4.3 Perfected First Priority Liens
- 4.4 Chief Executive Office
- 4.4 Corporate Power; Authorization; Enforceable Obligations
- 4.5 Inventory and Equipment
- 4.5 No Legal Bar
- 4.6 Farm Products
- 4.6 No Material Litigation
- 4.7 No Default
- 4.7 Pledged Securities
- 4.8 Ownership of Property; Liens
- 4.8 Receivables
- 4.9 Intellectual Property
- 5.1 Conditions to Initial Extension of Credit
- 5.1 Covenants in Credit Agreement
- 5.2 Conditions to Each Extension of Credit
- 5.2 Delivery of Instruments and Chattel Paper
- 5.3 Insurance
- 5.4 Maintenance of Perfected Security Interest; Further Documentation
- 5.5 Changes in Locations, Name, etc
- 5.6 Notices
- 5.7 Pledged Securities
- 5.8 Receivables
- 5.9 Intellectual Property
- 6.10 Additional Collateral, etc
- 6.1 Certain Matters Relating to Receivables
- 6.1 Financial Statements
- 6.2 Certificates; Other Information
- 6.2 Communications with Obligors; Grantors Remain Liable
- 6.3 Payment of Obligations
- 6.3 Pledged Stock
- 6.4 Conduct of Business and Maintenance of Existence, etc
- 6.4 Proceeds to be Turned Over To Administrative Agent
- 6.5 Application of Proceeds
- 6.5 Maintenance of Property; Insurance
- 6.6 Code and Other Remedies
- 6.6 Inspection of Property; Books and Records; Discussions
- 6.7 Notices
- 6.7 Registration Rights
- 6.8 Environmental Laws
- 6.8 Waiver; Deficiency
- 6.9 Interest Rate Protection
- 7.10 Limitation on Transactions with Affiliates
- 7.11 Limitation on Sales and Leasebacks
- 7.12 Limitation on Changes in Fiscal Periods
- 7.13 Limitation on Negative Pledge Clauses
- 7.14 Limitation on Lines of Business
- 7.15 Limitation on Amendments to Acquisition Documents
- 7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc
- 7.1 Financial Condition Covenants
- 7.2 Duty of Administrative Agent
- 7.2 Limitation on Indebtedness
- 7.3 Execution of Financing Statements
- 7.3 Limitation on Liens
- 7.4 Authority of Administrative Agent
- 7.4 Limitation on Fundamental Changes
- 7.5 Limitation on Sale of Assets
- 7.6 Limitation on Dividends
- 7.7 Limitation on Capital Expenditures
- 7.8 Limitation on Investments, Loans and Advances
- 7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc
- 8.10 Governing Law
- 8.11 Submission To Jurisdiction; Waivers
- 8.12 Acknowledgements
- 8.13 Waivers of Jury Trial
- 8.14 Section Headings
- 8.15 Additional Grantors
- 8.16 Releases
- 8.1 Amendments in Writing
- 8.2 Notices
- 8.3 No Waiver by Course of Conduct; Cumulative Remedies
- 8.4 Enforcement Expenses; Indemnification
- 8.5 Successors and Assigns
- 8.6 Set-Off
- 8.7 Counterparts
- 8.8 Severability
- 8.9 Integration
- 9.10 Authorization to Release Liens
- 9.11 Documentation Agent and Syndication Agent
- 9.1 Appointment
- 9.2 Delegation of Duties
- 9.3 Exculpatory Provisions
- 9.4 Reliance by Administrative Agent
- 9.5 Notice of Default
- 9.6 Non-Reliance on Agents and Other Lenders
- 9.7 Indemnification
- 9.8 Agent in Its Individual Capacity
- 9.9 Successor Administrative Agent
|
| 1 | 1st Page - Filing Submission
|
| " | Credit Agreement
|
| 2 | Table of contents
|
| 6 | Section 1. Definitions
|
| " | 1.1 Defined Terms
|
| 14 | Eurodollar Base Rate
|
| 29 | 1.2 Other Definitional Provisions
|
| " | Section 2. Amount and Terms of Commitments
|
| " | 2.1 Term Loan Commitments
|
| " | 2.2 Procedure for Term Loan Borrowing
|
| 30 | 2.3 Repayment of Term Loans
|
| 31 | 2.4 Revolving Credit Commitments
|
| 32 | 2.5 Procedure for Revolving Credit Borrowing
|
| " | 2.6 Swing Line Commitment
|
| 33 | 2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans
|
| 34 | 2.8 Commitment Fees, etc
|
| " | 2.9 Termination or Reduction of Revolving Credit Commitments
|
| 35 | 2.10 Optional Prepayments
|
| " | 2.11 Mandatory Prepayments and Commitment Reductions
|
| 36 | 2.12 Conversion and Continuation Options
|
| " | 2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches
|
| 37 | 2.14 Interest Rates and Payment Dates
|
| " | 2.15 Computation of Interest and Fees
|
| 38 | 2.16 Inability to Determine Interest Rate
|
| " | 2.17 Pro Rata Treatment and Payments
|
| 39 | 2.18 Requirements of Law
|
| 41 | 2.19 Taxes
|
| 42 | 2.20 Indemnity
|
| 43 | 2.21 Change of Lending Office
|
| " | 2.22 Replacement of Lenders under Certain Circumstances
|
| " | Section 3. Letters of Credit
|
| " | 3.1 L/C Commitment
|
| 44 | 3.2 Procedure for Issuance of Letter of Credit
|
| " | 3.3 Commissions, Fees and Other Charges
|
| 45 | 3.4 L/C Participations
|
| " | 3.5 Reimbursement Obligation of the Borrower
|
| 46 | 3.6 Obligations Absolute
|
| " | 3.7 Letter of Credit Payments
|
| " | 3.8 Applications
|
| 47 | Section 4. Representations and Warranties
|
| " | 4.1 Financial Condition
|
| 48 | 4.2 No Change
|
| " | 4.3 Corporate Existence; Compliance with Law
|
| " | 4.4 Corporate Power; Authorization; Enforceable Obligations
|
| " | 4.5 No Legal Bar
|
| 49 | 4.6 No Material Litigation
|
| " | 4.7 No Default
|
| " | 4.8 Ownership of Property; Liens
|
| " | 4.9 Intellectual Property
|
| " | 4.10 Taxes
|
| " | 4.11 Federal Regulations
|
| 50 | 4.12 Labor Matters
|
| " | 4.13 Erisa
|
| " | 4.14 Investment Company Act; Other Regulations
|
| " | 4.15 Subsidiaries
|
| " | 4.16 Use of Proceeds
|
| 51 | 4.17 Environmental Matters
|
| 52 | 4.18 Accuracy of Information, etc
|
| " | 4.19 Security Documents
|
| " | 4.20 Solvency
|
| 53 | 4.21 Senior Indebtedness
|
| " | 4.22 Regulation H
|
| " | Section 5. Conditions Precedent
|
| " | 5.1 Conditions to Initial Extension of Credit
|
| 57 | 5.2 Conditions to Each Extension of Credit
|
| " | Section 6. Affirmative Covenants
|
| " | 6.1 Financial Statements
|
| 58 | 6.2 Certificates; Other Information
|
| 59 | 6.3 Payment of Obligations
|
| " | 6.4 Conduct of Business and Maintenance of Existence, etc
|
| 60 | 6.5 Maintenance of Property; Insurance
|
| " | 6.6 Inspection of Property; Books and Records; Discussions
|
| " | 6.7 Notices
|
| 61 | 6.8 Environmental Laws
|
| " | 6.9 Interest Rate Protection
|
| " | 6.10 Additional Collateral, etc
|
| 63 | Section 7. Negative Covenants
|
| " | 7.1 Financial Condition Covenants
|
| 65 | 7.2 Limitation on Indebtedness
|
| 66 | 7.3 Limitation on Liens
|
| 67 | 7.4 Limitation on Fundamental Changes
|
| 68 | 7.5 Limitation on Sale of Assets
|
| 69 | 7.6 Limitation on Dividends
|
| " | 7.7 Limitation on Capital Expenditures
|
| " | 7.8 Limitation on Investments, Loans and Advances
|
| 71 | 7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc
|
| " | 7.10 Limitation on Transactions with Affiliates
|
| " | 7.11 Limitation on Sales and Leasebacks
|
| " | 7.12 Limitation on Changes in Fiscal Periods
|
| " | 7.13 Limitation on Negative Pledge Clauses
|
| 72 | 7.14 Limitation on Lines of Business
|
| " | 7.15 Limitation on Amendments to Acquisition Documents
|
| " | Section 8. Events of Default
|
| 76 | Section 9. the Agents
|
| " | 9.1 Appointment
|
| " | 9.2 Delegation of Duties
|
| " | 9.3 Exculpatory Provisions
|
| " | 9.4 Reliance by Administrative Agent
|
| 77 | 9.5 Notice of Default
|
| " | 9.6 Non-Reliance on Agents and Other Lenders
|
| 78 | 9.7 Indemnification
|
| " | 9.8 Agent in Its Individual Capacity
|
| " | 9.9 Successor Administrative Agent
|
| 79 | 9.10 Authorization to Release Liens
|
| " | 9.11 Documentation Agent and Syndication Agent
|
| " | Section 10. Miscellaneous
|
| " | 10.1 Amendments and Waivers
|
| 80 | 10.2 Notices
|
| 81 | 10.3 No Waiver; Cumulative Remedies
|
| " | 10.4 Survival of Representations and Warranties
|
| " | 10.5 Payment of Expenses and Taxes
|
| 82 | 10.6 Successors and Assigns; Participations and Assignments
|
| 84 | 10.7 Adjustments; Set-off
|
| 85 | 10.8 Counterparts
|
| " | 10.9 Severability
|
| " | 10.10 Integration
|
| " | 10.11 Governing Law
|
| " | 10.12 Submission To Jurisdiction; Waivers
|
| 86 | 10.13 Acknowledgements
|
| " | 10.14 Waivers of Jury Trial
|
| 87 | 10.15 Confidentiality
|
| 109 | Section 1. Defined Terms
|
| " | 1.1 Definitions
|
| 113 | Section 2. Guarantee
|
| " | 2.1 Guarantee
|
| " | 2.2 Right of Contribution
|
| 114 | 2.3 No Subrogation
|
| " | 2.4 Amendments, etc. with respect to the Borrower Obligations
|
| " | 2.5 Guarantee Absolute and Unconditional
|
| 115 | 2.6 Reinstatement
|
| " | 2.7 Payments
|
| " | Section 3. Grant of Security Interest
|
| 116 | 4.1 Representations in Credit Agreement
|
| " | 4.2 Title; No Other Liens
|
| 117 | 4.3 Perfected First Priority Liens
|
| " | 4.4 Chief Executive Office
|
| " | 4.5 Inventory and Equipment
|
| " | 4.6 Farm Products
|
| " | 4.7 Pledged Securities
|
| " | 4.8 Receivables
|
| 118 | Section 5. Covenants
|
| " | 5.1 Covenants in Credit Agreement
|
| " | 5.2 Delivery of Instruments and Chattel Paper
|
| " | 5.3 Insurance
|
| " | 5.4 Maintenance of Perfected Security Interest; Further Documentation
|
| 119 | 5.5 Changes in Locations, Name, etc
|
| " | 5.6 Notices
|
| " | 5.7 Pledged Securities
|
| 120 | 5.8 Receivables
|
| 121 | 5.9 Intellectual Property
|
| 122 | Section 6. Remedial Provisions
|
| " | 6.1 Certain Matters Relating to Receivables
|
| " | 6.2 Communications with Obligors; Grantors Remain Liable
|
| 123 | 6.3 Pledged Stock
|
| 124 | 6.4 Proceeds to be Turned Over To Administrative Agent
|
| " | 6.5 Application of Proceeds
|
| " | 6.6 Code and Other Remedies
|
| 125 | 6.7 Registration Rights
|
| 126 | 6.8 Waiver; Deficiency
|
| " | Section 7. the Administrative Agent
|
| " | 7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc
|
| 128 | 7.2 Duty of Administrative Agent
|
| " | 7.3 Execution of Financing Statements
|
| " | 7.4 Authority of Administrative Agent
|
| " | Section 8. Miscellaneous
|
| " | 8.1 Amendments in Writing
|
| " | 8.2 Notices
|
| 129 | 8.3 No Waiver by Course of Conduct; Cumulative Remedies
|
| " | 8.4 Enforcement Expenses; Indemnification
|
| " | 8.5 Successors and Assigns
|
| " | 8.6 Set-Off
|
| 130 | 8.7 Counterparts
|
| " | 8.8 Severability
|
| " | 8.9 Integration
|
| " | 8.10 Governing Law
|
| " | 8.11 Submission To Jurisdiction; Waivers
|
| 131 | 8.12 Acknowledgements
|
| " | 8.13 Waivers of Jury Trial
|
| " | 8.14 Section Headings
|
| " | 8.15 Additional Grantors
|
| " | 8.16 Releases
|
| 145 | Consolidated EBITDA
|
| 236 | Revolving Credit Note
|
| 240 | Swing Line Note
|
EXHIBIT 10.9
EXECUTION COPY
================================================================================
$770,000,000
CREDIT AGREEMENT
AMONG
INTERNATIONAL HOME FOODS, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
MORGAN STANLEY SENIOR FUNDING, INC.,
AS DOCUMENTATION AGENT,
BANKERS TRUST COMPANY,
AS SYNDICATION AGENT,
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF NOVEMBER 1, 1996
================================================================================
TABLE OF CONTENTS
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Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.1 Term Loan Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2 Procedure for Term Loan Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.3 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Swing Line Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans . . . . . . . . . . . . . . . . . . . 25
2.8 Commitment Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.9 Termination or Reduction of Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.11 Mandatory Prepayments and Commitment Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.12 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches . . . . . . . . . . . . . . . . . . . . . . 29
2.14 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.15 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.16 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.17 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.18 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.19 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.20 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.21 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.22 Replacement of Lenders under Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2 Procedure for Issuance of Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.3 Commissions, Fees and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.7 Letter of Credit Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.8 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . 39
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.12 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.14 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.18 Accuracy of Information, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.19 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.21 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.22 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.1 Conditions to Initial Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.4 Conduct of Business and Maintenance of Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . 50
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . . 50
6.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.10 Additional Collateral, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.4 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.6 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.7 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.8 Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc. . . . . . . . . . . . . . 60
7.10 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.11 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.12 Limitation on Changes in Fiscal Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.13 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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7.14 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.15 Limitation on Amendments to Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.6 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.10 Authorization to Release Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.11 Documentation Agent and Syndication Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.6 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . . . . . . . . . . . . . 70
10.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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SCHEDULES:
[Download Table]
1.1A Commitments
1.1B Mortgaged Property
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
7.8(g) Existing Investments
7.10 Certain Fees
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Mortgage -- Borrower
D-2 Form of Mortgage -- Subsidiary Guarantor
E Form of Assignment and Acceptance
F Form of Legal Opinion of Vinson & Elkins
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
- iv -
CREDIT AGREEMENT, dated as of November 1, 1996, among
INTERNATIONAL HOME FOODS, INC., a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), MORGAN STANLEY SENIOR FUNDING, INC.,
as documentation agent (in such capacity, the "Documentation Agent"), BANKERS
TRUST COMPANY, as syndication agent (in such capacity, the "Syndication
Agent"), and THE CHASE MANHATTAN BANK, as administrative agent for the Lenders
hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to
time by Chase as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by Chase in connection with extensions of credit
to debtors); "Base CD Rate" shall mean the sum of (a) the product of
(i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus
the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Base CD Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
2
"Acquisition Agreement": the Agreement of Sale and Plan of
Merger, dated as of September 5, 1996, among the Sellers, AH Food Co.,
the Buyer and the Merger Sub.
"Acquisitions": the collective reference to the AHP
Acquisition and the Heritage Acquisition.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": Chase, together with its affiliates,
as the arranger of the Commitments and as the administrative agent for
the Lenders under this Agreement and the other Loan Documents,
together with any of its successors.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 51% or more of the securities having
ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Administrative
Agent, the Syndication Agent and the Documentation Agent.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"AH Food Co.": American Home Food Products, Inc., a Delaware
corporation.
"AHP": American Home Products Corporation, a Delaware
corporation.
"AHP Acquisition": as defined in Section 5.1(b).
"AHP Food Business": as defined in Section 5.1(b).
"AHP Holding": AHP Subsidiary Holding Corporation, a Delaware
corporation.
"Applicable Margin": for each Type of Loan, the rate per
annum set forth under the relevant column heading below:
[Download Table]
Eurodollar
ABR Loans Loans
--------- ----------
Tranche A Loans 1-1/2% 2-1/2%
Tranche B Term Loans 2% 3%
Tranche C Term Loans 2-1/2% 3-1/2%
3
; provided, that on and after the first Adjustment Date occurring
after the completion of four full fiscal quarters of the Borrower
after the Closing Date, the Applicable Margin with respect to Tranche
A Loans will be determined pursuant to the Pricing Grid.
"Application": an application, in such form (reasonably
acceptable to the Borrower) as the relevant Issuing Lender may specify
from time to time, requesting such Issuing Lender to open a Letter of
Credit.
"Asset Sale": any Disposition of Property other than (a) any
Disposition of Property permitted by any of clauses (a) through (h) of
Section 7.5 and (b) any Disposition of Property which, together with
any related Disposition of Property, yields gross proceeds to the
Borrower or any of its Subsidiaries (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of
other non-cash proceeds) of less than $1,000,000, provided, that the
aggregate gross proceeds of Dispositions of Property excluded from the
definition of "Asset Sale" pursuant to this clause (b) shall not
exceed $5,000,000 in any fiscal year of the Borrower.
"Asset Swap": any substantially concurrent purchase and sale,
or exchange, of Property used or usable in the business of the
Borrower and its Subsidiaries.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to (a) such Lender's Revolving Credit
Commitment minus (b) such Lender's Revolving Extensions of Credit;
provided, that in calculating any Lender's Revolving Extensions of
Credit for the purpose of determining such Lender's Available
Revolving Credit Commitment pursuant to Section 2.8(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed
to be zero.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Buyer": AHFP Holding Corporation, a Delaware corporation.
4
"Canadian Subsidiary": any Subsidiary of the Borrower
organized under the laws of Canada (or any jurisdiction therein).
"Canadian Subsidiary Equivalent Outstandings": as defined in
Section 7.2(h).
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with
GAAP.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or 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; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities
of six months or less from the date of acquisition issued by any
Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof having combined capital
and surplus of not less than $250,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services or P-2
by Moody's Investors Service, Inc., or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of
acquisition; (d) money market accounts or funds with or issued by
Qualified Issuers; and (e) repurchase obligations with a term of not
more than 90 days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the qualifications
specified in clause (b) above.
"C/D Assessment Rate": for any day as applied to any ABR
Loan, the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund maintained by the
Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the FDIC (or any
successor)
5
for the FDIC's (or such successor's) insuring time deposits at offices
of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect
of new non-personal time deposits in Dollars having a maturity of 30
days or more.
"Chase": The Chase Manhattan Bank.
"Closing Date": November 1, 1996.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C
Term Loan Commitment and the Revolving Credit Commitment of such
Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on
and after the first Adjustment Date occurring after the completion of
four full fiscal quarters of the Borrower after the Closing Date, the
Commitment Fee Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated October 1996 and furnished to the
Lenders.
"Consolidated Current Assets": at a particular date, all
amounts (other than cash and Cash Equivalents) which would, in
conformity with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be set forth opposite
the caption "total current liabilities" (or any like
6
caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date, but excluding (a) the current portion of
any Funded Debt of the Borrower and its Subsidiaries, (b) without
duplication of clause (a) above, all Indebtedness consisting of
Revolving Credit Loans or Swing Line Loans to the extent otherwise
included therein, (c) accrued interest expense and (d) accrued income
tax expense.
"Consolidated EBITDA": for any period, Consolidated Net
Income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income
for such period, the sum of (a) total income tax expense, (b) interest
expense, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated
with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but
not limited to, goodwill) and organization costs, (e) any
extraordinary expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated
Net Income for such period, losses on sales of assets other than
inventory sold in the ordinary course of business) and (f) any other
non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a)
interest income, (b) any extraordinary income or gains (including,
whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on
the sales of assets other than inventory sold in the ordinary course
of business) and (c) any other non-cash income, all as determined on a
consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) (i) Consolidated EBITDA for such period less (ii) the
lesser of (x) the aggregate amount actually paid by the Borrower and
its Subsidiaries in cash during such period on account of Capital
Expenditures (excluding (1) the principal amount of Indebtedness
(other than Loans) incurred in connection with such expenditures and
(2) Capital Expenditures made pursuant to Section 7.7(b)) and (y) if
applicable, the Scheduled Capital Expenditure Amount for such period
to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum
(without duplication) of (a) Consolidated Interest Expense for such
period, (b) Consolidated Tax Expense for such period and (c) scheduled
payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including the
Term Loans).
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease
Obligations), net of interest income, of the Borrower and its
Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing
and net costs under Interest
7
Rate Protection Agreements to the extent such net costs are allocable
to such period in accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there
shall be excluded therefrom the income (or deficit) of any Person
accrued prior to the date it becomes a Subsidiary of the Borrower or
is merged into or consolidated with the Borrower or any of its
Subsidiaries.
"Consolidated Tax Expense": for any period, provision for
cash income taxes made by the Borrower or any of its Subsidiaries for
such period on a consolidated basis.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness, net of cash and Cash
Equivalents, of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Acquisitions and the other
transactions contemplated hereby, and each other director, if, in each
case, such other director's nomination for election to the board of
directors of the Borrower is recommended by a majority of the then
Continuing Directors or such other director receives the vote of the
Permitted Investors in his or her election by the shareholders of the
Borrower.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Contributed Equity": (a) the proceeds of any capital
contribution made to the Borrower (or to a Parent and in turn
contributed to the Borrower) by any member of the Existing Investor
Group and (b) the proceeds of any private placement of Capital Stock
of the Borrower (or of a Parent and in turn contributed to the
Borrower) consummated after the Closing Date, provided, that the
aggregate amount of proceeds of sales of Capital Stock to Persons
other than members of the Existing Investor Group that may be included
in "Contributed Equity" pursuant to this clause (b) shall not exceed
$25,000,000 during the period from the Closing Date to the first
anniversary thereof and shall not exceed $50,000,000 during the term
of this Agreement. As used in this definition, (i) "Existing Investor
Group" refers to any Permitted Investor (other than any Parent), AHP
or any of its Affiliates or any Person that owns Capital Stock of the
Buyer on the Closing Date or that acquires Capital Stock of the Buyer
within 60 days after the Closing Date and (ii)
8
"Parent" refers to the Buyer or any other direct or indirect holding
company parent of the Borrower.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States
of America.
"ECF Percentage": 75%; provided, that, with respect to each
fiscal year of the Borrower ending on or after December 31, 1998, the
ECF Percentage shall be reduced to 50% if the Consolidated Leverage
Ratio as of the last day of such fiscal year is not greater than 4.50
to 1.0.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"Equity Financing Proceeds": any Contributed Equity used to
finance any Capital Expenditure made pursuant to Section 7.7(b) or any
investment made pursuant to Section 7.8(h).
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D
of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for
9
delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of
its Eurodollar Loans to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated EBITDA for such fiscal year, (ii) decreases in
Consolidated Working Capital for such fiscal year, (iii) the amount of
any refund received by the Borrower and its Subsidiaries during such
fiscal year on taxes paid by the Borrower and its Subsidiaries, (iv)
cash dividends, cash interest and other similar cash payments received
by the Borrower during such fiscal year in respect of investments to
the extent not included in Consolidated Net Income to determine
Consolidated EBITDA for such fiscal year, (v) any purchase price
adjustments paid to the Borrower during such fiscal year pursuant to
the Acquisition Agreement, and (vi) extraordinary cash gains to the
extent subtracted or otherwise not included in Consolidated Net Income
to determine Consolidated EBITDA for such fiscal year over (b) the
sum, without duplication, of (i) the aggregate amount actually paid by
the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (excluding (x) the principal amount of
Indebtedness incurred in connection with such expenditures and (y) any
such expenditures made pursuant to Section 7.7(b) except, in the case
of this clause (y), to the extent that the amounts used to make such
expenditures were included in determining Consolidated EBITDA for such
fiscal year), (ii) the aggregate amount of all prepayments of
Revolving Credit Loans and Swing Line Loans during such fiscal year to
the extent accompanying permanent optional reductions of the Revolving
Credit Commitments and all optional prepayments of the Term Loans
during such fiscal year, (iii) the aggregate amount of all regularly
scheduled principal payments of Funded Debt (including, without
limitation, the Term Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit
facility to the extent there is not an equivalent permanent reduction
in commitments thereunder), (iv) increases in Consolidated Working
Capital for such fiscal year, (v) cash interest expense of the
10
Borrower and its Subsidiaries for such fiscal year, (vi) cash taxes
actually paid in such fiscal year or to be paid in the subsequent
fiscal year on account of such fiscal year to the extent added to
Consolidated Net Income to determine Consolidated EBITDA for such
fiscal year, (vii) the amount of all loans and advances made in such
fiscal year pursuant to Section 7.8(d) (net of any repayments of such
loans and advances made during such fiscal year), (viii) the amount of
all investments made in such fiscal year pursuant to Section 7.8(n),
(ix) the amount of all deposits required to be made by the Borrower or
any of its Subsidiaries during such fiscal year in connection with
investments made pursuant to Section 7.8(l) (net of any amounts
returned in respect of such deposits during such fiscal year), (x)
dividends paid by the Borrower during such fiscal year in accordance
with Section 7.6 to the extent not subtracted in the determination of
Consolidated Net Income of the Borrower for such fiscal year, (xi)
previously expensed royalty payments made during such fiscal year to
the extent not subtracted in the determination of Consolidated Net
Income of the Borrower for such fiscal year, (xii) any purchase price
adjustments paid by the Borrower during such fiscal year pursuant to
the Acquisition Agreement, and (xiii) extraordinary cash losses to the
extent added to Consolidated Net Income to determine Consolidated
EBITDA for such fiscal year.
"Excess Cash Flow Application Date": as defined in Section
2.11(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary the
pledge of all of whose Capital Stock as Collateral would, in the good
faith judgment of the Borrower, result in adverse tax consequences to
the Borrower.
"Facility": each of (a) the Tranche A Term Loan Commitments
and the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility"), (c)
the Tranche C Term Loan Commitments and the Tranche C Term Loans made
thereunder (the "Tranche C Term Loan Facility") and (d) the Revolving
Credit Commitments and the extensions of credit made thereunder (the
"Revolving Credit Facility").
"Federal Funds Effective Rate": as defined in the definition
of "ABR".
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year
from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including, without limitation,
all current maturities and current sinking fund payments in respect of
such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
11
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time set forth in
the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards
Board and the rules and regulations of the Securities and Exchange
Commission, or in such other statements by such other entity as may be
in general use by significant segments of the accounting profession,
which are applicable to the circumstances of the Borrower as of the
date of determination, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the
date hereof and consistent with those used in the preparation of the
audited financial statements of the AHP Food Business or Heritage, as
the case may be, in respect of the fiscal year ended December 31, 1995
delivered pursuant to Section 4.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change
results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and
the Administrative Agent agree to enter into negotiations in order to
amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been
made. Until such time as such an amendment shall have been executed
and delivered by the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" refers to
changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission
(or successors thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise
12
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that
the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.
"Heritage": Heritage Brands Holdings, Inc., a Delaware
corporation.
"Heritage Acquisition": as defined in Section 5.1(b).
"Hicks Muse": Hicks, Muse, Tate & Furst Incorporated.
"HM Equity": as defined in Section 5.1(b).
"Incur": as defined in Section 7.2; and the term "Incurrence"
shall have a correlative meaning.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
property or services (other than current trade payables and accrued
expenses incurred in the ordinary course of such Person's business),
(c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created
or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even
though 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), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar
facilities, (g) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (f) above
and (i) all obligations of the kind referred to in clauses (a) through
(g) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has assumed
or become liable for the payment of such obligation.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
13
"Insolvent": pertaining to a condition of Insolvency.
"Initial Public Offering": an underwritten public offering by
the Borrower of Capital Stock of the Borrower pursuant to a
registration statement filed with the Securities and Exchange
Commission in accordance with the Securities Act of 1933, as amended.
"Intellectual Property": as defined in Section 4.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period and (d) as to any Loan, the date of repayment
thereof at final stated maturity.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two,
three, six or (if available to all Lenders under the relevant
Facility) nine or twelve months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and (b) thereafter, each
period commencing on the last day of the next preceding Interest
Period applicable to such Eurodollar Loan and ending one, two, three,
six or (if available to all Lenders under the relevant Facility) nine
or twelve months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or beyond the
date final payment is due on the Tranche A Term Loans, the
Tranche B Term Loans or the Tranche C Term Loans, as the case
may be, shall end on the Revolving Credit Termination Date or
such due date, as applicable;
(iii) 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 end on the last
Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
14
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to
or under which the Borrower or any of its Subsidiaries is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Issuing Lender": Chase or any of its affiliates or, with the
approval of the Administrative Agent, any of the other Lenders which
chooses to be an Issuing Lender, in its capacity as issuer of any
Letter of Credit.
"L/C Commitment": $25,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than
the Issuing Lender that issued such Letter of Credit.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility,
the holders of not less than 51% of the aggregate unpaid principal
amount of the Term Loans or the Total Revolving Extensions of Credit,
as the case may be, outstanding under such Facility (or, in the case
of the Revolving Credit Facility, prior to any termination of the
Revolving Credit Commitments, the holders of not less than 51% of the
aggregate Revolving Credit Commitments).
15
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b)
the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Merger": as defined in Section 5.1(b).
"Merger Sub": AHFP Acquisition Corporation, a Delaware
corporation.
"Mortgaged Properties": the real properties listed on
Schedule 1.1B, as to which the Administrative Agent for the benefit of
the Lenders shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative
Agent for the benefit of the Lenders, substantially in the form of
Exhibit D-1 or D-2, as the case may be (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such
mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and
when received) of such Asset Sale or Recovery Event, net of attorneys'
fees, accountants' fees, investment banking fees, survey costs, title
insurance premiums, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such Asset Sale or Recovery Event (other
than any Lien pursuant to a Security Document) and other customary
fees and expenses actually incurred in connection therewith, net of
taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and
any tax sharing arrangements) and net of purchase price adjustments
reasonably expected to be payable in connection therewith and (b) in
connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash
proceeds received from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants'
16
fees, underwriting discounts and commissions and other customary fees
and expenses actually incurred in connection therewith, provided that,
with respect to any issuance or sale of debt securities or instruments
as described in this clause (b), to the extent that such cash proceeds
are used to refinance any Indebtedness permitted by this Agreement,
then such cash proceeds shall not constitute "Net Cash Proceeds" for
the purpose of this Agreement.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(b).
"Notes": the collective reference to the Tranche A Term
Notes, the Tranche B Term Notes, the Tranche C Term Notes, the
Revolving Credit Notes and the Swing Line Note.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Interest Rate Protection
Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit,
any Interest Rate Protection Agreement entered into with any Lender or
any affiliate of any Lender or any other document made, delivered or
given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": the collective reference to Hicks Muse
and its Affiliates and principals.
"Permitted Issuance": (a) the issuance by the Borrower of
shares of Capital Stock as dividends on issued and outstanding Capital
Stock of the same class of the Borrower or pursuant to any dividend
reinvestment plan, (b) the issuance by the Borrower of options or
other equity securities of the Borrower to outside directors, members
of management or employees of the Borrower or any Subsidiary of the
Borrower, (c) the issuance of securities as interest or dividends on
pay-in-kind debt or preferred equity securities permitted hereunder
and under the Security Documents, and (d) the issuance to the Borrower
or any Subsidiary (or any director, with respect to directors'
qualifying shares) by any Subsidiary of the Borrower of any of its
Capital Stock, in
17
each case with respect to this clause (d) to the extent such Capital
Stock is pledged to the Administrative Agent for the benefit of the
Lenders pursuant to the Guarantee and Collateral Agreement (provided,
that only 65% of the Capital Stock of an Excluded Foreign Subsidiary
is required to be so pledged).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Prime Rate": as defined in the definition of "ABR".
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17.
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Qualified Issuer": any commercial bank (a) which has capital
and surplus in excess of $250,000,000 and (b) the outstanding
long-term debt securities of which are rated at least A-2 by Standard
& Poor's Ratings Services or at least P-2 by Moody's Investors
Service, Inc., or carry an equivalent rating by a nationally
recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.
"Recovery Event": any settlement of or payment in respect of
any property insurance or casualty insurance claim or any condemnation
proceeding relating to any Property of the Borrower or any of its
Subsidiaries, excluding any such settlement or payment which, together
with any related settlement or payment, yields gross proceeds to the
Borrower or any of its Subsidiaries of less than $1,000,000.
"Refunded Swing Line Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
18
"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the
Borrower or any of its Subsidiaries in connection therewith which are
not applied to prepay the Term Loans or reduce the Revolving Credit
Commitments pursuant to Section 2.11(b) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of
the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring six months
after such Reinvestment Event and (b) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to,
acquire assets useful in the Borrower's business with all or any
portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under the regulations issued pursuant to
Section 4043(b) of ERISA.
"Required Lenders": the holders of not less than 51% of (a)
until the Closing Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans and (ii)
the aggregate Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the Total Revolving Extensions of
Credit.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation
(including, without limitation, Environmental Laws) or determination
of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.
19
"Responsible Officer": the chief executive officer, the
president, any senior vice president, the chief financial officer or
the treasurer of the Borrower (including, in any event, any person who
is an officer of the Borrower and is named on the closing certificate
delivered by the Borrower on the Closing Date pursuant to Section
5.1(g) whether or not such person holds any of the foregoing
positions).
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name
on Schedule 1.1A, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the
Revolving Credit Commitments is $100,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility".
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Note": any promissory note of the Borrower
evidencing Revolving Credit Loans.
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": the earlier of (a) the
Scheduled Revolving Credit Termination Date and (b) the date on which
the Tranche A Term Loans shall be paid in full.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding, (b) such Lender's Revolving Credit Percentage of the
L/C Obligations then outstanding and (c) such Lender's Revolving
Credit Percentage of the aggregate principal amount of Swing Line
Loans then outstanding.
"Scheduled Capital Expenditure Amount": in connection with
the calculation of the Consolidated Fixed Charge Coverage Ratio as at
the end of any period of four consecutive fiscal
20
quarters of the Borrower ending on the last day of any fiscal quarter
set forth below, the amount set forth opposite such fiscal quarter:
[Download Table]
Fiscal Quarter Ending Amount
--------------------- ------
December 31, 1997 to December 31, 1998 $35,000,000
March 31, 1999 $36,250,000
June 30, 1999 $37,500,000
September 30, 1999 $38,750,000
December 31, 1999 and thereafter $40,000,000
"Scheduled Revolving Credit Termination Date": March 31,
2003.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Sellers": the collective reference to AHP and AHP Holding.
"Senior Subordinated Note Indenture": the Indenture entered
into by the Borrower and certain of its Subsidiaries in connection
with the issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the
Borrower issued on the Closing Date pursuant to the Senior
Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the fair value of the property of
such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital.
"Specified Change of Control": a "Change of Control" as
defined in the Senior Subordinated Note Indenture.
21
"Subsequent Purchase": as defined in Section 5.1(b).
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000.
"Swing Line Lender": as defined in Section 2.6.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Note": any promissory note of the Borrower
evidencing Swing Line Loans.
"Swing Line Participation Amount": as defined in Section 2.7.
"Term Loan Facilities": the collective reference to the
Tranche A Term Loan Facility, Tranche B Term Loan Facility and Tranche
C Term Loan Facility.
"Term Loan Lenders": the collective reference to the Tranche
A Term Loan Lenders, the Tranche B Term Loan Lenders and the Tranche C
Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans, Tranche B Term Loans and Tranche C Term Loans.
"Test Period": any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters of
the Borrower subsequent to the Closing Date).
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders at such time.
"Tranche A Loans": the collective reference to the Tranche A
Term Loans, the Revolving Credit Loans and the Swing Line Loans.
22
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche A Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A. The original aggregate amount of
the Tranche A Term Loan Commitments is $300,000,000.
"Tranche A Term Loan Facility": as defined in the definition
of "Facility".
"Tranche A Term Loan Lender": each Lender which has a Tranche
A Term Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to any Tranche A Term
Loan Lender at any time, the percentage which such Lender's Tranche A
Term Loan Commitment then constitutes of the aggregate Tranche A Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the principal amount of such Lender's Tranche A Term
Loan then outstanding constitutes of the aggregate principal amount of
the Tranche A Term Loans then outstanding).
"Tranche A Term Note": any promissory note of the Borrower
evidencing Tranche A Term Loans.
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche B Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A. The original aggregate amount of
the Tranche B Term Loan Commitments is $200,000,000.
"Tranche B Term Loan Facility": as defined in the definition
of "Facility".
"Tranche B Term Loan Lender": each Lender which has a Tranche
B Term Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any
time, the percentage which such Lender's Tranche B Term Loan
Commitment then constitutes of the aggregate Tranche B Term Loan
Commitments (or, at any time after the Closing Date, the percentage
which the principal amount of such Lender's Tranche B Term Loan then
outstanding constitutes of the aggregate principal amount of the
Tranche B Term Loans then outstanding).
"Tranche B Term Note": any promissory note of the Borrower
evidencing Tranche B Term Loans.
23
"Tranche C Term Loan": as defined in Section 2.1.
"Tranche C Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche C Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche C Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A. The original aggregate amount of
the Tranche C Term Loan Commitments is $170,000,000.
"Tranche C Term Loan Facility": as defined in the definition
of "Facility".
"Tranche C Term Loan Lender": each Lender which has a Tranche
C Term Loan Commitment or which has made a Tranche C Term Loan.
"Tranche C Term Loan Percentage": as to any Lender at any
time, the percentage which such Lender's Tranche C Term Loan
Commitment then constitutes of the aggregate Tranche C Term Loan
Commitments (or, at any time after the Closing Date, the percentage
which the principal amount of such Lender's Tranche C Term Loan then
outstanding constitutes of the aggregate principal amount of the
Tranche C Term Loans then outstanding).
"Tranche C Term Note": any promissory note of the Borrower
evidencing Tranche C Term Loans.
"Transferee": as defined in Section 10.6(g).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Unapplied Excess Cash Flow": any Excess Cash Flow that is
not required to be applied toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments pursuant to Section
2.11(c), as determined on each Excess Cash Flow Application Date in
respect of the immediately preceding fiscal year of the Borrower.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
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1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP;
provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and
conditions hereof, (a) each Tranche A Term Loan Lender severally agrees to make
a term loan (a "Tranche A Term Loan") to the Borrower on the Closing Date in an
amount not to exceed the amount of the Tranche A Term Loan Commitment of such
Lender, (b) each Tranche B Term Loan Lender severally agrees to make a term
loan (a "Tranche B Term Loan") to the Borrower on the Closing Date in an amount
not to exceed the amount of the Tranche B Term Loan Commitment of such Lender
and (c) each Tranche C Term Loan Lender severally agrees to make a term loan (a
"Tranche C Term Loan") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche C Term Loan Commitment of such Lender. The
Term Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date) requesting that the Term
Loan Lenders make the Term Loans on the Closing Date and specifying the amount
to be borrowed. The Term Loans made on the Closing Date shall initially be ABR
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Term Loan Lender thereof. Not later than 12:00 Noon, New York City
time, on the Closing Date each Term Loan Lender shall make available to the
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Administrative Agent at its office specified in Section 10.2 an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent with the aggregate of
the amounts made available to the Administrative Agent by the Term Loan Lenders
in immediately available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Lender shall mature in 13 consecutive semi-annual installments,
commencing on March 31, 1997, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth
below opposite such installment:
[Download Table]
Installment Principal Amount
----------- ----------------
March 31, 1997 $12,500,000
September 30, 1997 12,500,000
March 31, 1998 15,000,000
September 30, 1998 15,000,000
March 31, 1999 20,000,000
September 30, 1999 20,000,000
March 31, 2000 25,000,000
September 30, 2000 25,000,000
March 31, 2001 27,500,000
September 30, 2001 30,000,000
March 31, 2002 30,000,000
September 30, 2002 32,500,000
March 31, 2003 35,000,000
(b) The Tranche B Term Loan of each Tranche B Lender shall
mature in 16 consecutive semi-annual installments, commencing on March 31,
1997, each of which shall be in an amount equal to such Lender's Tranche B Term
Loan Percentage multiplied by the amount set forth below opposite such
installment:
[Download Table]
Installment Principal Amount
----------- ----------------
March 31, 1997 $ 250,000
September 30, 1997 250,000
March 31, 1998 250,000
September 30, 1998 250,000
March 31, 1999 250,000
September 30, 1999 250,000
March 31, 2000 250,000
September 30, 2000 250,000
March 31, 2001 250,000
September 30, 2001 250,000
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[Download Table]
March 31, 2002 250,000
September 30, 2002 250,000
March 31, 2003 250,000
September 30, 2003 26,750,000
March 31, 2004 85,000,000
September 30, 2004 85,000,000
(c) The Tranche C Term Loan of each Tranche C Lender shall
mature in 18 consecutive semi-annual installments, commencing on March 31,
1997, each of which shall be in an amount equal to such Lender's Tranche C Term
Loan Percentage multiplied by the amount set forth below opposite such
installment:
[Download Table]
Installment Principal Amount
----------- ----------------
March 31, 1997 $ 250,000
September 30, 1997 250,000
March 31, 1998 250,000
September 30, 1998 250,000
March 31, 1999 250,000
September 30, 1999 250,000
March 31, 2000 250,000
September 30, 2000 250,000
March 31, 2001 250,000
September 30, 2001 250,000
March 31, 2002 250,000
September 30, 2002 250,000
March 31, 2003 250,000
September 30, 2003 250,000
March 31, 2004 250,000
September 30, 2004 1,250,000
March 31, 2005 82,500,000
September 30, 2005 82,500,000
2.4 Revolving Credit Commitments. (a) Subject to
the terms and conditions hereof, each Revolving Credit Lender severally agrees
to make revolving credit loans ("Revolving Credit Loans") to the Borrower from
time to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such Lender's
Revolving Credit Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swing Line Loans
then outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.5 and 2.12, provided
that no Revolving Credit Loan
27
shall be made as a Eurodollar Loan after the day that is one month prior to the
Scheduled Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:00 Noon, New York City time, (a) three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in the
case of ABR Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case
of Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in
the case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess
thereof (or, if the then aggregate Available Revolving Credit Commitments are
less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
provided, that the Swing Line Lender may request, on behalf of the Borrower,
borrowings under the Revolving Credit Commitments which are ABR Loans in other
amounts pursuant to Section 2.7. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender thereof. Each Revolving Credit Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
Section 10.2 prior to 12:00 Noon, New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Revolving Credit Lenders and in like funds as received by the
Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, Chase (in such capacity, the "Swing Line Lender") agrees to
make a portion of the credit otherwise available to the Borrower under the
Revolving Credit Commitments from time to time during the Revolving Credit
Commitment Period by making swing line loans ("Swing Line Loans") to the
Borrower; provided that (i) the aggregate principal amount of Swing Line Loans
outstanding at any time shall not exceed the Swing Line Commitment then in
effect (notwithstanding that the Swing Line Loans outstanding at any time, when
aggregated with the Swing Line Lender's other outstanding Revolving Credit
Loans hereunder, may exceed the Swing Line Commitment then in effect) and (ii)
the Borrower shall not request, and the Swing Line Lender shall not make, any
Swing Line Loan if, after giving effect to the making of such Swing Line Loan,
the aggregate amount of the Available Revolving Credit Commitments would be
less than zero. During the Revolving Credit Commitment Period, the Borrower
may use the Swing Line Commitment by borrowing, repaying and reborrowing, all
in accordance with the terms and conditions hereof. Swing Line Loans shall be
ABR Loans only.
28
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment
shall be in an amount equal to $250,000 or a whole multiple of $100,000 in
excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing
Date specified in a notice in respect of Swing Line Loans, the Swing Line
Lender shall make available to the Administrative Agent at its office specified
in Section 10.2 an amount in immediately available funds equal to the amount of
the Swing Line Loan to be made by the Swing Line Lender. The Administrative
Agent shall make the proceeds of such Swing Line Loan available to the Borrower
on such Borrowing Date by depositing such proceeds in the account of the
Borrower with the Administrative Agent on such Borrowing Date in immediately
available funds.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which
hereby irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date of such notice, to repay the Swing Line Lender. Each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at its office set forth in Section 10.2
in immediately available funds, not later than 10:00 A.M., New York City time,
one Business Day after the date of such notice. The proceeds of such Revolving
Credit Loans shall be immediately applied by the Swing Line Lender to repay the
Refunded Swing Line Loans. The Borrower irrevocably authorizes the Swing Line
Lender to charge the Borrower's accounts with the Administrative Agent (up to
the amount available in each such account) in order to immediately pay the
amount of such Refunded Swing Line Loans to the extent amounts received from
the Revolving Credit Lenders are not sufficient to repay in full such Refunded
Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest
in an amount equal to (i) its Revolving Credit Percentage times (ii) the
aggregate principal amount of Swing Line Loans then outstanding which were to
have been repaid with such Revolving Credit Loans (the "Swing Line
Participation Amount").
29
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment on account of
the Swing Line Loans, the Swing Line Lender will distribute to such Lender its
Swing Line Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender's pro rata portion of such
payment if such payment is not sufficient to pay the principal of and interest
on all Swing Line Loans then due); provided, however, that in the event that
such payment received by the Swing Line Lender is required to be returned, such
Revolving Credit Lender will return to the Swing Line Lender any portion
thereof previously distributed to it by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.7(b) and to purchase participating interests
pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly
in arrears on the last day of each March, June, September and December and on
the Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.9 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Revolving Credit Commitments then in effect. Any such reduction shall be
in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect. Upon receipt of
any notice pursuant to this Section 2.9, the Administrative Agent shall
promptly notify each Revolving Credit Lender of the contents thereof.
30
2.10 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of ABR Loans, which notice shall
specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section
2.20. Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein. Amounts prepaid on account of the Term Loans may not be reborrowed.
Partial prepayments of Eurodollar Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof. Partial prepayments of ABR
Loans (other than Swing Line Loans) shall be in an aggregate principal amount
of $500,000 or a whole multiple thereof. Partial prepayments of Swing Line
Loans shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
2.11 Mandatory Prepayments and Commitment Reductions. (a)
If any Capital Stock or Indebtedness shall be issued or Incurred by the
Borrower or any of its Subsidiaries (excluding any Permitted Issuance and any
Incurrence of Indebtedness in accordance with Section 7.2 as in effect on the
date of this Agreement), an amount equal to 100% of the Net Cash Proceeds
thereof (excluding any Equity Financing Proceeds) shall be applied on the date
of such issuance or Incurrence toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section 2.11(d).
(b) If on any date the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof, such Net
Cash Proceeds shall be applied, within five Business Days after such date,
toward the prepayment of the Term Loans and the reduction of the Revolving
Credit Commitments as set forth in Section 2.11(d); provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales that may be excluded from the foregoing requirement in any fiscal year of
the Borrower pursuant to a Reinvestment Notice, when added to the aggregate
fair market value of Property Disposed of in connection with Asset Swaps during
such fiscal year, shall not exceed $20,000,000 and (ii) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.11(d).
(c) If, for any fiscal year of the Borrower commencing with
the fiscal year ending December 31, 1997, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply the
ECF Percentage of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
2.11(d). Each such prepayment and commitment reduction shall be made on a date
(an "Excess Cash Flow Application Date") no later than five days after the
earlier of (i) the date on which the financial statements of the Borrower
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.
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(d) Amounts to be applied in connection with prepayments and
Revolving Credit Commitment reductions made pursuant to this Section 2.11 shall
be applied, first, to the prepayment of the Term Loans and, second, to reduce
permanently the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the
Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the aggregate
Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans and Swing Line Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent. The application of any prepayment pursuant to this
Section 2.11 shall be made first to ABR Loans and second to Eurodollar Loans.
Amounts prepaid on account of the Term Loans may not be reborrowed.
2.12 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable notice
of such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no ABR Loan under a
particular Facility may be converted into a Eurodollar Loan (i) when any Event
of Default has occurred and is continuing and the Administrative Agent or the
Majority Facility Lenders in respect of such Facility have determined in its or
their sole discretion not to permit such conversions or (ii) after the date
that is one month prior to the final scheduled termination or maturity date of
such Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect of
such Facility have determined in its or their sole discretion not to permit
such continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to ABR Loans on
the last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
2.13 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, (a) the aggregate
32
principal amount of the Eurodollar Loans comprising each Eurodollar Tranche
shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof, (b) no more than six Eurodollar Tranches under a particular Facility
shall be outstanding at any one time and (c) no more than sixteen Eurodollar
Tranches in the aggregate shall be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum which is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.14 plus 2% or (y) in the case of Reimbursement Obligations, the
rate applicable to ABR Loans under the Revolving Credit Facility plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of
any such other amounts that do not relate to a particular Facility, the rate
applicable to ABR Loans under the Revolving Credit Facility plus 2%), in each
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section 2.14 shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest, fees
and commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the
33
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate applicable to any Eurodollar Loan.
2.16 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted to ABR Loans on the last day of the
Interest Period applicable thereto. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made, with regard to the applicable Facility, pro rata
according to the respective Tranche A Term Loan Percentages, Tranche B Term
Loan Percentages, Tranche C Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made pro
rata according to the respective outstanding principal amounts of the Term
Loans then held by the Term Loan Lenders. The amount of each principal payment
of the Term Loans shall be applied to reduce the then remaining installments of
the Tranche A Term Loans, Tranche B Term Loans and Tranche C Term Loans, pro
rata based upon the then remaining number of installments thereof, after giving
effect to all prior reductions thereto (i.e., each then remaining installment
of the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term Loans, as
the case may be, shall be reduced by an amount equal to the aggregate amount to
be applied to the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans, as the case may be, divided by the number of the then remaining
installments for such Tranche A Term Loans, Tranche B Term Loans or Tranche C
Term Loans); provided, that if the amount to be so applied to any installment
would exceed the then remaining amount of such installment, then an amount
equal to such excess shall be applied to the next
34
succeeding installment after giving effect to all prior reductions thereto
(including the amount of prepayments theretofore allocated pursuant to the
preceding portion of this sentence). Notwithstanding the foregoing, the first
$40,000,000 of optional prepayments of the Term Loans shall be applied to such
installments of the Term Loans as the Borrower shall elect (other than
scheduled installments of the Tranche B Term Loans prior to September 30, 2003
and scheduled installments of the Tranche C Term Loans prior to March 31,
2005).
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 10.2, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to
the Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (except, in the
case of Eurodollar Loans, as otherwise provided in clause (i) of the definition
of "Interest Period"). In the case of any extension of any payment of
principal pursuant to the preceding sentence, interest thereon shall be payable
at the then applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
2.17(e) shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans under the
relevant Facility, on demand, from the Borrower.
2.18 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change
35
the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 2.19, the
establishment of a tax based on the overall net income of such Lender
and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.18, it
shall promptly (and in any event no later than 90 days after such Lender
becomes entitled to make such claim) notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled. If the Borrower notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this Section 2.18(a), the Borrower may
convert all Eurodollar Loans of such Lender then outstanding into ABR Loans in
accordance with Section 2.12 and shall, additionally, reimburse such Lender for
any cost in accordance with Section 2.20.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction; provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
36
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.18, showing in reasonable detail the calculation
thereof and certifying that it is generally charging such costs to other
similarly situated borrowers under similar credit facilities, submitted by any
Lender to the Borrower (with a copy to the Administrative Agent), shall be
conclusive in the absence of manifest error, provided that the determination of
such amounts shall be made in good faith in a manner generally consistent with
such Lender's standard practices. The obligations of the Borrower pursuant to
this Section 2.18 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder for a period of
nine months thereafter.
2.19 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the
amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof to the extent such
Lender's compliance with the requirements of Section 2.19(b) at the time such
Lender becomes a party to this Agreement fails to establish a complete
exemption from such withholding. Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.19 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder for a period of nine months thereafter.
(b) Each Lender (or Transferee) that is not (i) a citizen or
resident of the United States of America, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States of
America (or any jurisdiction thereof), or (iii) an estate or trust that is
subject to federal income taxation regardless of the source of its income
(each, a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form
37
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from
U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, an annual certificate representing, under penalty of perjury, that
such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms on
or before the expiration or obsolescence and promptly upon the invalidity of
any form previously delivered by such Non-U.S. Lender and after the occurrence
of any event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by the Borrower
of the Administrative Agent for filing and completing such forms. Each
Non-U.S. Lender agrees, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower (for the benefit
of the Borrower and the Administrative Agent) such other forms as may be
reasonably required in order to establish the legal entitlement of such Lender
to an exemption from withholding with respect to payments of interest under
this Agreement or the other Loan Documents, provided that in determining the
reasonableness of such a request, such Lender shall be entitled to consider the
cost of complying with such request (to the extent unreimbursed by the
Borrower) that would be imposed on such Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in
a position to provide any previously delivered certificate to the Borrower (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 2.19(b), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.19(b) that such Non-U.S. Lender is not legally able to deliver.
2.20 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (excluding loss of profit) or
expense which such Lender may sustain or incur as a consequence of (a) default
by the Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrower
in making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this
38
Section 2.20, showing in reasonable detail the calculation thereof, submitted
to the Borrower by any Lender shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder for a period of
nine months thereafter.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.18 or
2.19(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.21 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19 or (b)
defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred and
be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.21 so as to
eliminate the continued need for payment of amounts owing pursuant to Section
2.18 or 2.19, (iv) the Borrower shall repay (or the replacement financial
institution shall purchase, at par) all Loans and other amounts (including
accrued interest and fees) owing to such replaced Lender on or prior to the
date of replacement, (v) the Borrower shall be liable to such replaced Lender
under Section 2.20 if any Eurodollar Loan owing to such replaced Lender shall
be prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.6, (viii) until such time as such replacement
shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.18 or 2.19, as the case may be, and (ix) any
such replacement shall not be deemed to be a waiver of any rights which the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters
of credit ("Letters of Credit") for the account of the Borrower on any Business
Day during the Revolving Credit Commitment Period in such form as may be
approved from time to time by such Issuing Lender; provided that no Issuing
Lender shall have any obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Scheduled Revolving Credit Termination Date,
provided that any Letter of Credit with a one-year term may provide
39
for the renewal thereof for additional one-year periods (which shall in no
event extend beyond the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit
by delivering to such Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of such Issuing
Lender, and such other certificates, documents and other papers and information
as such Issuing Lender may reasonably request. Upon receipt of any
Application, the relevant Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
any Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the relevant Issuing Lender and the Borrower.
The relevant Issuing Lender shall furnish a copy of such Letter of Credit to
the Borrower promptly following the issuance thereof. The relevant Issuing
Lender shall promptly furnish to the Administrative Agent notice of the
issuance of each Letter of Credit (including the amount thereof). The
Administrative Agent will furnish to the Revolving Credit Lenders (a) prompt
notice of the issuance of each standby Letter of Credit and (b) a monthly
report setting forth for the relevant month the total aggregate daily amount
available to be drawn under commercial Letters of Credit that were outstanding
during such month.
3.3 Commissions, Fees and Other Charges. (a) The Borrower
will pay to the Administrative Agent, for the account of each Revolving Credit
Lender, a commission on all outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Credit Facility minus the fronting fee referred to below,
shared ratably among the Revolving Credit Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to each Issuing Lender for its own account a fronting fee of
1/4 of 1% per annum in respect of each Letter of Credit issued by such Issuing
Lender, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the relevant Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit.
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3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the relevant Issuing Lender, on the terms and conditions hereinafter stated,
for such L/C Participant's own account and risk an undivided interest equal to
such L/C Participant's Revolving Credit Percentage in such Issuing Lender's
obligations and rights under each Letter of Credit issued by such Issuing
Lender and the amount of each draft paid by such Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with each Issuing
Lender that, if a draft is paid under any Letter of Credit issued by such
Issuing Lender for which such Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to such Issuing Lender upon demand an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or any
part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit
is paid to such Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to such Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, such
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Credit Facility. A
certificate of the relevant Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 3.4(a), such
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by such Issuing Lender), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to such Issuing Lender the
portion thereof previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment. Each such
payment shall be made to such Issuing Lender in lawful money of the United
States of America and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts
41
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in Section 2.14(c). Each drawing under
any Letter of Credit shall (unless an event of the type described in clause (i)
or (ii) of Section 8(f) shall have occurred and be continuing with respect to
the Borrower, in which case the procedures specified in Section 3.4 for funding
by L/C Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of ABR Loans (or,
at the option of the Administrative Agent and the Swing Line Lender in their
sole discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans) in
the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the date of payment of the relevant draft.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Issuing Lender
(except to the extent resulting from the gross negligence or willful misconduct
of such Issuing Lender), any beneficiary of a Letter of Credit or any other
Person. The Borrower also agrees with each Issuing Lender that, subject to the
last sentence of this Section 3.6, no Issuing Lender shall be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors,
omissions or delays in transmission found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Issuing Lender that issued such Letter of Credit.
The Borrower agrees that any action taken or omitted by any Issuing Lender
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of any Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the relevant Issuing Lender
shall promptly notify the Borrower of the date and amount thereof. The
responsibility of each Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit issued by it shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
42
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at September 30, 1996 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has
been prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Acquisitions, (ii) the Loans to be made and the
Senior Subordinated Notes to be issued on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet presents fairly on a pro forma
basis the financial position of the Borrower and its consolidated Subsidiaries
as at September 30, 1996 and is based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made,
assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of the AHP Food
Business as at December 31, 1994 and December 31, 1995, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Arthur Andersen LLP, present fairly the consolidated financial condition of the
AHP Food Business as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The audited consolidated balance sheet of Heritage and its consolidated
Subsidiaries as at December 31, 1995, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from Coopers & Lybrand L.L.P.,
present fairly the consolidated financial condition of Heritage and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the AHP Food Business as at
September 30, 1996, and the related unaudited consolidated statements of income
and cash flows for the nine-month period ended on such date, present fairly the
consolidated financial condition of the AHP Food Business as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the nine-month period then ended (subject to normal year-end audit
adjustments). The unaudited consolidated balance sheets of Heritage and its
consolidated Subsidiaries as at September 30, 1996, and the related unaudited
consolidated statements of income and cash flows for the nine-month period
ended on such date, present fairly the consolidated financial condition of
Heritage and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the nine-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
relevant firm of accountants and disclosed therein). The most recent balance
sheets referred to above reflect, as required by GAAP, with respect to the AHP
Food Business or Heritage, as the case may be, any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, and any
long-term leases and unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, in each case as of
the date of such
43
balance sheets. During the period from September 30, 1996 to and including the
date hereof there has been no sale, transfer or other disposition by the AHP
Food Business or Heritage of any material part of its business or Property
(other than in connection with the Acquisitions).
4.2 No Change. Since December 31, 1995 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and each of its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has the corporate power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow and obtain other extensions of credit
hereunder. Each Loan Party has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to
which it is a party and, in the case of the Borrower, to authorize the
borrowings and other extensions of credit on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Acquisitions and the borrowings and other extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made and
are in full force and effect, (ii) consents under immaterial Contractual
Obligations relating to limitations on the assignability thereof and (iii) the
filings referred to in Section 4.19(b). Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of the Borrower
or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
44
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and
each of its Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other property, and none of such property is subject to
any Lien except as permitted by Section 7.3.
4.9 Intellectual Property. Each of the Borrower and each of
its Subsidiaries owns (subject only to the recording of conveyance and
assignment documentation in the U.S. Patent and Trademark Office and other
applicable jurisdictions, which recording shall be completed promptly after the
Closing Date), or is licensed to use, all trademarks, tradenames, service
marks, copyrights, technology, know-how and processes ("Intellectual Property")
necessary for the conduct of its business as currently conducted. Except as,
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, (a) no claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity of any
Intellectual Property (nor does the Borrower know of any valid basis for any
such claim) and (b) the use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of, and no Intellectual Property
of the Borrower or any of its Subsidiaries is being infringed upon by, any
Person.
4.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal and all material state
and other material tax returns which are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any taxes, fees or other charges the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); and no tax Lien has been
filed, and, to the knowledge of the Borrower, no material claim is being
asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No Letters of Credit and no part
of the proceeds of any Loans will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1 referred to in said Regulation G or Regulation U, as
the case may be.
45
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked
by and payment made to employees of the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of the Borrower or the
relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that could reasonably be expected to have a Material Adverse
Effect, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any liability under ERISA that could reasonably be expected
to have a Material Adverse Effect if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan
Party 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 subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the date hereof.
4.16 Use of Proceeds. The proceeds of the Term Loans shall
be used to finance a portion of the Acquisitions and to pay related fees and
expenses. The proceeds of the Revolving Credit Loans and the Swing Line Loans
shall be used for general corporate purposes. The Letters of Credit shall be
used for general corporate purposes.
46
4.17 Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated
by the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances which (i) constitute or constituted a violation of, or
(ii) could give rise to liability under, any Environmental Law;
(b) the Properties and all operations at the Properties are
in compliance, and have in the last five years been in compliance,
with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental
Law with respect to the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business");
(c) neither the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws;
(d) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the Borrower
have knowledge or reason to believe that any such notice will be
received or is being threatened;
(e) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in
a manner or to a location which could give rise to liability under,
any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law;
(f) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business; and
(g) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
47
4.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders, or any of them,
by or on behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished (or,
in the case of the Confidential Information Memorandum, as of the Closing
Date), any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information and other
estimates and opinions contained in the materials referenced above are based
upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. As of the date hereof, the representations and
warranties of the Buyer and the Merger Sub and, to the best knowledge of the
Borrower, the Sellers and AH Food Co. in the Acquisition Agreement are true and
correct in all material respects. There is no fact known to any Loan Party
that could reasonably be expected to have a Material Adverse Effect that has
not been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 4.19(a), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person subject, except in the case of such
Pledged Stock, to Liens permitted by paragraphs (a) through (f) of Section 7.3.
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each Mortgage shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the Mortgaged
Properties and the proceeds thereof, as security for the Obligations (as
defined in the relevant Mortgage), in each case prior and superior in right to
any other Person, subject to Liens permitted by paragraphs (a) through (f) of
Section 7.3.
4.20 Solvency. Each Loan Party is, and after giving effect
to the Acquisitions and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be, Solvent.
48
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the
Guarantee and Collateral Agreement constitute "Guarantor Senior Indebtedness"
of such Subsidiary Guarantor under and as defined in the Senior Subordinated
Note Indenture.
4.22 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
Borrower and each Subsidiary Guarantor, (iii) each of the Mortgages,
executed and delivered by a duly authorized officer of each party
thereto, and (iv) for the account of each relevant Lender, Notes
conforming to the requirements hereof and executed and delivered by a
duly authorized officer of the Borrower.
(b) Acquisitions, HM Equity, Senior Subordinated Notes, etc.
The following transactions shall have been consummated, in each case
on terms and conditions reasonably satisfactory to the Lenders:
(i) Merger Sub shall have merged (the "Merger") with
and into AH Food Co. (with AH Food Co. being the surviving
corporation); AH Food Co. shall have changed its name to
International Home Foods, Inc.; at the time of the Merger and
after giving effect to certain related transactions referred
to below, the Borrower and its Subsidiaries shall conduct a
business (the "AHP Food Business") that manufactures, markets
and sells specialty foods products and, immediately prior to
such transactions, was conducted by AH Food Co., the Sellers
and their affiliates; certain Subsidiaries and other assets of
the Sellers and their affiliates included in the AHP Food
Business shall either have been transferred to AH Food Co.
immediately prior to the Merger or purchased by the Borrower
(any such purchase, a "Subsequent Purchase") immediately after
the Merger, as contemplated by the Acquisition Agreement; in
conjunction with the Merger, the Buyer shall have paid
consideration to the Sellers, the Borrower shall have redeemed
shares of common stock of the Borrower held by the Sellers and
the Borrower shall have paid to the Sellers the purchase price
for any Subsequent Purchase, with the aggregate amount
expended (the "AHP Purchase Price") by the Buyer and the
Borrower in connection with
49
such transactions, together with the value of the shares of
common stock of the Borrower held by the Sellers after giving
effect to the Merger (valued on the same basis as the HM
Equity) being equal to not more than $1,275,000,000, subject
to adjustment as provided in the Acquisition Agreement; and
after giving effect to the foregoing transactions, 80% of the
common stock of the Borrower shall be owned by the Buyer and
20% of the common stock of the Borrower shall be owned by the
Sellers (all of the foregoing transactions, collectively, the
"AHP Acquisition");
(ii) the Borrower shall have acquired (the "Heritage
Acquisition") at least 75% of the capital stock of Heritage
for a purchase price (the "Heritage Purchase Price")
(including repayment of assumed Indebtedness of Heritage) of
not more than $70,000,000 and all Indebtedness of Heritage
outstanding immediately prior to the Heritage Acquisition
shall have been paid in full;
(iii) (x) the Buyer shall have received at least
$264,000,000 from the proceeds of equity (the "HM Equity")
issued by the Buyer to funds managed by Hicks Muse and other
investors satisfactory to the Lenders, and such proceeds shall
have been applied to finance a portion of the AHP Purchase
Price and the Heritage Purchase Price; and (y) the value of
the shares of common stock of the Borrower held by the Sellers
after giving effect to the AHP Acquisition (valued at a price
per share by reference to the HM Equity) shall be at least
$66,000,000; provided, that a portion of the amount referred
to in clause (x) above may be funded with the proceeds of
unsecured loans to the Buyer; and
(iv) the Borrower shall have received at least
$400,000,000 in gross cash proceeds from the issuance of the
Senior Subordinated Notes.
(c) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii)
audited consolidated financial statements of the AHP Food Business for
the 1994 and 1995 fiscal years and audited financial statements of
Heritage for the 1995 fiscal year and (iii) unaudited interim
consolidated financial statements of the AHP Food Business and
Heritage for each fiscal month and quarterly period ended subsequent
to the date of the latest applicable financial statements delivered
pursuant to clause (ii) of this paragraph as to which such financial
statements are available, and such financial statements shall not, in
the reasonable judgment of the Lenders, reflect any material adverse
change in the consolidated financial condition of the AHP Food
Business or Heritage, as the case may be, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum
(d) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Borrower or
its Subsidiaries except for liens permitted by Section 7.3.
50
(e) Environmental Audit. The Administrative Agent shall have
received an environmental audit with respect to the real properties of
the Borrower and its Subsidiaries specified by the Administrative
Agent.
(f) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Acquisitions and the financing thereof shall not
exceed $55,000,000.
(g) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Vinson & Elkins,
counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit F; and
(ii) the legal opinion of local counsel in each
of California, Pennsylvania and Ontario.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(i) Pledged Stock; Stock Powers. The Administrative Agent
shall have received the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the
pledgor thereof.
(j) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien
on the Collateral described therein, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted
by Section 7.3), shall be in proper form for filing, registration or
recordation.
(k) Mortgages, etc. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed
and delivered by a duly authorized officer of each party thereto.
(ii) If reasonably requested by the Administrative Agent, the
Administrative Agent shall have received, and the title insurance
company issuing the policy referred to in Section 5.1(m)(iii) (the
"Title Insurance Company") shall have received, maps or plats of an
as-built survey of the
51
sites of the Mortgaged Properties certified to the Administrative
Agent and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Administrative Agent and the
Title Insurance Company by an independent professional licensed land
surveyor reasonably satisfactory to the Administrative Agent and the
Title Insurance Company, which maps or plats and the surveys on
which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established
and adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on
such maps, plats or surveys the following: (A) the locations on such
sites of all the buildings, structures and other improvements and
the established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the building
structures and improvements on the sites; (F) if the site is
described as being on a filed map, a legend relating the survey
to said map; and (G) the flood zone designations, if any, in which the
Mortgaged Properties are located; provided, that any of the foregoing
items so requested by the Administrative Agent may be delivered
after the Closing Date subject to compliance with Section 6.10(e).
(iii) The Administrative Agent shall have received in respect
of each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder for such insurance. Each
such policy shall (A) be in an amount reasonably satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that
the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (D) name the Administrative Agent for the
benefit of the Lenders as the insured thereunder; (E) be in the form
of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies) to the extent available in the applicable
jurisdictions; (F) contain such endorsements and affirmative coverage
as the Administrative Agent may reasonably request to the extent
available in the applicable jurisdictions; and (G) be issued by title
companies satisfactory to the Administrative Agent (including any such
title companies acting as co-insurers or reinsurers, at the option of
the Administrative Agent). The Administrative Agent shall have
received evidence satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all
related expenses, if any, have been paid.
(iv) If reasonably requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood
insurance which (1) covers any parcel of improved real property which
is encumbered by any Mortgage, (2) is written in an amount not less
than the outstanding principal amount of the indebtedness secured by
such Mortgage which is reasonably allocable to such real property or
the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of
1968, whichever is less, and (3) has a term ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board; provided,
that any of the foregoing items so requested by
52
the Administrative Agent may be delivered after the Closing Date
subject to compliance with Section 6.10(e).
(v) The Administrative Agent shall have received a copy of
all recorded documents referred to, or listed as exceptions to title,
in the title policy or policies referred to in Section 5.1(k)(iii) and
a copy of all other material documents affecting the Mortgaged
Properties.
(l) Solvency Opinion. The Administrative Agent shall have
received a solvency opinion from Corporate Valuation Advisors, Inc.
(m) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of the Guarantee
and Collateral Agreement and the Mortgages.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Revolving Credit Facility. In the case of any extension
of credit under the Revolving Credit Facility, after giving effect
thereto, the sum of the Total Revolving Extensions of Credit and the
Canadian Subsidiary Equivalent Outstandings shall not exceed
$100,000,000.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative
Agent (with sufficient copies for each Lender, which shall in turn be promptly
distributed by the Administrative Agent to the Lenders):
(a) as soon as available, but in any event within 95 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements
53
of income and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 30
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender, which shall in
turn be promptly distributed by the Administrative Agent to the Lenders) or, in
the case of clause (f), to the relevant Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate of a Responsible
Officer stating that, to the best of such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information
necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein
as of the
54
last day of the relevant fiscal quarter or fiscal year and (y) to the
extent not previously disclosed to the Administrative Agent, a listing
of any state or province within the United States or Canada where any
Loan Party keeps inventory or equipment and of any Intellectual
Property arising under the laws of the United States or Canada (or any
jurisdiction therein) acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial
information may differ from the projected results set forth therein by
a material amount;
(d) within 45 days after the end of each fiscal quarter of
the Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower 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, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity
securities and within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc.
(a) (i) Continue to engage in business of the same general type as now
conducted by it, (ii) preserve, renew and keep in full force and effect its
corporate existence and (iii) take all reasonable action to maintain all
rights, privileges and
55
franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 7.4 and except, in the
case of clause (iii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
6.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
(b) upon reasonable prior notice and at any reasonable time, permit
representatives of the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and, if reasonably requested, make copies of
its contracts, books and records and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants; provided that the
Administrative Agent or such Lender shall notify the Borrower prior to any
contact with such accountants and give the Borrower the opportunity to
participate in such discussions.
6.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority and which has a reasonable likelihood of being adversely
determined, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $10,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the
taking of any
56
other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) Except as could not reasonably
be expected to have a Material Adverse Effect, comply with, and ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply with and maintain, and ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.
6.9 Interest Rate Protection. In the case of the Borrower,
within 90 days after the Closing Date, enter into Interest Rate Protection
Agreements to the extent necessary to provide that at least 50% of the
aggregate principal amount of the Senior Subordinated Notes and the Term Loans
is subject to either a fixed interest rate or interest rate protection for a
period of not less than one year (provided, that in the event that the term
thereof shall be less than two years, such Interest Rate Protection Agreements
shall be extended or replaced no later than the expiration of such term, with
the term of such extended or replacement Interest Rate Protection Agreements
ending no earlier than the second anniversary of the date on which the original
Interest Rate Protection Agreements were entered into), which Interest Rate
Protection Agreements shall in each case have terms and conditions reasonably
satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (x) any Property described in paragraph (b), (c) or
(d) below and (y) any Property subject to a Lien expressly permitted by Section
7.3(g)) as to which the Administrative Agent, for the benefit of the Lenders,
does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent deems necessary or
advisable in order to grant to the Administrative Agent, for the benefit of the
Lenders, a security interest in such Property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in such Property,
including without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the
57
Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Administrative Agent.
(b) With respect to any fee interest in any real estate
which, together with any related parcel of real estate not yet subject to a
Mortgage, has a value (determined inclusive of any improvements thereof) of at
least $5,000,000 acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any such real estate subject to a Lien expressly
permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
mortgage or deed of trust (subject only to Liens permitted by Section 7.3) in
favor of the Administrative Agent, for the benefit of the Lenders, covering
such real estate, in form and substance reasonably satisfactory to the
Administrative Agent, (ii) if reasonably requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering
such real estate in an amount at least equal to the purchase price of such real
estate (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date (which,
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be an Excluded Foreign Subsidiary) by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable in order to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary which is owned by the
Borrower or any of its Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Lenders a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary, including, without limitation, the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Administrative Agent, and (iv) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable in order to grant to the Administrative
Agent, for the benefit of the
58
Lenders, a perfected first priority security interest in the Capital Stock of
such new Subsidiary which is owned by the Borrower or any of its Subsidiaries
(provided that in no event shall more than 65% of the total outstanding Capital
Stock of any such new Subsidiary be required to be so pledged), (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be and
(iii) if reasonably requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(e) Within 60 days after the Closing Date, deliver any items
requested by the Administrative Agent pursuant to Sections 5.1(k)(ii) and
5.1(k)(iv) and not delivered on the Closing Date, together with, in the case of
surveys, such endorsements to the title insurance policies referred to in
Section 5.1(k)(iii) relating to the matters disclosed in such surveys as may be
reasonably requested by the Administrative Agent. In the case of the Borrower,
within 30 days after the Closing Date, acquire that portion of the capital
stock of Heritage not acquired by the Borrower on the Closing Date.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any Test Period ending with any fiscal
quarter set forth below to exceed the ratio set forth below opposite such
fiscal quarter:
[Download Table]
Fiscal Quarter Ending Consolidated Leverage Ratio
--------------------- ---------------------------
3/31/97-12/31/97 6.50 to 1.0
3/31/98-6/30/98 6.40 to 1.0
9/30/98 6.20 to 1.0
12/31/98 6.10 to 1.0
3/31/99 5.95 to 1.0
6/30/99 5.90 to 1.0
9/30/99 5.80 to 1.0
12/31/99 5.70 to 1.0
3/31/00 5.60 to 1.0
6/30/00 5.50 to 1.0
9/30/00 5.40 to 1.0
12/31/00 5.30 to 1.0
3/31/01-6/30/01 5.00 to 1.0
59
[Download Table]
Fiscal Quarter Ending Consolidated Leverage Ratio
--------------------- ---------------------------
9/30/01-12/31/01 4.90 to 1.0
3/31/02-6/30/02 4.60 to 1.0
9/30/02-12/31/02 4.40 to 1.0
3/31/03 4.30 to 1.0
6/30/03 4.20 to 1.0
9/30/03 4.10 to 1.0
12/31/03 and thereafter 4.00 to 1.0
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any Test Period ending with any fiscal
quarter set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
[Download Table]
Fiscal Quarter Consolidated Interest
Ending Coverage Ratio
-------------- ---------------------
3/31/97-3/31/98 1.50 to 1.0
6/30/98-12/31/98 1.55 to 1.0
3/31/99-12/31/99 1.60 to 1.0
3/31/00-6/30/00 1.70 to 1.0
9/30/00-12/31/00 1.75 to 1.0
3/31/01-6/30/01 1.80 to 1.0
9/30/01-12/31/01 1.90 to 1.0
3/31/02-6/30/02 2.00 to 1.0
9/30/02-12/31/02 2.10 to 1.0
3/31/03-9/30/03 2.20 to 1.0
12/31/03 and 2.30 to 1.0
thereafter
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any Test Period ending with any
fiscal quarter set forth below to be less than the ratio set forth below
opposite such fiscal quarter:
[Download Table]
Fiscal Quarter Consolidated Interest
Ending Coverage Ratio
-------------- ---------------------
3/31/97-12/31/00 1.00 to 1.0
3/31/01-12/31/03 1.05 to 1.0
3/31/04 and thereafter 1.10 to 1.0
60
Notwithstanding anything to the contrary herein, (i) for the purposes of
determining the Consolidated Leverage Ratio, the Consolidated Interest Coverage
Ratio and the Consolidated Fixed Charge Coverage Ratio pursuant to this Section
7.1 for the Test Periods ending March 31, 1997, June 30, 1997 and September 30,
1997, (i) Consolidated EBITDA for the relevant Test Period shall be deemed to
equal actual Consolidated EBITDA for such Test Period plus $151,500,000,
$102,600,000 and $47,100,000, respectively; (ii) Consolidated Interest Expense
for the relevant Test Period shall be deemed to equal actual Consolidated
Interest Expense for such Test Period multiplied by 4, 2 and 4/3, respectively,
(iii) Consolidated Tax Expense for the relevant Test Period shall be deemed to
equal actual Consolidated Tax Expense for such Test Period multiplied by 4, 2
and 4/3, respectively, (iv) scheduled payments payable during the relevant Test
Period on account of principal of Indebtedness shall be appropriately
annualized (e.g., the aggregate amount of the principal installments of the
Term Loans due on March 31, 1997 shall be multiplied by 2 for the purposes of
determining the Consolidated Fixed Charge Coverage Ratio for the Test Periods
ending March 31, 1997 and June 30, 1997), and (v) Capital Expenditures for the
relevant Test Period shall be deemed to equal actual Capital Expenditures for
such Test Period plus $11,000,000, $7,400,000 and $3,700,000, respectively.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist (in each case, to "Incur") any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) purchase money Indebtedness and Indebtedness secured by
Liens permitted by Section 7.3(g), provided, that the aggregate amount
of Indebtedness incurred pursuant to this Section 7.2(c) shall not
exceed $25,000,000 at any one time outstanding;
(d) Capital Lease Obligations, provided, that the aggregate
principal amount of Capital Lease Obligations incurred pursuant to
this Section 7.2(d) in any fiscal year of the Borrower, when added to
the aggregate amount of other Capital Expenditures made during such
fiscal year pursuant to Section 7.7(a), shall not exceed the amount
permitted to be expended during such fiscal year pursuant to Section
7.7(a);
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof);
(f) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Wholly Owned
Subsidiary Guarantor;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$400,000,000 and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness;
61
(h) Indebtedness of any Canadian Subsidiary incurred for
working capital purposes in the ordinary course of business, provided
that (i) the U.S.$ equivalent (determined in good faith by the
Borrower) of the aggregate outstanding principal amount thereof (the
"Canadian Subsidiary Equivalent Outstandings") shall not exceed
$10,000,000 at any one time and (ii) on the date of any incurrence
thereof, after giving effect thereto, the sum of the Canadian
Subsidiary Equivalent Outstandings and the Total Revolving Extensions
of Credit shall not exceed $100,000,000;
(i) at any time after the Revolving Credit Commitments shall
have been terminated (other than pursuant to Section 8), Indebtedness
in respect of unsecured revolving lines of credit in an aggregate
outstanding principal amount not exceeding $60,000,000 at any one
time; and
(j) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and
all Subsidiaries) not to exceed $25,000,000 at any one time
outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP (or, in the case of Foreign Subsidiaries, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, insurance contracts, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions, covenants, minor
exceptions to title and other similar encumbrances (i) incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of
its Subsidiaries or (ii) which are set forth in the "marked up"
commitments for title insurance delivered to the Administrative Agent
on the Closing Date;
62
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(e), provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is
not increased;
(g) (i) Liens securing Indebtedness of the Borrower or any of
its Subsidiaries incurred to finance the acquisition of fixed or
capital assets (provided that (x) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or
capital assets, (y) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (z)
the amount of Indebtedness secured thereby is not increased) and (ii)
Liens existing on any property or asset at the time of acquisition
thereof by the Borrower or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof
at the time such Person becomes a Subsidiary (provided that (x) such
Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be,
(y) such Lien shall not apply to any other property or assets of the
Borrower or any of its Subsidiaries and (z) such Lien shall secure
only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case
may be);
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased;
(j) any obligations or duties affecting any of the Property
of the Borrower or its Subsidiaries to any municipality or public
authority with respect to any franchise, grant, license or permit
which do not materially impair the use of such Property for the
purposes for which it is held;
(k) with respect to Property located in Canada, reservations,
limitations, provisos and conditions in any original grant from the
Crown or any freehold lessor of any Property of the Borrower or any of
its Subsidiaries;
(l) Liens encumbering inventory and accounts receivable of a
Canadian Subsidiary securing Indebtedness of such Canadian Subsidiary
incurred pursuant to Section 7.2(h);
(m) Liens imposed by operation of law with respect to any
judgments or orders not constituting an Event of Default; and
(n) Liens not otherwise permitted by this Section 7.3 so long
as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Borrower and all Subsidiaries)
$5,000,000 at any one time.
7.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose
63
of all or substantially all of its property, business or assets, or make any
material change in its present method of conducting business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving
corporation); and
(b) any Subsidiary of the Borrower may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly Owned
Subsidiary Guarantor.
7.5 Limitation on Sale of Assets. Dispose of any of its
property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the Disposition of inventory in the ordinary course of
business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor;
(e) transfers resulting from any casualty or condemnation of
property or assets;
(f) licenses or sublicenses of intellectual property and
general intangibles and licenses, leases or subleases of other
property in the ordinary course of business and which do not
materially interfere with the business of the Borrower and its
Subsidiaries;
(g) any consignment arrangements or similar arrangements for
the sale of assets in the ordinary course of business;
(h) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection
with the compromise or collection thereof; and
(i) the Disposition of other assets having a fair market
value not to exceed $25,000,000 in the aggregate for any fiscal year
of the Borrower, provided, that (i) except in the case of an Asset
Swap, at least 75% of the consideration received by the Borrower and
its Subsidiaries in connection with each such Disposition shall be in
the form of cash or Cash Equivalents and (ii) the aggregate fair
market value of Property Disposed of in connection with Asset Swaps
during any fiscal year of the Borrower, when added to the aggregate
Net Cash Proceeds of Asset Sales
64
excluded from the requirements of Section 2.11(b) during such fiscal
year pursuant to a Reinvestment Notice, shall not exceed $20,000,000.
7.6 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or any Subsidiary or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(b) Permitted Issuances may be made; and
(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may (i) purchase the
Borrower's common stock or common stock options from present or former
officers or employees of the Borrower or any Subsidiary upon the
death, disability or termination of employment of such officer or
employee, provided, that the aggregate amount of payments under this
clause (i) during the term of this Agreement shall not exceed
$15,000,000 net of any proceeds received by the Borrower in connection
with resales of any common stock or common stock options so purchased
and (ii) pay management fees to Hicks Muse and its Affiliates
expressly permitted by Section 7.10.
7.7 Limitation on Capital Expenditures. Make or commit to
make (by way of the acquisition of securities of a Person or otherwise) any
Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $35,000,000 in
any fiscal year of the Borrower ending on or prior to December 31, 1998 or
$40,000,000 in any subsequent fiscal year; provided, that (i) up to $15,000,000
of any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (ii) Capital Expenditures made pursuant to this
clause (a) during any fiscal year shall be deemed made, first, in respect of
amounts carried over from the prior fiscal year pursuant to subclause (i) above
and, second, in respect of amounts permitted for such fiscal year as provided
above and (b) Capital Expenditures made pursuant to an Asset Swap or with the
proceeds of any Reinvestment Deferred Amount, any Unapplied Excess Cash Flow or
any Contributed Equity.
7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of
business;
65
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$5,000,000 at any one time outstanding;
(e) the Acquisitions;
(f) investments by the Borrower or any of its Subsidiaries in
the Borrower or any Wholly Owned Subsidiary Guarantor;
(g) loans, advances or investments in existence on the
Closing Date and listed on Schedule 7.8(g), and extensions, renewals,
modifications or restatements or replacements thereof, provided that
no such extension, renewal, modification or restatement shall (i)
increase the amount of the original loan, advance or investment, or
(ii) adversely affect the interests of the Lenders with respect to
such original loan, advance or investment or the interests of the
Lenders under this Agreement or any other Loan Document in any
respect;
(h) investments made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount or
any Unapplied Excess Cash Flow;
(i) investments made by the Borrower or any of its
Subsidiaries pursuant to an Asset Swap or with the proceeds of any
Contributed Equity, so long as, after giving pro forma effect thereto
(as certified to the Administrative Agent by a Responsible Officer
prior to consummation of such investment), no Default or Event of
Default shall have occurred and be continuing (including, without
limitation, pursuant to Section 7.1); and
(j) Investments constituting Capital Expenditures permitted
by Section 7.7;
(k) promissory notes and other similar non-cash consideration
received by the Borrower and its Subsidiaries in connection with the
Dispositions permitted by Section 7.5;
(l) Investments consisting of Interest Rate Protection
Agreements and commodity and currency hedging arrangements entered
into in the ordinary course of business of the Borrower or any of its
Subsidiaries and not for purposes of speculation;
(m) Investments (including debt obligations and Capital
Stock) received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business; and
66
(n) in addition to investments otherwise expressly permitted
by this Section 7.8, investments by the Borrower or any of its
Subsidiaries in an aggregate amount (valued at cost) not to exceed
$30,000,000 at any one time outstanding, so long as, after giving pro
forma effect thereto (as certified to the Administrative Agent by a
Responsible Officer prior to consummation of such investment, in the
case of any single investment in excess of $15,000,000), no Default or
Event of Default shall have occurred and be continuing (including,
without limitation, pursuant to Section 7.1).
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with
respect to the Senior Subordinated Notes, (b) amend, modify, waive or otherwise
change, or consent or agree to any amendment, modification, waiver or other
change to, any of the terms of the Senior Subordinated Notes or the Senior
Subordinated Note Indenture (other than any such amendment, modification,
waiver or other change which (i) would extend the maturity or reduce the amount
of any payment of principal thereof or which would reduce the rate or extend
the date for payment of interest thereon and (ii) does not involve the payment
of a consent fee) or (c) designate any Indebtedness as "Designated Senior
Indebtedness" for the purposes of the Senior Subordinated Note Indenture.
7.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Borrower or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of the Borrower or such Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate. Notwithstanding
the foregoing, the Borrower and its Subsidiaries may pay to Hicks Muse and its
Affiliates fees and expenses, as set forth on Schedule 7.10, pursuant to a
monitoring and oversight agreement and a financial advisory agreement, in each
case approved by the board of directors of the Borrower.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change
the Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into with
any Person, or suffer to exist, any agreement, other than (a) this Agreement
and the other Loan Documents, (b) the Senior Subordinated Note Indenture and
(c) in the case of clause (i) below only, any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby), which prohibits or limits the ability of the Borrower or any
of its Subsidiaries to (i) create, incur, assume or suffer to exist any
67
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, or (ii) pay dividends or make other distributions, or pay any
Indebtedness owed, to the Borrower or any of its Subsidiaries.
7.14 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are reasonably related thereto.
7.15 Limitation on Amendments to Acquisition Documents. (a)
Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Agreement or any other document
delivered by the Sellers or any of their affiliates in connection therewith
such that after giving effect thereto such indemnities shall be materially less
favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Agreement or any such other documents except to
the extent that any such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 6.4(a) (with respect to the Borrower only), Section 6.7(a) or
Section 7 of this Agreement or Section 5.5 or 5.7(b) of the Guarantee
and Collateral Agreement or (ii) an "Event of Default" under and as
defined in any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice from the Administrative Agent or the
Required Lenders; or
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(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of or interest on any
Indebtedness (including, without limitation, any Guarantee Obligation,
but excluding the Loans, Reimbursement Obligations and Guarantee
Obligations pursuant to the Guarantee and Collateral Agreement) beyond
the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described
in clause (i) or (ii) of this paragraph (e) shall not at any time
constitute an Event of Default under this Agreement unless, at such
time, one or more defaults, events or conditions (without duplication
as to the same item of Indebtedness) of the type described in clauses
(i) and (ii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $10,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower or any
of its Subsidiaries shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the
entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
of its Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or
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proceedings shall commence to have a trustee appointed (or a trustee
shall be appointed) to administer, or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $10,000,000
or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) Any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent at the
direction of the Required Lenders or all Lenders (to the extent
required by Section 10.1) or as otherwise permitted under this
Agreement or the other Loan Documents) or shall be declared null and
void (and, if such invalidity is such so as to be amenable to cure
without materially disadvantaging the position of the Administrative
Agent and the Lenders thereunder, the relevant Loan Party shall have
failed to cure such invalidity within 30 days after notice from the
Administrative Agent or such shorter time period as is specified by
the Administrative Agent in such notice and is reasonable in the
circumstances), or the validity or enforceability thereof shall be
contested by any Loan Party, or any of the Liens intended to be
created by any Security Document shall cease to be or shall not be a
valid and perfected Lien having the priority contemplated thereby
(and, if such invalidity is such so as to be amenable to cure without
materially disadvantaging the position of the Administrative Agent and
the Lenders as secured parties thereunder, the relevant Loan Party
shall have failed to cure such invalidity within 30 days after notice
from the Administrative Agent or such shorter time period as specified
by the Administrative Agent in such notice and is reasonable in the
circumstances); or
(j) (i) The Permitted Investors shall cease to have the
power, directly or indirectly, to vote or direct the voting of
securities having a majority of the ordinary voting power for the
election of directors of the Borrower, provided that the occurrence of
the foregoing event shall not be deemed an Event of Default if (A) at
any time prior to the consummation of an Initial Public Offering, (1)
the Permitted Investors otherwise have the right to designate (and do
so designate) a majority of the board of directors of the Borrower or
(2) the Permitted Investors and their employees, directors and
officers (the "HM Group") own of record and beneficially an amount of
common stock of the Borrower equal to at least 50% of the amount of
common stock of the Borrower (adjusted for stock splits, stock
dividends and other similar events on an equitable basis) owned by the
HM Group of record and beneficially as of the Closing Date and such
ownership by
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the HM Group represents the largest single block of voting securities
of the Borrower held by any "person" or "group" for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or (B) at any time after the consummation of an
Initial Public Offering, (1) no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), excluding the
Permitted Investors, shall become the "beneficial owner" (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than the greater of (x) 15% of the then
outstanding voting stock of the Borrower and (y) the percentage of the
then outstanding voting stock of the Borrower owned by the Permitted
Investors and (2) the board of directors of the Borrower shall consist
of a majority of Continuing Directors; or (ii) a Specified Change of
Control shall occur; or
(k) The Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors under the
Guarantee and Collateral Agreement, as the case may be, as provided in
the Senior Subordinated Note Indenture, or any Loan Party, any
Affiliate of any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Loan Documents. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the balance,
if any,
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in such cash collateral account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto). Except as otherwise
expressly provided above in this Section 8, the Borrower waives presentment,
demand, protest or other notice of any kind.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agents under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or
72
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any
73
Loan Party or any affiliate of a Loan Party which may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Revolving Credit Percentages, Tranche A Term Loan Percentages,
Tranche B Term Loan Percentages and Tranche C Term Loan Percentages in effect
on the date on which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in
this Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative 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 Administrative Agent under this Agreement and the
other Loan Documents.
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9.10 Authorization to Release Liens. The Administrative
Agent is hereby irrevocably authorized by each of the Lenders to release any
Lien covering any Property of the Borrower or any of its Subsidiaries that is
the subject of a Disposition which is permitted by this Agreement or which has
been consented to in accordance with Section 10.1.
9.11 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Documents may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) forgive
the principal amount or extend the final scheduled date of maturity of any
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest, fee or letter of credit
commission payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Revolving Credit Commitment, in each case without the consent of each Lender
directly affected thereby; (ii) amend, modify or waive any provision of this
Section 10.1 or reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the written consent of
all Lenders; (iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit Facility set forth in Section
5.2 without the written consent of the Majority Revolving Credit Facility
Lenders; (iv) change the allocation of payments among the Term Loan Facilities
specified in Section 2.17(b) or the allocation of payments between the Term
Loan Facilities and the Revolving Credit Facility pursuant to Section 2.11(d),
in each case without the consent of the Majority Facility Lenders in respect of
each Facility adversely affected thereby; (v) reduce the percentage specified
in the definition of Majority Facility Lenders without the written consent of
all Lenders under each affected Facility; (vi) amend, modify or waive any
provision of Section 9 without the written consent of the Administrative Agent;
(vii) amend, modify or waive any provision of Section 2.6 or 2.7 without the
written consent of the Swing Line Lender; or (viii) amend, modify or waive any
provision of Section 3 without the written consent of each affected Issuing
Lender. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
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Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: International Home Foods, Inc.
Five Giralda Farms
Madison, New Jersey 07940
Attention: Kenneth J. Martin
Telecopy: 201-660-5934
Attention: Lynn Misericordia
Telecopy: 201-660-7171
with copies to: Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Telecopy: 214-740-7313
Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas, 25th Floor
New York, New York 10019
Attention: Alan B. Menkes
Andrew S. Rosen
Telecopy: 212-424-1450
The Administrative Agent: Chase Agency Services
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
Telecopy: 212-622-0002
with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
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Attention: Karen Sharf
Telecopy: 212-270-5659
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent, (c) to pay, indemnify, and hold harmless
each Lender and the Administrative Agent from and against any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify and hold harmless each
Lender and the Administrative Agent and their respective officers, directors,
trustees, professional advisors, employees, affiliates, agents and controlling
persons (each, an "indemnitee") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or any of the Properties (all the foregoing in this clause
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(d), collectively, the "indemnified liabilities"), provided, that the Borrower
shall have no obligation hereunder to any indemnitee with respect to
indemnified liabilities to the extent such indemnified liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such indemnitee.
The agreements in this Section 10.5 shall survive repayment of the Loans and
all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.
In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In
no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.18, 2.19 and 2.20 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it were a
Lender; provided that, in the case of Section 2.19, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any
such Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
affiliate thereof or, with the consent of the Borrower and the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an
78
additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this Section 10.6, the consent
of the Borrower shall not be required, and, unless requested by the Assignee
and/or the Assignor, new Notes shall not be required to be executed and
delivered by the Borrower, for any assignment which occurs at any time when any
of the events described in Section 8(f) shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitments of, and the principal amount of
the Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, each
other Loan Party, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. Any assignment of any Loan or
other obligation hereunder (whether or not evidenced by a Note) shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained
therein in the Register on the effective date determined pursuant thereto.
(f) The Loans made by each Lender shall be evidenced by a
Note issued by the Borrower, substantially in the form of Exhibit G-1, G-2 or
G-3, as the case may be, payable to the order of such Lender. Each Lender is
hereby authorized to record, on the schedule annexed to and constituting a part
of the relevant Note, information regarding the relevant Loans made by such
Lender, and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure to make any
such recordation or any error in such recordation shall not affect the
Borrower's obligations hereunder or under any Note. On or prior to the
effective date of an Assignment
79
and Acceptance, the Borrower, at its own expense, shall execute and deliver to
the Administrative Agent, in exchange for the relevant Notes, new Notes to the
order of the Assignee and, if applicable, the Assignor. Such new Notes shall
be dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby.
(g) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information concerning the Loan Parties and their
respective affiliates which has been delivered to such Lender by or on behalf
of any Loan Party pursuant to this Agreement or any other Loan Document or
which has been delivered to such Lender by or on behalf any Loan Party in
connection with such Lender's credit evaluation of the Loan Parties and their
respective affiliates, under the condition that such Transferee or prospective
Transferee shall previously have agreed to be bound by the provisions of
Section 10.15.
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 8(f), or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans or the
Reimbursement Obligations owing to such other Lender, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans and/or
of the Reimbursement Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and
80
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof or thereof
not expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
81
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.12 any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
82
10.15 Confidentiality. Each Lender agrees to keep
information obtained by it pursuant hereto and the other Loan Documents
identified as confidential in writing at the time of delivery confidential in
accordance with such Lender's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or affiliates who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a
non-confidential basis from any source or such information that is in the
public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the Borrower unless such notice is legally
prohibited) or requested or required by bank, securities, insurance or
investment company regulations or auditors or any administrative body or
commission to whose jurisdiction such Lender may be subject, (d) to any rating
agency to the extent required in connection with any rating to be assigned to
such Lender, (e) to Transferees or prospective Transferees who agree to be
bound by the provisions of this Section 10.15, (f) to the extent required in
connection with any litigation between any Loan Party and any Lender with
respect to the Loans or this Agreement and the other Loan Documents or (g) with
the Borrower's prior written consent. The agreements in this Section 10.15
shall survive repayment of the Loans and all other amounts payable hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
INTERNATIONAL HOME FOODS, INC.
By: /s/ ANDREW S. ROSEN
-----------------------------------
Name: Andrew S. Rosen
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ KAREN SHARF
-----------------------------------
Name: Karen Sharf
Title: Vice President
83
BANKERS TRUST COMPANY, as
Syndication Agent and as a Lender
By: /s/ GINA S. THOMPSON
-----------------------------------
Name: Gina S. Thompson
Title: Vice President
MORGAN STANLEY SENIOR FUNDING, INC., as
Documentation Agent and as a Lender
By: /s/ R. SMITH
-----------------------------------
Name: R. Smith
Title: Managing Director
ALLSTATE LIFE INSURANCE COMPANY
By: /s/
-----------------------------------
Name:
Its Authorized Signatory
By: /s/
-----------------------------------
Name:
Its Authorized Signatory
ALLSTATE INSURANCE COMPANY
By: /s/
-----------------------------------
Name:
Its Authorized Signatory
By: /s/
-----------------------------------
Name:
Its Authorized Signatory
84
BANK OF HAWAII
By: /s/ SUSAN MCCARTHY
-----------------------------------
Name: Susan McCarthy
Title: Assistant Vice President
THE BANK OF NEW YORK
By: /s/ DANIEL L. BLACK
-----------------------------------
Name: Daniel L. Black
Title: Senior Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ PAUL P. MALECKI
-----------------------------------
Name: Paul P. Malecki
Title: Vice President
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By: /s/ PETER KARL HARRIS
-----------------------------------
Name: Peter Karl Harris
Title: Vice President
By: /s/ WILLIAM C. MAIER
-----------------------------------
Name: William C. Maier
Title: Vice President--Group Manager
BARCLAYS BANK PLC
By: /s/ ARMINDA YOUSE-WARDE
-----------------------------------
Name: Arminda Youse-Warde
Title: Director
BT NIM
By:
-----------------------------------
85
Name:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ CRAIG WELCH
-----------------------------------
Name: Craig Welch
Title: First Vice President
CHL HIGH YIELD LOAN PORTFOLIO
(a unit of The Chase Manhattan Bank)
By: /s/ RICHARD W. STEWART
-----------------------------------
Name: Richard W. Stewart
Title: Vice President
CITICORP USA
By: /s/ JOHN H. REXFORD
-----------------------------------
Name: John H. Rexford
Title: Vice President
CREDIT LYONNAIS, New York Branch
By: /s/ Attila Koc
-----------------------------------
Name: Attila Koc
Title: Vice President
CRESCENT CAPITAL CORP.
By:
-----------------------------------
Name:
Title:
86
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ MICHAEL R. WELLINGTON
-----------------------------------
Name: Michael R. Wellington
Title: Assistant Vice President
DRESDNER BANK AG, New York and
Grand Cayman Branches
By: /s/ RICHARD W. CONROY
-----------------------------------
Name: Richard W. Conroy
Title: Vice President
By: /s/ NICHOLAS KALOGEROPOULOS
-----------------------------------
Name: Nicholas Kalogeropoulos
Title: Assistant Treasurer
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ JOEL SEREBRANSKY
-----------------------------------
Name: Joel Serebransky
Title: Investment Officer
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ JEFFREY LUBATKIN
-----------------------------------
Name: Jeffrey Lubatkin
Title: Assistant Vice President
87
THE FIRST NATIONAL BANK OF BOSTON
By: /s/
-----------------------------------
Name:
Title:
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.,
its Agent/Manager
By: /s/ ROBERT M. COSEO
-----------------------------------
Name: Robert M. Coseo
Title: Senior Vice President
THE FUJI BANK, LTD.
By: /s/ TEIJI TERAMOTO
-----------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
GIROCREDIT BANK
By: /s/ ANCA TRIFAN
-----------------------------------
Name: Anca Trifan
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ EDWARD C. FORST
-----------------------------------
Name: Edward C. Forst
Title: Authorized Signatory
88
HARRIS TRUST AND SAVINGS
By: /s/ MARY L. BURKE
-----------------------------------
Name: Mary L. Burke
Title: Vice President
HELLER FINANCIAL, INC.
By: /s/ CHRISTINA M. RASHID
-----------------------------------
Name: Christina M. Rashid
Title: Vice President
IMPERIAL BANK
By: /s/ RAY VADALMA
-----------------------------------
Name: Ray Vadalma
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ JUNRI ODA
-----------------------------------
Name: Junri Oda
Title: Senior Vice President
ING CAPITAL ADVISORS, INC., as Agent
for Bank Syndication Account
By: /s/ MICHAEL D. HATLEY
-----------------------------------
Name: Michael D. Hatley
Title: Vice President &
Portfolio Manager
89
CONTINENTAL CASUALTY COMPANY
By: /s/ LEW H. NATHAN
-----------------------------------
Name: Lew H. Nathan
Title: Group Vice President
and Treasurer
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, New York Branch
By: /s/ SHUICHI TAJIMA
-----------------------------------
Name: Shuichi Tajima
Title: Deputy General Manager
MARINE MIDLAND BANK
By: /s/ J B LYONS
-----------------------------------
Name: J B Lyons
Title: Senior Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ JOHN B. JOYCE
-----------------------------------
Name: John B. Joyce
Title: Managing Director
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: /s/ ANTHONY R. CLEMENTE
-----------------------------------
Name: Anthony R. Clemente
Title: Authorized Signatory
90
SENIOR HIGH INCOME PORTFOLIO, INC.
By: /s/ ANTHONY R. CLEMENTE
-----------------------------------
Name: Anthony R. Clemente
Title: Authorized Signatory
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ PATRICIA LORET DE MOLA
-----------------------------------
Name: Patricia Loret de Mola
Title: Senior Vice President
NATIONAL CITY BANK
By: /s/ JOSEPH D. ROBISON
-----------------------------------
Name: Joseph D. Robison
Title: Vice President
NATIONAL WESTMINISTER BANK PLC
By: /s/ MARY PRICE
-----------------------------------
Name: Mary Price
Title: Vice President
NATIONSBANK, N.A.
By: /s/ CHRIS BARTON
-----------------------------------
Name: Chris Barton
Title: Vice President
91
THE NIPPON CREDIT BANK, LTD.
By: /s/ CLIFFORD ABRAMSKY
-----------------------------------
Name: Clifford Abramsky
Title: Senior Manager
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.
its General Partner
By: Oak Hill Securities MGP, Inc.
its General Partner
By: /s/ SCOTT KRASE
-----------------------------------
Name: Scott Krase
Title: Vice President
ORIX USA CORPORATION
By: /s/ HIROYUKI MIYAUCHI
-----------------------------------
Name: Hiroyuki Miyauchi
Title: Senior Vice President
PNC BANK, N.A.
By: /s/ TOM COLWELL
-----------------------------------
Name: Tom Colwell
Title: Vice President
PPM AMERICA, INC., as attorney in fact,
on behalf of Jackson National Life
Insurance Company
By: /s/ M. DIRE
-----------------------------------
Name: M. Dire
Title: Vice President
92
PRIME INCOME TRUST
By: /s/ RAFAEL SCOLARI
-----------------------------------
Name: Rafael Scolari
Title: Vice President
Portfolio Manager
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ MARK K. OKADA CFA
-----------------------------------
Name: Mark K. Okada CFA
Title: Executive Vice President
Protective Asset
Management, L.L.C.
RABOBANK NEDERLAND (NEW YORK)
By: /s/ JOANNA M. SOLONSKI
-----------------------------------
Name: Joanna M. Solonski
Title: Vice President
THE SANWA BANK LIMITED
By: /s/ CHRISTIAN KAMBOUR
-----------------------------------
Name: Christian Kambour
Title: Assistant Vice President
SOCIETE GENERALE, Southwest Agency
By: /s/ CHRISTOPHER SPELTZ
-----------------------------------
Name: Christopher Speltz
Title: Vice President
93
THE SUMITOMO BANK LIMITED
By: /s/
-----------------------------------
Name:
Title:
SUMITOMO TRUST & BANKING CO., LTD.,
NEW YORK BRANCH
By: /s/ SURAJ P. BHATIA
-----------------------------------
Name: Suraj P. Bhatia
Title: Senior Vice President
Manager, Corporate
Finance Department
THE TRAVELERS INSURANCE COMPANY
By: /s/ JORDAN M. STITZER
-----------------------------------
Name: Jordan M. Stitzer
Title: Vice President
UNITED STATES NATIONAL BANK OF OREGON
By: /s/ DOUGLAS A. RICH
-----------------------------------
Name: Douglas A. Rich
Title: Vice President
KZH HOLDING CORPORATION
By: /s/ ANDREW J. TAYLOR
-----------------------------------
Name: Andrew J. Taylor
Title: Authorized Agent
TCW Asset Management Company
as Attorney-in-Fact for
Integon Life Insurance Corporation
By: /s/ JUSTIN L. DRISCOLL
-----------------------------------
Name: Justin L. Driscoll
Title: Vice President
94
TCW Asset Management Company
as Attorney-in-Fact for
United Companies Life Insurance Company
By: /s/ JUSTIN L. DRISCOLL
-----------------------------------
Name: Justin L. Driscoll
Title: Vice President
95
Annex A
PRICING GRID FOR TRANCHE A LOANS AND COMMITMENT FEES
[Enlarge/Download Table]
Applicable Margin Applicable Margin Commitment
Consolidated Leverage Ratio for Eurodollar Loans for ABR Loans Fee Rate
--------------------------- --------------------- ------------------- ----------
Greater than or equal to 2.50% 1.50% 0.500%
4.50 to 1.0
Greater than or equal to 2.25% 1.25% 0.500%
4.00 to 1.0 and
less than 4.50 to 1.0
Greater than or equal to 3.50 to 1.0 2.00% 1.00% 0.375%
and less than 4.00 to 1.0
Greater than or equal to 3.00 to 1.0 1.75% 0.75% 0.375%
and less than 3.50 to 1.0
Less than 3.00 to 1.0 1.50% 0.50% 0.375%
Changes in the Applicable Margin with respect to Tranche A Loans or in the
Commitment Fee Rate resulting from changes in the Consolidated Leverage Ratio
shall become effective on the date (the "Adjustment Date") on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (but in any
event not later than the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 95th day after the end of each
fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Leverage
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this definition be deemed to be greater than 4.50 to
1. Each determination of the Consolidated Leverage Ratio pursuant to this
paragraph shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
[Enlarge/Download Table]
Schedule 1.1A
-------------
TERM LOAN COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------
Revolving Credit
Lender Commitment Tranche A Tranche B Tranche C
====================================================================================================================================
THE CHASE MANHATTAN BANK $4,625,000.00 $13,875,000.00 $83,243,243.23 $70,756,756.77
------------------------------------------------------------------------------------------------------------------------------------
BANKERS TRUST COMPANY $4,250,000.00 $12,750,000.00 $ 5,405,405.41 $ 4,594,494.59
------------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY SENIOR FUNDING, INC. $4,000,000.00 $12,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
ALLSTATE INSURANCE COMPANY $ 4,054,054.05 $ 3,445,945.94
------------------------------------------------------------------------------------------------------------------------------------
ALLSTATE LIFE INSURANCE COMPANY $ 4,054,054.06 $ 3,445,945.95
------------------------------------------------------------------------------------------------------------------------------------
BANK OF HAWAII $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
BARCLAYS BANK PLC $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
CAISSE NATIONALE DE CREDIT
AGRICOLE $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
CHL HIGH YIELD LOAN PORTFOLIO $ 5,405,405.41 $ 4,594,594.59
------------------------------------------------------------------------------------------------------------------------------------
CITICORP USA $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
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TERM LOAN COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------
Revolving Credit
Lender Commitment Tranche A Tranche B Tranche C
====================================================================================================================================
CONTINENTAL CASUALTY COMPANY $ 5,405,405.41 $ 4,594,594.59
------------------------------------------------------------------------------------------------------------------------------------
CREDIT LYONNAIS, NEW YORK BRANCH $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE DAI-ICHI KANGYO BANK, LTD. $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
DRESDNER BANK, AG, NEW YORK AND
GRAND CAYMAN BRANCHES $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES $ 8,108,108.11 $ 6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF BOSTON $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
FIRST SOURCE FINANCIAL LLP $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE FUJI BANK, LTD. $3,125,000.00 $ 9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
GIROCREDIT BANK $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
GOLDMAN SACHS CREDIT PARTNERS L.P. $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
HARRIS TRUST AND SAVINGS $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
HELLER FINANCIAL, INC. $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
IMPERIAL BANK $2,000,000.00 $ 6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
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TERM LOAN COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------
Revolving Credit
Lender Commitment Tranche A Tranche B Tranche C
====================================================================================================================================
THE INDUSTRIAL BANK OF JAPAN,
LIMITED $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
ING CAPITAL ADVISORS, INC. $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
JACKSON NATIONAL LIFE INSURANCE
COMPANY $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
KZH HOLDING CORPORATION $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK BRANCH $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
MARINE MIDLAND BANK $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC. $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
SENIOR HIGH INCOME PORTFOLIO, INC. $1,081,081.08 $ 918,918.92
------------------------------------------------------------------------------------------------------------------------------------
THE MITSUBISHI TRUST AND BANKING
CORPORATION $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
NATIONAL CITY BANK $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
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TERM LOAN COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------
Revolving Credit
Lender Commitment Tranche A Tranche B Tranche C
====================================================================================================================================
NATIONAL WESTMINSTER BANK PLC $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
NATIONSBANK, N.A. $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE NIPPON CREDIT BANK, LTD. $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
OAK HILL SECURITIES FUND, L.P. $12,972,972.97 $11,027,027.03
------------------------------------------------------------------------------------------------------------------------------------
ORIX USA CORPORATION $ 2,702,702.70 $ 2,297,297.30
------------------------------------------------------------------------------------------------------------------------------------
PNC BANK, N.A. $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
PRIME INCOME TRUST $ 8,108,108.11 $ 6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
PROTECTIVE LIFE INSURANCE COMPANY $ 8,108,108.11 $ 6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
RABOBANK NEDERLAND (NEW YORK) $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE SANWA BANK LIMITED $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
SOCIETE GENERALE $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE SUMITOMO BANK LIMITED $3,125,000.00 $9,375,000.00
------------------------------------------------------------------------------------------------------------------------------------
THE SUMITOMO TRUST & BANKING CO.,
LTD., NEW YORK BRANCH $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
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TERM LOAN COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------
Revolving Credit
Lender Commitment Tranche A Tranche B Tranche C
====================================================================================================================================
TCW ASSET MANAGEMENT COMPANY $1,351,351.35 $1,148,648.65
(INTEGON LIFE INSURANCE
CORPORATION)
------------------------------------------------------------------------------------------------------------------------------------
TCW ASSET MANAGEMENT COMPANY $1,351,351.35 $1,148,648.65
(UNITED COMPANIES LIFE INSURANCE
COMPANY)
------------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS INSURANCE COMPANY $8,108,108.11 $6,891,891.89
------------------------------------------------------------------------------------------------------------------------------------
UNITED STATES NATIONAL BANK OF
OREGON $2,000,000.00 $6,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT A
================================================================================
FORM OF
GUARANTEE AND COLLATERAL AGREEMENT
MADE BY
INTERNATIONAL HOME FOODS, INC.
AND CERTAIN OF ITS SUBSIDIARIES
IN FAVOR OF
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF NOVEMBER 1, 1996
================================================================================
Table of contents
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Page
SECTION 1. DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Right of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 No Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Amendments, etc. with respect to the Borrower Obligations . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Guarantee Absolute and Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.6 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Representations in Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Title; No Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Perfected First Priority Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Chief Executive Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Inventory and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.6 Farm Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Covenants in Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Delivery of Instruments and Chattel Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Maintenance of Perfected Security Interest; Further Documentation . . . . . . . . . . . . . . . . . . . 10
5.5 Changes in Locations, Name, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6. REMEDIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Certain Matters Relating to Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Communications with Obligors; Grantors Remain Liable . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Proceeds to be Turned Over To Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Code and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.7 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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6.8 Waiver; Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc . . . . . . . . . . . . . . . . . . . . . . 18
7.2 Duty of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.3 Execution of Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.4 Authority of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.3 No Waiver by Course of Conduct; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.4 Enforcement Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.6 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.9 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.11 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.12 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.13 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.14 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.15 Additional Grantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.16 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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GUARANTEE AND COLLATERAL AGREEMENT, dated as of November 1,
1996, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Grantors"), in favor of
THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions or
entities (the "Lenders") from time to time parties to the Credit Agreement,
dated as of November 1, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among INTERNATIONAL HOME FOODS,
INC., a Delaware corporation (the "Borrower"), the Lenders and the
Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper, Documents,
Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
2
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of
the Loans and Reimbursement Obligations and interest accruing at the
then applicable rate provided in the Credit Agreement after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post- petition interest is allowed
in such proceeding) to the Administrative Agent or any Lender (or, in
the case of any Interest Rate Protection Agreement referred to below,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Letter
of Credit or any Interest Rate Protection Agreement entered into by
the Borrower with any Lender (or any affiliate of any Lender) or any
other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be
paid by the Borrower pursuant to the terms of any of the foregoing
agreements).
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights, in the United States or any
other country, whether registered or unregistered, or published or
unpublished (including, without limitation, those listed in Schedule
6), all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all
registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any
Grantor as licensor or licensee (including, without limitation, those
listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the Uniform Commercial Code in effect
in the State of New York on the date hereof and, in any event,
including, without limitation, with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of
3
such Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of such Grantor to damages
arising thereunder and (iii) all rights of such Grantor to perform and
to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this
Agreement in its right, title and interest in such contract,
agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other
party thereto, would not give any other party to such contract,
agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing
shall not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement or any other Loan Document to which
such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": all rights, priorities and
privileges provided under U.S., multinational and foreign law relating
to intellectual property, including without limitation, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses,
the Trademarks and the Trademark Licenses, and all rights to sue at
law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of
the foregoing referred to in Schedule 6, and (iii) all rights to
obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by
a Patent, including, without limitation, any of the foregoing referred
to in Schedule 6.
4
"Pledged Notes": all promissory notes issued to or held by
any Grantor (other than promissory notes issued in connection with
extensions of trade credit by any Grantor in the ordinary course of
business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates,
options or rights of any nature whatsoever in respect of the Capital
Stock of any Person that may be issued or granted to, or held by, any
Grantor while this Agreement is in effect (provided that in no event
shall more than 65% of the total outstanding Capital Stock of any
Excluded Foreign Subsidiary be required to be pledged hereunder).
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing
referred to in Schedule 6.
"Undelivered Instruments": as defined in Section 4.8.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
5
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
(d) For the purposes of Sections 4 and 5, each reference to
Collateral or to any relevant type or item of Property constituting Collateral
shall be deemed to exclude (i) tangible Property that is not located in either
the United States (including its possessions) or Canada and (ii) Intellectual
Property rights, privileges and priorities that arise under Requirements of Law
other than those of the United States, Canada or any state, province or other
jurisdiction thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may
at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until, subject to Section 2.6, the
Borrower Obligations are paid in full, no Letter of Credit shall be outstanding
and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such
6
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of
such payment. Each Guarantor's right of contribution shall be subject to the
terms and conditions of Section 2.3. The provisions of this Section 2.2 shall
in no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall
be paid to any Guarantor on account of such subrogation rights at any time when
all of the Borrower Obligations shall not have been paid in full, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of any of
the Borrower Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all Lenders, as the case may
be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or
any Lender for the payment of the Borrower Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Borrower Obligations or for the
guarantee contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
7
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent
or any Lender may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
any Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at
270 Park Avenue, New York, New York 10017.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the
8
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Pledged Securities;
(j) all books and records pertaining to the Collateral; and
(k) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein.
4.2 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Lenders
pursuant to this Agreement and the other Liens expressly permitted to exist on
the Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Administrative Agent, for the ratable benefit
of the Lenders, pursuant to this Agreement or as are expressly permitted by the
Credit Agreement.
9
4.3 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting
to purchase any Collateral from such Grantor and (b) are prior to all other
Liens on the Collateral in existence on the date hereof except for unrecorded
Liens expressly permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law.
4.4 Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such
Grantor, or, in the case of any Issuer that is an Excluded Foreign Subsidiary,
the percentage of such shares specified on Schedule 2.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. The aggregate of all amounts payable to the
Grantors under or in connection with any Receivable that is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Administrative
Agent (collectively, "Undelivered Instruments") does not exceed $1,000,000.
4.9 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned or licensed by such Grantor in its own name on the
date hereof.
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(b) To the best of such Grantor's knowledge, all material
Intellectual Property is on the date hereof valid, subsisting, unexpired,
enforceable, has not been abandoned, and does not infringe the Intellectual
Property rights of a third party.
(c) Except as set forth in Schedule 6, none of the material
Intellectual Property is on the date hereof the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of,
or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending or, to the knowledge
of such Grantor, threatened on the date hereof seeking to limit, cancel or
question the validity, or such Grantor's ownership, of any Intellectual
Property which, if adversely determined, would have a Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take
such action or to refrain from taking such action by such Guarantor or any of
its Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If the
aggregate of all amounts payable to the Grantors pursuant to Undelivered
Instruments shall exceed $1,000,000, such Undelivered Instruments, to the
extent necessary to eliminate such excess, shall be immediately delivered to
the Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.
5.3 Insurance. Each Grantor shall cause each casualty
insurance policy maintained by it to (a) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (b) name the Administrative Agent as insured party or loss
payee, (c) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (d) be reasonably satisfactory in all other
respects to the Administrative Agent.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
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(b) Such Grantor will furnish to the Administrative Agent and
the Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute, deliver and/or have recorded with
appropriate agencies such further instruments and documents and take such
further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, the filing
of any financing or continuation statements under the Uniform Commercial Code
(or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
5.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein:
(a) permit any of the Inventory or Equipment (other than (i)
immaterial Inventory and Equipment and (ii) Inventory and Equipment in
transit in the ordinary course of business) to be kept at a location
other than those listed on Schedule 5;
(b) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4; or
(c) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative
Agent in connection with this Agreement would become misleading.
5.6 Notices. Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of any Lien (other than
security interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would adversely affect the ability of
the Administrative Agent to exercise any of its remedies hereunder.
5.7 Pledged Securities. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. If an Event of
Default shall have occurred
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and be continuing, (i) any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations and (ii) in case any distribution of capital shall
be made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums
of money or property so paid or distributed in respect of the Pledged
Securities shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
Notwithstanding anything to the contrary contained herein, in no event shall
any Grantor be obligated to pledge more than 65% of the Capital Stock of any
Excluded Foreign Subsidiary.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
(except to the extent such stock or other securities are pledged to the
Administrative Agent hereunder) or to issue any other securities convertible
into or granting the right to purchase or exchange for any stock or other
equity securities of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Pledged Securities or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement or (iv) enter into
any agreement or undertaking restricting the right or ability of such Grantor
or the Administrative Agent to Dispose of any of the Pledged Securities or
Proceeds thereof (except, in the case of this clause (iv), in connection with a
Disposition expressly permitted by the Credit Agreement).
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.7(a) with respect to the Pledged Securities issued by it and (iii)
the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Pledged Securities issued by it.
5.8 Receivables. (a) Other than in the ordinary course of
business, such Grantor will not (i) grant any extension of the time of payment
of any Receivable, (ii) compromise or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, (iv) allow any credit or discount whatsoever on
any Receivable or (v) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.
(b) If at any time the aggregate amount owing to the Grantors
on all Accounts as to which a Governmental Authority is an obligor exceeds 5%
of the aggregate amount owing to the Grantors on all Accounts, the Borrower
shall so notify the Administrative Agent and, if requested by the
Administrative Agent, at the Grantors' sole cost and expense, from and after
the date on which such
13
aggregate amount first exceeds such percentage, deliver to the Administrative
Agent such assignments, notices of assignment and other documents or
information as shall be necessary or otherwise reasonably requested by the
Administrative Agent to permit the assignment hereunder of all Accounts as to
which a Governmental Authority is an obligor pursuant to all applicable
Requirements of Law (including, without limitation, the Assignment of Claims
Act of 1940, as amended).
5.9 Intellectual Property. (a) Such Grantor (either itself
or through licensees) will (i) continue to use each material Trademark on each
and every trademark class of goods applicable to its current line as reflected
in its then-current catalogs, brochures and price lists in order to maintain
such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under
such Trademark, (iii) use such Trademark with all notices and legends required
by applicable law or regulations, and (iv) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) will
not (and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of the Copyrights may
become invalidated or otherwise impaired. Such Grantor will not (either itself
or through licensees) do any act whereby any material portion of the Copyrights
may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will
not do any act that knowingly uses a material Intellectual Property to infringe
the Intellectual Property rights of a third party.
(e) Such Grantor will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Patent, Copyright or Trademark may become
abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the U.S. Copyright Office or any court or tribunal in any
country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for any Patent
or Trademark with the United States Patent and Trademark Office or any
Copyright in the U.S. Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, such Grantor shall report
such filing to the Administrative Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of
the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
14
(g) Such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the U.S. Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent and the Lenders after it learns thereof.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may reasonably require in connection with such test
verifications. At any time while an Event of Default shall have occurred and
be continuing, upon the Administrative Agent's request and at the expense of
the relevant Grantor, such Grantor shall cause independent public accountants
or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor
to collect such Grantor's Receivables, and the Administrative Agent may curtail
or terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Lenders only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor. Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Administrative Agent's request, each Grantor shall
deliver to the Administrative Agent, and have recorded, all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the then existing Receivables, including, without limitation, all
original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at
any time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's reasonable satisfaction the existence, amount and terms
of any Receivables.
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(b) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables that the Receivables have been
assigned to the Administrative Agent for the ratable benefit of the Lenders and
that payments in respect thereof shall be made directly to the Administrative
Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Lender of any payment relating thereto, nor shall
the Administrative Agent or any Lender be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable (or
any agreement giving rise thereto) to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer, to the extent permitted in
the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Securities; provided, however, that no vote shall be
cast or corporate right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application thereof
to the Obligations in such order as the Administrative Agent may determine, and
(ii) any or all of the Pledged Securities shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.
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(c) Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and other near-cash items shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At any time after the
occurrence and during the continuance of an Event of Default, at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
in such order as the Administrative Agent may elect, and any part of such funds
which the Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or
any Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to
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purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Administrative Agent's request,
to assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in
part of the Obligations, in such order as the Administrative Agent may elect,
and only after such application and after the payment by the Administrative
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
6.7 Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering
of the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of
the Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall
designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
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(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall
be specifically enforceable against such Grantor, and such Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not
to assert any rights or privileges which it may acquire under Section 9-112 of
the Code. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such
moneys due under any Receivable or with respect to any other
Collateral whenever payable;
(ii) in the case of any Copyright, Patent or Trademark,
execute, deliver and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may
request to evidence the Administrative Agent's and the Lenders'
security interest in such Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
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(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine;
and (8) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option
and such Grantor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' security interests therein and
to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable under the Credit Agreement on past due Tranche A
Loans that are ABR Loans, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
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7.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent,
any Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative
Agent and the Lenders hereunder are solely to protect the Administrative
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any such powers.
The Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the Code and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
no Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
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8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Lender and the Administrative Agent
for all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing or preserving
any rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the same extent the Borrower would be required to do so pursuant
to Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. In addition to any rights and remedies of the
Administrative Agent and the Lenders provided by law, the Administrative Agent
and each Lender shall have the right, without prior notice to any Grantor, any
such notice being expressly waived by each Grantor to the extent permitted by
applicable law, upon any amount becoming due and payable by any Grantor
hereunder (whether at the stated maturity, by acceleration or otherwise) to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
22
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of such Grantor. The Administrative Agent and each
Lender agrees promptly to notify the relevant Grantor and (if applicable) the
Administrative Agent after any such setoff and application made by the
Administrative Agent or such Lender, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Grantors, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 Submission To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
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(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 8.11 any special, exemplary,
punitive or consequential damages.
8.12 Acknowledgements. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Grantors, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
8.13 WAIVERS OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.14 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.15 Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.10
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
24
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred
or otherwise disposed of in a transaction permitted by the Credit Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
INTERNATIONAL HOME FOODS, INC.
By:
----------------------------
Title:
AMERICAN HOME FOODS, INC.
By:
----------------------------
Title:
LUCK'S INC.
By:
----------------------------
Title:
M. POLANER, INC.
By:
----------------------------
Title:
HERITAGE BRANDS HOLDINGS, INC.
By:
----------------------------
Title:
25
HERITAGE BRANDS, INC.
By:
----------------------------
Title:
CAMPFIRE, INC.
By:
----------------------------
Title:
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
Schedule 2
DESCRIPTION OF PLEDGED STOCK
[Download Table]
Issuer Class of Stock Stock Certificate No. No. of Shares
------ -------------- --------------------- -------------
American Home Foods, Inc.
Luck's Inc.
M. Polaner, Inc.
Heritage Brands Holdings, Inc.
Heritage Brands, Inc.
Campfire, Inc.
Canadian Home Products Limited
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Copyright, Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION
AND CHIEF EXECUTIVE OFFICE
[Download Table]
Grantor Jurisdiction of Organization Chief Executive Office
------- ---------------------------- ----------------------
International Home Foods, Inc.
American Home Foods, Inc.
Luck's Inc.
M. Polaner, Inc.
Heritage Brands Holdings, Inc.
Heritage Brands, Inc.
Campfire, Inc.
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
[Download Table]
Grantor Locations
------- ---------
International Home Foods, Inc.
American Home Foods, Inc.
Luck's Inc.
M. Polaner, Inc.
Heritage Brands Holdings, Inc.
Heritage Brands, Inc.
Campfire, Inc.
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of November 1, 1996 (the "Agreement"), made
by the Grantors parties thereto for the benefit of The Chase Manhattan Bank, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) of
the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.
CANADIAN HOME PRODUCTS LIMITED
By:
---------------------------
Title:
Address for Notices:
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made
by ______________________________, a ______________ corporation (the
"Additional Grantor"), in favor of THE CHASE MANHATTAN BANK, as Administrative
Agent (in such capacity, the "Administrative Agent") for the banks and other
financial institutions (the "Lenders") parties to the Credit Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, International Home Foods, Inc. (the "Borrower"), the
Lenders and the Administrative Agent have entered into a Credit Agreement,
dated as of November 1, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of November 1, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________* to the Guarantee and Collateral Agreement. The Additional
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 3 of the Guarantee and Collateral Agreement is
true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
__________________________________
* Refer to each Schedule which needs to be supplemented.
2
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
-----------------------------------
Name:
Title:
EXHIBIT B TO THE
CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
To: The Lenders Parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to Section
6.2(b) of the Credit Agreement, dated as of November 1, 1996, among
International Home Foods, Inc. (the "Borrower"), the Lenders party thereto,
Morgan Stanley Senior Funding, Inc., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of the Borrower;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a detailed review of
the financial condition of the Borrower and its Subsidiaries for the accounting
period covered by the attached financial statements;
3. Except as set forth below, to the best of my knowledge,
each of the Borrower and each of its Subsidiaries during the accounting period
covered by the attached financial statements observed or performed all of its
covenants and other agreements contained in the Credit Agreement and the other
Loan Documents to which it is a party to be observed or performed by it; and
the examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or an Event of Default during or at the end of such accounting period
or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Credit Agreement, all of which data and computations are true, complete and
correct.
Described below are the exceptions, if any, to paragraph 3,
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower or the relevant
Subsidiary has taken, is taking, or proposes to take with respect to each such
condition or event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support thereof, are made and delivered in my capacity described
in paragraph 1 above for and on behalf of the Borrower this _____ day of
________________, 19__.
INTERNATIONAL HOME FOODS, INC.
By
-----------------------------
Name:
Title:
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ___________ __,
19__ with Sections 7.1(a), (b), (c) and 7.7 of
the Credit Agreement
(All calculations for trailing four
quarters except as otherwise required by the
Credit Agreement)
[Download Table]
Section 7.1(a) Consolidated Leverage Ratio.
-------------------------------------------
Consolidated Leverage:
(a) Consolidated Total Debt outstanding _____
Consolidated EBITDA:
Consolidated Net Income _____
plus income tax expense _____
plus interest expense
plus amortization or writeoff of debt
discount and debt issuance costs
and commissions and other fees
and charges associated with
Indebtedness (including the Loans) _____
plus depreciation expense _____
plus amortization expense _____
plus amortization of intangibles
(including, but not limited to,
goodwill) and organization costs _____
plus any extraordinary or non-ordinary course
expenses or losses _____
plus any other noncash charges _____
minus to the extent included in this
statement of the Consolidated Net Income
for such period the sum of:
(i) interest income _____
(ii) any extraordinary or non-ordinary course
income or gains and _____
(iii) any other noncash income _____
(b) Consolidated EBITDA: _____
2
[Download Table]
CONSOLIDATED LEVERAGE RATIO (a)/(b) _____
Must be less than or equal to: [Insert from Table]
Section 7.1(b) Consolidated Interest Coverage Ratio.
The ratio of
(a) Consolidated EBITDA _____
to
(b) (i) Total cash interest
expense (including that
attributable to Capital Lease
Obligations and all commissions,
discounts and other fees and
charges owed with respect to
letters of credit and bankers'
acceptance financing and net
costs under Interest Rate
Protection Agreements to the
extent such net costs are
allocable to such period in
accordance with GAAP) _____
minus
(ii) Total cash interest
income _____
CONSOLIDATED INTEREST EXPENSE _____
CONSOLIDATED INTEREST COVERAGE
RATIO (a)/(b) _____
Must be greater than or equal to: [Insert from Table]
3
[Download Table]
Section 7.1(c) Consolidated Fixed Charge Coverage Ratio.
--------------------------------------------------------
The ratio of
Consolidated EBITDA _____
minus the lesser of:
(i) Capital Expenditures of the Borrower
and its Subsidiaries (excluding
(x) the principal amount of
Indebtedness (other than Loans) incurred
in connection with such expenditures
and (y) Capital Expenditures made pursuant
to Section 7.7(b) of the Credit Agreement) _____
(ii) if applicable, the Scheduled Capital
Expenditure Amount _____
(a) NUMERATOR _____
to
the sum (without duplication) of:
(a) Consolidated Interest Expense
for such period _____
(b) provision for cash income
taxes paid by the Borrower or
any of its Subsidiaries on a
consolidated basis in respect
of such period _____
(c) scheduled payments made during
such period on account of
principal of Indebtedness of the
4
[Download Table]
Borrower or any of its
Subsidiaries (including the
Term Loans) _____
(b) DENOMINATOR _____
CONSOLIDATED FIXED CHARGE COVERAGE
RATIO (a)/(b) _____
Must be greater than or equal to: [Insert from Table]
Section 7.7 Capital Expenditures.
Capital Expenditures of the Borrower
and the other Subsidiaries as of the
date hereof with respect to the
current fiscal year _____
CAPITAL EXPENDITURES _____
Must be less than or equal to:
$35,000,000 (for fiscal years
ended on or prior to December 31, 1998) $35,000,000
$40,000,000 (for fiscal years ended
after December 31, 1998) $40,000,000
plus up to $15,000,000 of the unutilized
portion of the basket carried over from
preceding fiscal year _____
plus Reinvestment Deferred Amount _____
plus Unapplied Excess Cash Flow _____
plus Contributed Equity _____
TOTAL PERMITTED CAPITAL EXPENDITURES _____
Exhibit C to the
Credit Agreement
FORM OF CLOSING CERTIFICATE
[NAME OF LOAN PARTY]
Pursuant to Section 5.1(g) of the Credit Agreement, dated as
of November 1, 1996 (the "Credit Agreement"; terms defined therein being used
herein as therein defined), among International Home Foods, Inc., the Lenders
parties thereto, Morgan Stanley Senior Funding, Inc., as Documentation Agent,
Bankers Trust Company, as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent, the undersigned ___________________ of ____________ (the
"Certifying Loan Party") hereby certifies as follows:
i. The representations and warranties of the Certifying
Loan Party set forth in each of the Loan Documents to which it is a
party or which are contained in any certificate furnished by or on
behalf of the Certifying Loan Party pursuant to or in connection with
any of the Loan Documents to which it is a party are true and correct
in all material respects on and as of the date hereof with the same
effect as if made on the date hereof;
ii. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the Loans
to be made on the date hereof and/or the issuance of any Letters of
Credit to be issued on the date hereof;
iii. ___________ is and at all times since ___ __, 199_
has been, the duly elected and qualified [Assistant] Secretary of the
Certifying Loan Party and the signature set forth for such officer
below is such officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Certifying Loan Party
certifies as follows:
iv. There are no liquidation or dissolution proceedings
pending or to my knowledge threatened against the Certifying Loan
Party, nor has any other event occurred adversely affecting or
threatening the continued corporate existence of the Certifying Loan
Party after the date hereof;
v. The Certifying Loan Party is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its organization;
vi. Attached hereto as Annex 1 is a correct and complete
copy of resolutions duly adopted by the Board of Directors of the
Certifying Loan Party on _____________ __, 199_ authorizing (i) the
execution, delivery and performance of the Loan Documents to which it
is a party and (ii) the transactions contemplated by the Loan
Documents to which it is a party;
such resolutions have not in any way been amended, modified, revoked
or rescinded and have been in full force and effect since their
adoption to and including the date hereof and are now in full force
and effect; such resolutions are the only corporate proceedings of the
Certifying Loan Party now in force relating to or affecting the
matters referred to therein; attached hereto as Annex 2 is a correct
and complete copy of the By-Laws of the Certifying Loan Party as in
effect at all times since __________ __, 199_ to and including the
date hereof, and such By-Laws have not been amended, repealed,
modified or restated; and attached hereto as Annex 3 is a correct and
complete copy of the Certificate of Incorporation of the Certifying
Loan Party as in effect at all times since _________ __, 199_ to and
including the date hereof, and such Certificate of Incorporation has
not been amended, repealed, modified or restated;
vii. The following Persons are now duly elected and
qualified officers of the Certifying Loan Party holding the offices
indicated next to their respective names below, and the signatures
appearing opposite their respective names below are the true and
genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver, on behalf of the Certifying Loan
Party, each of the Loan Documents to which it is a party and any
certificate or other document to be delivered by the Certifying Loan
Party pursuant to such Loan Documents:
[Download Table]
Name Office Signature
---- ------ ---------
--------------- ----------------- --------------------
--------------- ----------------- --------------------
--------------- ----------------- --------------------
--------------- ----------------- --------------------
IN WITNESS WHEREOF, the undersigned have hereunto set our
names as of the date set forth below.
By: By:
------------------------------ -----------------------------------
Name: Name:
Title: Title: [Assistant] Secretary
Date: November 1, 1996
Annex 1
Resolutions
Annex 2
By-Laws
Annex 3
Certificate of Incorporation
EXHIBIT D-1
[Texas]
DEED OF TRUST AND SECURITY AGREEMENT
from
INTERNATIONAL HOME FOODS, INC., Grantor
to
GLENN D. KESSELHAUT, ESQ., Trustee
for the use and
benefit of
THE CHASE MANHATTAN BANK,
as Administrative Agent, Beneficiary
DATED AS OF OCTOBER __, 1996
After recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Amy Jedlicka, Esq.
EXHIBIT D-1
[Texas]
FORM OF BORROWER
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT, dated as of October
__, 1996 is made by INTERNATIONAL HOME FOODS, INC. (formerly known as American
Home Food Products, Inc.), a Delaware corporation ("GRANTOR"), whose address is
Five Giralda Farms, Madison, New Jersey 07940 Attention: Kenneth J. Martin, to
GLENN D. KESSELHAUT, ESQ., an individual resident of the State of New York,
("TRUSTEE") having an address c/o Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York 10017-3954, for the use and benefit of THE CHASE
MANHATTAN BANK, a New York banking corporation ("CHASE"), as Administrative
Agent for the Lenders (as such terms are defined in the Credit Agreement
defined below; in such capacity, "BENEFICIARY", which term shall be deemed to
include the successors and assigns of the Administrative Agent), whose address
is c/o Chase Agency Services, 140 East 45th Street, New York, New York 10017
Attention: Sandra Miklave. References to this "DEED OF TRUST" shall mean this
instrument and any and all renewals, modifications, amendments, supplements,
extensions, consolidations, substitutions, spreaders and replacements of this
instrument.
Background
a. Grantor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "IMPROVEMENTS"), being collectively referred to as the "REAL
ESTATE").
b. Grantor is a party to that certain Credit Agreement dated as
of even date herewith (as the same may be amended, supplemented, restated,
extended, replaced or otherwise modified from time to time, the "CREDIT
AGREEMENT") with Morgan Stanley Senior Funding, Inc., as Documentation Agent,
Bankers Trust Company, as Syndication Agent, Chase as Administrative Agent and
the several banks and other financial institutions or entities from time to
time parties thereto (the "LENDERS"). Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement. In
the event of any conflict between the provisions of this Deed of Trust and the
provisions of the Credit Agreement, the applicable provisions of the Credit
Agreement shall govern and control. References in this Deed of Trust to the
"DEFAULT RATE" shall mean interest at a rate per annum equal to the ABR plus 2%
but in no event greater than the Highest Lawful Rate.
c. Pursuant to the terms of the Credit Agreement, (1) the Lenders
have agreed (a) to make certain Revolving Credit Loans to Grantor in an
aggregate principal amount at any one time outstanding not to exceed
$100,000,000.00 and (b) to make certain Term Loans defined in the Credit
Agreement as the Tranche A Term Loans, the Tranche B Term Loans and the Tranche
C Term Loans to Grantor in an aggregate principal amount not to exceed
$670,000,000.00, (2) the Swing Line Lender has
2
agreed to make certain Swing Line Loans in an aggregate principal amount at any
one time outstanding not to exceed $10,000,000.00, and (3) Chase, in its
capacity as an Issuing Lender, has agreed to issue, and the other Lenders which
are L/C Participants have agreed to acquire participating interests in, Letters
of Credit for the account of Grantor; the sum of (i) the aggregate then undrawn
and unexpired amount of the then outstanding Letters of Credit and (ii) the
aggregate amount of drawings under the Letters of Credit which have not been
reimbursed pursuant to subsection 3.5 of the Credit Agreement shall not exceed
$25,000,000.00. The maximum aggregate principal amount of the Loans and the
L/C Obligations outstanding at any one time shall not exceed $770,000,000.00.
d. It is a condition precedent, among others, to the obligations
of the Lenders to make the Loans and the Issuing Lender to issue the Letters of
Credit that Grantor execute and deliver this Deed of Trust.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Notes, and (ii) all interest (including, without limitation, interest
accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to Grantor
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) and fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements
of counsel to Beneficiary or to the Lenders that are required to be
paid by Grantor pursuant to the terms of the Credit Agreement or this
Deed of Trust) or otherwise payable thereon, (iii) payment of the
Reimbursement Obligation with respect to Letters of Credit pursuant to
the Credit Agreement, whether in respect of any drawings under any
Letters of Credit, fees, commissions, expenses or otherwise and (iv)
all obligations in respect of any Interest Rate Protection Agreement
with any Lender (the items set forth in clauses (i) through (iv) being
referred to collectively as the "INDEBTEDNESS"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Grantor (the "OBLIGATIONS") whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, the Notes, this Deed of Trust,
any other document securing payment of the Indebtedness (the "SECURITY
DOCUMENTS") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing
(the Notes, the Security Documents and all other documents and
instruments from time to time evidencing, securing or guaranteeing the
payment of the Indebtedness or the performance of the Obligations, as
any of the same may be amended, supplemented, extended, renewed,
restated, replaced or modified from time to time, are collectively
referred to as the "LOAN DOCUMENTS");
3
GRANTOR HEREBY CONVEYS TO TRUSTEE AND HEREBY GRANTS, ASSIGNS, TRANSFERS AND
SETS OVER TO TRUSTEE AND ALSO TO SUBSTITUTE TRUSTEE (AS DEFINED BELOW), IN
TRUST WITH POWER OF SALE FOR THE USE AND BENEFIT OF BENEFICIARY, AND GRANTS
BENEFICIARY AND TRUSTEE A SECURITY INTEREST IN (TO THE EXTENT ANY OF THE
FOLLOWING CONSTITUTES PERSONAL PROPERTY):
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Grantor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Grantor in, to and under
all easements, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues,
profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Real Estate to
the center line thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles of
personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Grantor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains, draperies,
artwork, carpets, rugs, storm doors and windows, furniture and
furnishings, heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilating, air conditioning and air-cooling
apparatus, refrigerating, and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communication systems (including satellite
dishes and antennae), televisions, computers, sprinkler systems and
other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks,
conduits, appliances, fittings and fixtures of every kind and
description (all of the foregoing in this paragraph (D) being referred
to as the "EQUIPMENT");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements
to, the Real Estate and the Equipment, subsequently acquired by or
released to Grantor or constructed, assembled or placed by Grantor on
the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation,
any and all building materials whether stored at the Real Estate or
offsite, and, in each such case, without any further mortgage,
conveyance, assignment or other act by Grantor;
4
(F) all right, title and interest of Grantor in, to and under
all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Grantor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "LEASES"), and
all rights of Grantor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Trust Property (as defined below)
(collectively, the "RENTS");
(G) all trade names, trade marks, logos, copyrights, good
will and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof;
all general intangibles related to the operation of the Improvements
now existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Grantor relating to the Real Estate or
Equipment and Grantor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by
eminent domain, condemnation or otherwise, of all or any part of the
Real Estate or any easement or other right therein;
(I) all right, title and interest of Grantor in and to (i)
all contracts from time to time executed by Grantor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or
any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of
Equipment (collectively, the "CONTRACTS"), (ii) all consents,
licenses, building permits, certificates of occupancy and other
governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "PERMITS") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real
Estate (collectively, the "PLANS");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Beneficiary as provided in this Deed of Trust; all capital, operating,
reserve or similar accounts held by or on behalf of Grantor and
related to the operation of the Trust Property, whether now existing
or hereafter arising and all monies held in any of the foregoing
accounts and any certificates or instruments related to or evidencing
such accounts;
5
(K) all accounts and revenues arising from the operation of
the Improvements including, without limitation, (i) any right to
payment now existing or hereafter arising for rental of hotel rooms or
other space or for goods sold or leased or for services rendered,
whether or not yet earned by performance, arising from the operation
of the Improvements or any other facility on the Trust Property and
(ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising
from the use of the American Express Card, the Visa Card, the Carte
Blanche Card, the Mastercard or any other credit card, including those
now existing or hereafter created, substitutions therefor, proceeds
thereof (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Grantor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"PREMISES", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "TRUST PROPERTY").
TO HAVE AND TO HOLD the Trust Property and the rights and
privileges hereby granted unto Trustee, Substitute Trustee, their successors
and assigns for the uses and purposes set forth, until the Indebtedness is
fully paid and the Obligations fully performed. Notwithstanding anything to
the contrary set forth herein, the maximum aggregate principal amount secured
hereby shall not exceed $770,000,000.00. This Deed of Trust covers present and
future advances and re-advances, in the aggregate amount of the obligations
secured hereby, made by the Lenders for the benefit of Grantor and the lien of
such future advances and re-advances shall relate back to the date of this Deed
of Trust.
Terms and Conditions
Grantor further represents, warrants, covenants and agrees
with Trustee and Beneficiary as follows:
i. Warranty of Title. Grantor warrants that Grantor has
good title to the Real Estate in fee simple and good title to the rest of the
Trust Property, subject only to the matters that are set forth in Schedule B of
the title insurance policy or policies being issued to Beneficiary to insure
the lien of this Deed of Trust (the "PERMITTED EXCEPTIONS") and Grantor shall
warrant, defend and preserve such title and the rights granted by this Deed of
Trust with respect thereto against all claims of all persons and entities.
Grantor further warrants that it has the right to grant this Deed of Trust.
ii. Payment of Indebtedness. Grantor shall pay the
Indebtedness at the times and places and in the manner specified in the Notes
and shall perform all the Obligations.
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iii. Requirements. (a) Grantor shall promptly comply
with, or cause to be complied with, and conform to all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of each of
the United States of America, any State and any municipality, local government
or other political subdivision thereof and any agency, department, bureau,
board, commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "GOVERNMENTAL AUTHORITY") which has
jurisdiction over the Trust Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the Trust
Property, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of any of the Trust Property,
except to the extent that the failure to comply therewith could not reasonably
be expected to have a Material Adverse Effect. All present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements of every Governmental Authority applicable to Grantor or to any of
the Trust Property and all covenants, restrictions, and conditions which now or
later may be applicable to any of the Trust Property are collectively referred
to as the "LEGAL REQUIREMENTS".
(b) From and after the date of this Deed of Trust, Grantor
shall not by act or omission permit any building or other improvement on any
premises not subject to this Deed of Trust to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and Grantor
hereby assigns to Beneficiary any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Grantor shall
not by act or omission impair the integrity of any of the Real Estate so as to
constitute an illegal subdivision or to prohibit the Premises and Improvements
from being conveyed as one zoning or tax lot. Grantor represents that the
Premises are not part of a larger tract of land owned by Grantor or its
affiliates or otherwise considered as part of one zoning or tax lot, or, if
they are that any authorization or variance required for the subdivision of
such larger tract which a sale of the Premises would entail has been obtained
from all appropriate Governmental Authorities so that the Premises and
Improvements constitute one zoning or tax lot capable of being conveyed as
such. Any act or omission by Grantor which would result in a violation of any
of the provisions of this subsection shall be void.
iv. Payment of Taxes and Other Impositions. (a)
Promptly when due but in any event prior to delinquency, Grantor shall pay and
discharge all taxes of every kind and nature (including, without limitation,
all real and personal property, income, franchise, withholding, transfer,
gains, profits and gross receipts taxes), all charges for any easement or
agreement maintained for the benefit of any of the Trust Property, all general
and special assessments, levies, permits, inspection and license fees, all
water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Trust Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest
on any of the foregoing (all of the foregoing are collectively referred to as
the "IMPOSITIONS"). Upon request by Beneficiary, Grantor shall deliver to
Beneficiary (i) original or copies of receipted bills and cancelled checks
evidencing payment of such Imposition if it is a real estate tax or other
public charge and (ii) evidence reasonably acceptable to Beneficiary showing
the payment of any other such Imposition. If by law any Imposition, at
Grantor's option, may be paid in installments (whether or not interest shall
accrue on the unpaid balance of such
7
Imposition), Grantor may elect to pay such Imposition in such installments and
shall be responsible for the payment of such installments with interest, if
any.
(b) Nothing herein shall affect any right or remedy of
Trustee or Beneficiary under this Deed of Trust or otherwise, without notice or
demand to Grantor, to pay any Imposition after the date such Imposition shall
have become due, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the Default Rate. Beneficiary shall
give Grantor notice of its intent to pay any Impositions unless an Event of
Default has occurred and is continuing. Any sums paid by Trustee or
Beneficiary in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Deed of Trust, and (ii)
payable on demand by Grantor to Trustee or Beneficiary, as the case may be,
together with interest at the Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Deed of Trust or on any
interest payable thereon for any taxes assessed against the Trust Property or
any part thereof, and shall not claim any deduction from the taxable value of
the Trust Property by reason of this Deed of Trust.
(d) Subject to the provisions of Section 6.3 of the Credit
Agreement, Grantor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, provided Grantor shall maintain adequate
reserves with respect thereto on its books in conformity with GAAP.
(e) Upon written notice to Grantor, Beneficiary after and
during the continuation of an Event of Default (as defined below) shall be
entitled to require Grantor to pay monthly in advance to Beneficiary the
equivalent of 1/12th of the estimated annual Impositions. Beneficiary may
commingle such funds with its own funds and Grantor shall not be entitled to
interest thereon. Any funds so collected by Beneficiary shall be used to pay
Impositions as they become due.
v. Insurance. (a) Grantor shall maintain or cause to
be maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss. The policy shall include building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss;
(ii) comprehensive general liability insurance under a
policy including the "broad form CGL endorsement" (or which
incorporates the language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage
occurring on, in or about the Premises in an amount not less than
$10,000,000 combined single limit with respect to injury and property
damage relating to any one occurrence plus such excess limits as
Beneficiary shall request from time to time;
8
(iii) when and to the extent required by Beneficiary,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality
or localities in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or
business interruption (and/or soft costs, in the case of new
construction), if applicable, in amounts satisfactory to Beneficiary,
but not less than one year's gross rent or gross income;
(v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), (including coverage for elevators and
escalators, if any). The policy shall include coverage for
independent contractors and completed operations. The completed
operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on an occurrence basis against claims for personal
injury, including, without limitation, bodily injury, death or
property damage occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, such insurance to afford
immediate minimum protection to a limit of not less than that required
by Beneficiary with respect to personal injury, bodily injury or death
to any one or more persons or damage to property;
(vi) during the course of any construction or repair of
the Improvements, workers' compensation insurance (including
employer's liability insurance) for all employees of Grantor engaged
on or with respect to the Premises in such amounts as are reasonably
satisfactory to Beneficiary, but in no event less than the limits
established by law;
(vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value form insurance against "all risks of physical loss," including
collapse, water damage, flood and earthquake and transit coverage,
during construction or repairs of the Improvements, with deductible
approved by Beneficiary, in nonreporting form, covering the total
value of work performed and equipment, supplies and materials
furnished (with an appropriate limit for soft costs in the case of
construction);
(viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
and insurance against rent, extra expense, business interruption and
soft costs, if applicable, arising from any such breakdown, in such
amounts as are reasonably satisfactory to Beneficiary but not less
than the lesser of $1,000,000 or 10% of the value of the Improvements;
(ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount satisfactory to Beneficiary, but in no event less than the
maximum limit of coverage available under the National Flood Insurance
Act of 1968, as amended; and
9
(x) such other insurance in such amounts as Beneficiary
may reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30 days' prior written notice to Beneficiary, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$100,000 or such greater amount as Beneficiary shall approve in writing,
contain a "Replacement Cost Endorsement" without any deduction made for
depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Beneficiary), with loss payable solely to
Beneficiary (modified, if necessary, to provide that proceeds in the amount of
replacement cost may be retained by Beneficiary without the obligation to
rebuild) as its interest may appear, without contribution, under a "standard"
or "New York" mortgagee clause acceptable to Beneficiary and be written by
insurance companies having an A.M. Best Company, Inc. rating of A or higher and
a financial size category of not less than VI, or otherwise as approved by
Beneficiary. Liability insurance policies shall name Beneficiary (and Trustee,
if Trustee shall so request) as an additional insured and contain a waiver of
subrogation against Beneficiary (and Trustee, if Trustee shall so request); all
such policies shall indemnify and hold Beneficiary (and Trustee, if Trustee
shall so request) harmless from all liability claims occurring on, in or about
the Premises and the adjoining streets, sidewalks and passageways. The amounts
of each insurance policy and the form of each such policy shall at all times be
reasonably satisfactory to Beneficiary. Each policy shall expressly provide
that any proceeds which are payable to Beneficiary shall be paid by check
payable to the order of Beneficiary only and requiring the endorsement of
Beneficiary only. If any required insurance shall expire, be withdrawn, become
void by breach of any condition thereof by Grantor or by any lessee of any part
of the Trust Property or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, or if for any other reason whatsoever
such insurance shall become unsatisfactory to Beneficiary in Beneficiary's
reasonable judgement, Grantor shall immediately obtain new or additional
insurance satisfactory to Beneficiary. Grantor shall not take out any separate
or additional insurance which is contributing in the event of loss unless it is
properly endorsed and otherwise satisfactory to Beneficiary in all respects.
(b) Grantor shall deliver to Beneficiary an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Beneficiary, together with a copy of the declaration page for
each such policy. Grantor shall (i) pay as they become due all premiums for
such insurance, (ii) not later than 15 days prior to the expiration of each
policy to be furnished pursuant to the provisions of this Section, deliver a
renewed policy or policies, or duplicate original or originals thereof, marked
"premium paid," or accompanied by such other evidence of payment reasonably
satisfactory to Beneficiary with standard non-contributory mortgage clauses in
favor of and acceptable to Beneficiary. Upon request of Beneficiary, Grantor
shall cause its insurance underwriter or broker to certify to Beneficiary in
writing that all the requirements of this Deed of Trust governing insurance
have been satisfied.
(c) If Grantor is in default of its obligations to insure or
deliver any such prepaid policy or policies, then Beneficiary, at its option
and without notice, may effect such insurance from year to year,
10
and pay the premium or premiums therefor, and Grantor shall pay to Beneficiary
on demand such premium or premiums so paid by Beneficiary with interest from
the time of payment at the Default Rate and the same shall be deemed to be
secured by this Deed of Trust and shall be collectible in the same manner as
the Indebtedness secured by this Deed of Trust.
(d) Grantor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12
months from the date of this Deed of Trust and each successive 12 month period
to occur thereafter) by using the F.W. Dodge Building Index to determine
whether there shall have been an increase in the replacement value since the
most recent adjustment and, if there shall have been such an increase, the
amount of insurance required shall be adjusted accordingly.
(e) Grantor promptly shall comply with and conform to (i) all
provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Grantor or to any of the Trust Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Trust Property. Grantor shall not use or permit the use
of the Trust Property in any manner which would permit any insurer to cancel
any insurance policy or void coverage required to be maintained by this Deed of
Trust.
(f) (i) If the Trust Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Grantor for any
personal injury, bodily injury or property damage incurred on or about
the Premises, Grantor shall give immediate notice thereof to
Beneficiary.
(ii) If the Trust Property is damaged by fire or other
casualty and the cost to repair such damage is greater than $1,000,000
but less than $10,000,000, then provided that no Event of Default
shall have occurred and be continuing, Grantor shall have the right to
adjust such loss, and the insurance proceeds relating to such loss may
be paid over to Grantor to be applied, at Grantor's election, either
(1) in accordance with Section 2.11 of the Credit Agreement or (2)
towards the repair and restoration of all such damage.
(iii) If the Trust Property is damaged by fire or other
casualty, and the cost to repair such damage is greater than
$10,000,000 but less than $15,000,000, then Grantor authorizes and
empowers Beneficiary, at Beneficiary's option and in Beneficiary's
sole discretion, as attorney-in-fact for Grantor, to make proof of
loss, to adjust and compromise any claim under any insurance policy,
to appear in and prosecute any action arising from any policy, to
collect and receive insurance proceeds and to deduct therefrom
Beneficiary's expenses incurred in the collection process. Each
insurance company concerned is hereby authorized and directed to make
payment for such loss directly to Beneficiary and Grantor hereby
designates Beneficiary as its attorney-in-fact for the purpose of
making any election required or permitted under any insurance policy
relating to repair or restoration. The insurance proceeds or any part
thereof received by Beneficiary may be applied by Beneficiary toward
reimbursement of all costs and expenses of Beneficiary in collecting
such proceeds, and the balance shall be advanced to Grantor for the
repair
11
and restoration of the Trust Property in accordance with the
provisions of the Section of this Deed of Trust entitled
"Restoration". Grantor shall be obligated to use such proceeds to
restore or repair the Trust Property.
(iv) If the Trust Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds $15,000,000, or
if an Event of Default shall have occurred and be continuing, then
Grantor authorizes and empowers Beneficiary, at Beneficiary's option
and in Beneficiary's sole discretion, as attorney-in-fact for Grantor,
to make proof of loss, to adjust and compromise any claim under any
insurance policy, to appear in and prosecute any action arising from
any policy, to collect and receive insurance proceeds and to deduct
therefrom Beneficiary's expenses incurred in the collection process.
Each insurance company concerned is hereby authorized and directed to
make payment for such loss directly to Beneficiary. Beneficiary shall
have the right to require Grantor to repair or restore the Trust
Property and Grantor hereby designates Beneficiary as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to repair or
restoration. The insurance proceeds or any part thereof received by
Beneficiary may be applied by Beneficiary toward reimbursement of all
costs and expenses of Beneficiary in collecting such proceeds, and the
balance, may be applied, at Beneficiary's sole option and in its sole
and absolute discretion, to fulfill any other Obligation of Grantor,
towards the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.11(d), to the
restoration or repair of the property damaged (and if Grantor shall
require Beneficiary to repair or restore the Trust Property, such
balance shall be advanced to Grantor in accordance with the provisions
of the Section of this Deed of Trust entitled "Restoration") or
released to Grantor. In the event Beneficiary releases such proceeds
to Grantor, Grantor shall be obligated to use such proceeds to restore
or repair the Trust Property.
(g) In the event of foreclosure of this Deed of Trust or
other transfer of title to the Trust Property in extinguishment of the
Indebtedness, all right, title and interest of Grantor in and to any insurance
policies then in force shall pass to the purchaser or grantee and Grantor
hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to assign
and transfer all such policies and proceeds to such purchaser or grantee.
(h) Upon written notice to Grantor, Beneficiary after an
Event of Default shall be entitled to require Grantor to pay monthly in advance
to Beneficiary the equivalent of 1/12th of the estimated annual premiums due on
such insurance. Beneficiary may commingle such funds with its own funds and
Grantor shall not be entitled to interest thereon. Any funds so collected by
Beneficiary shall be used to pay insurance premiums as they become due.
(i) Grantor may maintain insurance required under this
Deed of Trust by means of one or more blanket insurance policies maintained by
Grantor; provided, however, that (A) any such policy shall specify, or Grantor
shall furnish to Beneficiary a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Trust Property and any
sublimits in such blanket policy applicable to the Premises and the other Trust
Property, (B) each such blanket policy shall include an endorsement providing
that, in the event
12
of a loss resulting from an insured peril, insurance proceeds shall be
allocated to the Trust Property in an amount equal to the coverages required to
be maintained by Grantor as provided above and (C) the protection afforded
under any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Trust
Property.
vi. Maintenance; No Alteration; Inspection; Utilities.
(a) Subject to the provisions of Section 6.5 of the Credit Agreement and
Section 5(f) of this Deed of Trust, (i) Grantor shall maintain or cause to be
maintained all the Improvements in good condition and repair, ordinary wear and
tear excepted and shall not commit or suffer any waste of the Improvements,
(ii) Grantor shall repair, restore, replace or rebuild promptly any part of
the Premises which may be damaged or destroyed by any casualty whatsoever and
(iii) the Improvements shall not be demolished in whole or in any material part
without the prior written consent of Beneficiary, which consent shall not be
unreasonably withheld.
(b) At any reasonable time and as often as may be reasonably
desired, Beneficiary and any persons authorized by Beneficiary shall have the
right to enter and inspect the Premises and the right to inspect all work done,
labor performed and materials furnished in and about the Improvements.
vii. Condemnation/Eminent Domain. Immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Trust Property, or any portion thereof, Grantor will notify Beneficiary
of the pendency of such proceedings. Grantor authorizes Beneficiary, at
Beneficiary's option and in Beneficiary's reasonable discretion, as
attorney-in-fact for Grantor, to commence, appear in and prosecute, in
Beneficiary's or Grantor's name, any action or proceeding relating to any
condemnation of the Trust Property, or any portion thereof, and to settle or
compromise any claim in connection with such condemnation. If Beneficiary
elects not to participate in such condemnation proceeding, then Grantor shall,
at its expense, diligently prosecute any such proceeding and shall consult with
Beneficiary, its attorneys and experts and cooperate with them in any defense
of any such proceedings. All awards and proceeds of condemnation shall be
assigned to Beneficiary to be applied in the same manner as insurance proceeds,
as provided above, and Grantor agrees to execute any such assignments of all
such awards as Beneficiary may request.
viii. Restoration. If Beneficiary shall release funds to
Grantor for restoration of any of the Trust Property, then such restoration
shall be performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the
plans and specifications for such restoration, and the budgeted costs,
shall be submitted to and approved by Beneficiary in its reasonable
discretion;
(ii) prior to making any advance of restoration funds,
Beneficiary shall be satisfied that the remaining restoration funds
are sufficient to complete the restoration and to pay all related
expenses, including interest on the Indebtedness and real estate taxes
on the Premises, during restoration;
13
(iii) at the time of any disbursement of the restoration
funds, (A) no Default (as defined below) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds or which are being contested in good faith
by appropriate proceedings and for which Grantor has posted a bond in
the amount of the lien which is being contested and (C) a satisfactory
bring-down or continuation of title insurance on the Premises shall be
delivered to Beneficiary;
(iv) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage of
completion and of performance of the work in a good and workmanlike
manner and in accordance with the contracts, plans and specifications
acceptable to Beneficiary;
(v) with respect to each advance of restoration funds,
Beneficiary may retain 10% of the amount of such advance as a holdback
until the restoration is fully completed;
(vi) the restoration funds shall bear no interest and may
be commingled with Beneficiary's other funds;
(vii) Beneficiary may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be released to
Grantor so long as no Event of Default shall have occurred and be
continuing.
ix. Leases. Except as may be expressly permitted under
the Credit Agreement, Grantor shall not (i) execute an assignment or pledge of
any Lease relating to all or any portion of the Trust Property other than in
favor of Beneficiary, or (ii) without the prior written consent of Beneficiary,
execute or permit to exist any Lease of any of the Trust Property.
(ii) Grantor shall deliver to Beneficiary, within 10 days
after a request by Beneficiary, a written statement, certified by Grantor as
being true, correct and complete, containing the names of all lessees and other
occupants of the Trust Property, the terms of all Leases and the spaces
occupied and rentals payable thereunder, and a list of all Leases which are
then in default, including the nature and magnitude of the default; such
statement shall be accompanied by credit information with respect to the
lessees and such other information as Beneficiary may request.
(iii) All Leases entered into by Grantor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Deed of Trust
unless Beneficiary shall otherwise elect in writing.
(iv) In the event of the enforcement by Beneficiary of any
remedy under this Deed of Trust, the lessee under each Lease shall, if
requested by Beneficiary or any other person succeeding to the interest of
Beneficiary as a result of such enforcement, attorn to Beneficiary or to such
person and shall
14
recognize Beneficiary or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Beneficiary or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Beneficiary or such
successor in interest; (iii) liable for any previous act or omission of Grantor
(or its predecessors in interest); (iv) responsible for any monies owing by
Grantor to the credit of such lessee or subject to any credits, offsets,
claims, counterclaims, demands or defenses which the lessee may have against
Grantor (or its predecessors in interest); (v) bound by any covenant to
undertake or complete any construction of the Premises or any portion thereof;
or (vi) obligated to make any payment to such lessee other than any security
deposit actually delivered to Beneficiary or such successor in interest. Each
lessee or other occupant, upon request by Beneficiary or such successor in
interest, shall execute and deliver an instrument or instruments confirming
such attornment. In addition, Grantor agrees that each Lease entered into
after the date of this Deed of Trust shall include language to the effect of
subsections (c) and (d) of this Section; provided that the provisions of such
subsections shall be self-operative and any failure of any Lease to include
such language shall not impair the binding effect of such provisions on any
lessee under such Lease.
x. Further Assurances/Estoppel Certificates. To further
assure Beneficiary's and Trustee's rights under this Deed of Trust, Grantor
agrees upon demand of Beneficiary or Trustee to do any act or execute any
additional documents (including, but not limited to, security agreements on any
personalty included or to be included in the Trust Property and a separate
assignment of each Lease in recordable form) as may be reasonably required by
Beneficiary or Trustee to confirm the rights or benefits conferred on
Beneficiary or Trustee by this Deed of Trust. Grantor, within 5 business days
after request, shall deliver, in form and substance satisfactory to
Beneficiary, a written statement, duly acknowledged, setting forth the amount
of the Indebtedness, and whether any offsets, claims, counterclaims or defenses
exist against the Indebtedness and certifying as to such other matters as
Beneficiary shall reasonably request.
xi. Beneficiary's Right to Perform. If Grantor fails to
perform any of the covenants or agreements of Grantor, Beneficiary or Trustee,
without waiving or releasing Grantor from any obligation or default under this
Deed of Trust, may, at any time (but shall be under no obligation to) pay or
perform the same after five (5) days' notice to Grantor, and the amount or cost
thereof, with interest at the Default Rate, shall immediately be due from
Grantor to Beneficiary or Trustee (as the case may be) and the same shall be
secured by this Deed of Trust and shall be an encumbrance on the Trust Property
prior to any right, title to, interest in or claim upon the Trust Property
attaching subsequent to the date of this Deed of Trust. No payment or advance
of money by Beneficiary or Trustee under this Section shall be deemed or
construed to cure Grantor's default or waive any right or remedy of Beneficiary
or Trustee.
xii. Grantor's Existence, etc. Grantor shall do all
things necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state in which it was
formed and its right to own property and transact business in the State of
Texas. Grantor represents and warrants that Grantor is a duly organized and
validly existing corporation in good standing, and this Deed of Trust has been
executed by a duly authorized officer thereof. This Deed of Trust constitutes
the legal, valid and binding obligation of Grantor, enforceable against Grantor
in accordance with its terms,
15
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
xiii. Events of Default. The occurrence of any one or more
of the following events shall constitute an Event of Default hereunder:
(i) an Event of Default under the Credit Agreement; or
(ii) a failure to make payment of any other sums required
to be paid hereunder or under the Loan Documents (including, without
limitation, any Imposition) within the period required by specific
provision of this Deed of Trust or the relevant Loan Document or, if
no such period is so provided, by no later than three days after
written notice from Beneficiary; or
(iii) a failure (i) to keep in force the insurance required
by this Deed of Trust; or (ii) to comply with and conform to all
provisions and requirements of the insurance policies and the insurers
thereunder which affects Grantor's ability (A) to keep in force the
insurance required by this Deed of Trust or (B) to collect any
proceeds therefrom unless, provided that Grantor shall have given
Beneficiary prompt notice of such failure, Beneficiary shall
reasonably determine the aggregate amount of proceeds which would have
been collectable but for any such failure to be less than
$10,000,000.00; or (iii) to comply with any other material provisions
of this Deed of Trust regarding insurance; or
(iv) except for the lien of this Deed of Trust and the
Permitted Exceptions, if Grantor shall further mortgage, or otherwise
encumber the Trust Property or create or suffer to exist any lien,
charge or encumbrance on the Trust Property, or any part thereof,
whether superior or subordinate to the lien of this Deed of Trust and
whether recourse or non-recourse, except as may be expressly permitted
under the Credit Agreement; or
(v) except as may be expressly permitted under the Credit
Agreement, if Grantor shall sell, transfer, convey or assign all or
any portion of, or any interest in, the Trust Property.
xiv. Remedies. Upon the occurrence of any Event of
Default, in addition to any other rights and remedies Beneficiary may have
pursuant to the Loan Documents, or as provided by law, and without limitation:
(a) (1) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) of the Section of the Credit Agreement
entitled "Events of Default", automatically the Indebtedness (together with
accrued interest thereon) and all other amounts payable under the Notes, this
Deed of Trust and the other Security Documents immediately shall become due and
payable, and (2) if such event is any other Event of Default, by notice to
Grantor, Beneficiary may declare the Indebtedness (together with accrued
interest thereon) and all other amounts payable under the Notes, this Deed of
Trust and the other Security Documents to be immediately due and payable.
Except as expressly provided above in this Section, notice of intention to
accelerate, notice of acceleration, presentment, demand, protest and all other
16
notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Beneficiary may immediately take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against Grantor and in and to the Trust Property, including, but not
limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such manner as Beneficiary may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary:
(i) Beneficiary may direct Trustee to sell or offer for
sale the Trust Property in such portions, order and parcels as
Beneficiary may determine, with or without having first taken
possession of the same, to the highest bidder for cash at public
auction. Such sale shall be made at the courthouse of the County
wherein the Real Estate (or any of that portion thereof to be sold) is
situated (whether the parts or parcels thereof, if any, in different
counties are contiguous or not, and without the necessity of having
any personal property hereby mortgaged present at such sale) on the
first Tuesday of any month between the hours of 10:00 a.m. and 4:00
p.m. after posting a written or printed notice or notices of the
place, time and terms of the sale of the Trust Property for twenty-one
(21) days prior to the date of the sale at the courthouse door of the
county in which the sale is to be made and at the courthouse door of
any other county in which a portion of the Trust Property may be
situated and filing a copy of such notice(s) in the office of the
county clerk in each of such counties, and by serving written notice
of the proposed sale at least twenty-one (21) days preceding the date
of sale by certified mail on Grantor and on each debtor obligated to
pay the Indebtedness according to the records of the Beneficiary. It
is agreed that the posting and transmittal of notices may be performed
by the Trustee, Beneficiary, or by any person acting for them.
Applicable notices and the sale shall be accomplished by following the
procedures permitted or required by Tex. Prop. Code Ann. 51.002
(Vernon 1984), as same may be amended from time to time, relating to
the sale of real estate and/or by Chapter 9 of the Texas Uniform
Commercial Code relating to the sale of personal property collateral
after default by a debtor (as said Section and Chapter may now exist
or may hereafter be amended or succeeded), or by any other present or
subsequent articles or enactments relating to the same. Nothing
contained in this subsection (i) shall be construed to limit in any
way Trustee's rights to sell the Trust Property by private sale if,
and to the extent, that such private sale is permitted under the laws
of the State of Texas or by public or private sale after entry of
judgment by any court of competent jurisdiction ordering the same. At
any such sale (i) whether made under power herein contained, the
aforesaid 51.002, the Texas Uniform Commercial Code, any other legal
requirement or by virtue of any judicial procedure or any other legal
right, remedy or recourse, it shall not be necessary for Trustee to
have physically present, or to have constructive possession of, the
Trust Property (Grantor hereby covenanting and agreeing to deliver to
Trustee any portion of the Trust Property not actually or
constructively possessed by Trustee immediately upon demand by
Trustee), and the title to and right of possession of any such
property shall pass to the purchaser thereof as completely as if the
same had been actually present and delivered to purchaser at such
sale, (ii) each instrument of conveyance executed by Trustee shall
contain a special warranty of title, subject to Permitted
Encumbrances, binding upon Grantor, (iii) each and every recital
contained in any instrument of conveyance made by Trustee shall be
prima facie proof of the truth and accuracy of the matters recited
therein, including, without limitation, nonpayment of the
Indebtedness, advertisement and
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conduct of such sale in the manner provided herein and otherwise by
law and appointment of any successor Trustee hereunder, (iv) there
shall be a prima facie presumption that any and all prerequisites to
the validity thereof shall have been performed, (v) the receipt of
Trustee or of such other party or officer making the sale shall be a
sufficient discharge to the purchaser or purchasers for his or their
purchase money and no such purchaser or purchasers, or his or their
assigns or personal representatives, shall thereafter be obligated to
see to the application of such purchase money or be in any way
answerable for any loss, misapplication or nonapplication thereof,
(vi) to the fullest extent permitted by law, Grantor shall be
completely and irrevocably divested of all of its right, title,
interest, claim and demand whatsoever, either at law or in equity, in
and to the property sold and such sale shall be a perpetual bar, both
at law and in equity, against Grantor, and against any and all other
persons claiming or to claim the property sold or any part thereof,
by, through or under Grantor, and (vii) to the extent and under such
circumstances as are permitted by law, Beneficiary may be a purchaser
at any such sale;
(ii) Beneficiary may, to the extent permitted by
applicable law, (A) institute and maintain an action of judicial
foreclosure against all or any part of the Trust Property, (B)
institute and maintain an action on the Notes, or (C) take such other
action at law or in equity for the enforcement of this Deed of Trust
or any of the Loan Documents as the law may allow. Beneficiary may
proceed in any such action to final judgment and execution thereon for
all sums due hereunder, together with interest thereon at the Default
Rate and all costs of suit, including, without limitation, reasonable
attorneys' fees and disbursements. Interest at the Default Rate shall
be due on any judgment obtained by Beneficiary from the date of
judgment until actual payment is made of the full amount of the
judgment.
(iii) Beneficiary may personally, or by its agents,
attorneys and employees and without regard to the adequacy or
inadequacy of the Trust Property or any other collateral as security
for the Indebtedness and Obligations enter into and upon the Trust
Property and each and every part thereof and exclude Grantor and its
agents and employees therefrom without liability for trespass, damage
or otherwise (Grantor hereby agreeing to surrender possession of the
Trust Property to Beneficiary upon demand at any such time) and use,
operate, manage, maintain and control the Trust Property and every
part thereof. Following such entry and taking of possession,
Beneficiary shall be entitled, without limitation, (x) to lease all or
any part or parts of the Trust Property for such periods of time and
upon such conditions as Beneficiary may, in its discretion, deem
proper, (y) to enforce, cancel or modify any Lease and (z) generally
to execute, do and perform any other act, deed, matter or thing
concerning the Trust Property as Beneficiary shall deem appropriate as
fully as Grantor might do.
(b) Beneficiary, in any action to foreclose this Deed of
Trust in a judicial procedure or in connection with the exercise of any
non-judicial power of sale by Trustee, shall be entitled to the appointment of
a receiver. In case of a trustee's sale or foreclosure sale, the Real Estate
may be sold, at Beneficiary's election, in one parcel or in more than one
parcel and Beneficiary is specifically empowered (without being required to do
so, and in its sole and absolute discretion) to cause successive sales of
portions of the Trust Property to be held.
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(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Deed of Trust, and
notwithstanding to the contrary any exculpatory or non-recourse language which
may be contained herein, Beneficiary or Trustee shall be entitled to enjoin
such breach and obtain specific performance of any covenant, agreement, term or
condition and Beneficiary and Trustee shall have the right to invoke any
equitable right or remedy as though other remedies were not provided for in
this Deed of Trust.
(d) Following any sale of the Trust Property, or any part
hereof, under the provisions of this instrument, all persons and parties in
possession of the property sold shall be divested of any and all interest in
and claim to the Trust Property, and shall be obligated to immediately vacate
the premises, and prior to such vacation shall be tenants at sufferance of the
purchaser of the property sold and shall be subject to eviction in an action of
forcible detainer; provided, the provisions of this subparagraph shall be
subject to any agreements made in writing by Beneficiary with reference to any
existing and/or future leases; provided, further, the purchaser at any
foreclosure sale shall have the option but not the obligation to affirm any
then existing leases or tenancies or otherwise succeed to the rights of Grantor
thereunder.
xv. Right of Beneficiary to Credit Sale. Upon the
occurrence of any sale made under this Deed of Trust, whether made under the
power of sale or by virtue of judicial proceedings or of a judgment or decree
of foreclosure and sale, Beneficiary may bid for and acquire the Trust Property
or any part thereof. In lieu of paying cash therefor, Beneficiary may make
settlement for the purchase price by crediting upon the Indebtedness or other
sums secured by this Deed of Trust the net sales price after deducting
therefrom the expenses of sale and the cost of the action and any other sums
which Beneficiary is authorized to deduct under this Deed of Trust. In such
event, this Deed of Trust, the Notes and documents evidencing expenditures
secured hereby may be presented to the person or persons conducting the sale in
order that the amount so used or applied may be credited upon the Indebtedness
as having been paid.
xvi. Appointment of Receiver. If an Event of Default
shall have occurred and be continuing, Beneficiary as a matter of right and
without notice to Grantor, unless otherwise required by applicable law, and
without regard to the adequacy or inadequacy of the Trust Property or any other
collateral as security for the Indebtedness and Obligations or the interest of
Grantor therein, shall have the right to apply to any court having jurisdiction
to appoint a receiver or receivers or other manager of the Trust Property, and
Grantor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Beneficiary in case of entry as
provided in this Deed of Trust, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Trust Property, and shall continue as such and exercise all such powers until
the date of confirmation of sale of the Trust Property unless such receivership
is sooner terminated.
xvii. Extension, Release, etc. (a) Without affecting the
encumbrance or charge of this Deed of Trust upon any portion of the Trust
Property not then or theretofore released as security for the full amount of
the Indebtedness, Beneficiary may, from time to time and without notice, agree
to (i) release
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any person liable for the Indebtedness, (ii) extend the maturity or alter any
of the terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Beneficiary's option any parcel, portion or all of the Trust
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall
secure less than all of the principal amount of the Indebtedness, it is
expressly agreed that any repayments of the principal amount of the
Indebtedness shall not reduce the amount of the encumbrance of this Deed of
Trust until the encumbrance amount shall equal the principal amount of the
Indebtedness outstanding.
(b) No recovery of any judgment by Beneficiary and no
levy of an execution under any judgment upon the Trust Property or upon any
other property of Grantor shall affect the encumbrance of this Deed of Trust or
any liens, rights, powers or remedies of Beneficiary or Trustee hereunder, and
such liens, rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this
Deed of Trust or to direct the Trustee to exercise its power of sale, Grantor
authorizes Beneficiary at its option to foreclose the lien of this Deed of
Trust (or direct the Trustee to sell the Trust Property, as the case may be)
subject to the rights of any tenants of the Trust Property. The failure to
make any such tenants parties defendant to any such foreclosure proceeding and
to foreclose their rights, or to provide notice to such tenants as required in
any statutory procedure governing a sale of the Trust Property by Trustee, or
to terminate such tenant's rights in such sale will not be asserted by Grantor
as a defense to any proceeding instituted by Beneficiary to collect the
Indebtedness or to foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event
that Beneficiary's interest in this Deed of Trust and title to the Trust
Property or any estate therein shall become vested in the same person or
entity, this Deed of Trust shall not merge in such title but shall continue as
a valid charge on the Trust Property for the amount secured hereby.
xvii. Security Agreement under Uniform Commercial Code.
(a) It is the intention of the parties hereto that this Deed of Trust shall
constitute a Security Agreement within the meaning of the Uniform Commercial
Code (the "CODE") of the State of Texas. If an Event of Default shall occur
under this Deed of Trust, then in addition to having any other right or remedy
available at law or in equity, Beneficiary shall have the option of either (i)
proceeding under the Code and exercising such rights and remedies as may be
provided to a secured party by the Code with respect to all or any portion of
the Trust Property which is personal property (including, without limitation,
taking possession of and selling such property) or (ii) treating such property
as real property and proceeding with respect to both the real and personal
property constituting the Trust Property in accordance with Beneficiary's
rights, powers and remedies with respect to the real property (in which event
the default provisions of the Code shall not apply). If Beneficiary shall
elect to proceed under the Code, then five days' notice of sale of the personal
property shall be deemed reasonable notice and the reasonable expenses of
retaking, holding, preparing for sale, selling and the like incurred by
Beneficiary shall include, but not be limited to, attorneys' fees and legal
expenses. At Beneficiary's request, Grantor shall assemble the personal
property and make it available to Beneficiary at a place designated by
Beneficiary which is reasonably convenient to both parties.
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(b) Grantor and Beneficiary agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing"
within the meaning of Sections 9-313 and 9-402 of the Code; (iii) Grantor is
the record owner of the Real Estate; and (iv) the addresses of Grantor and
Beneficiary are as set forth on the first page of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time,
shall execute, acknowledge and deliver to Beneficiary one or more separate
security agreements, in form satisfactory to Beneficiary, covering all or any
part of the Trust Property and will further execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as
Beneficiary may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Deed of Trust and
such security instrument. Grantor further agrees to pay to Beneficiary on
demand all costs and expenses incurred by Beneficiary in connection with the
preparation, execution, recording, filing and re-filing of any such document
and all reasonable costs and expenses of any record searches for financing
statements Beneficiary shall reasonably require. Grantor shall from time to
time, on request of Beneficiary, deliver to Beneficiary an inventory in
reasonable detail of any of the Trust Property which constitutes personal
property. If Grantor shall fail to furnish any financing or continuation
statement within 10 days after request by Beneficiary, then pursuant to the
provisions of the Code, Grantor hereby authorizes Beneficiary, without the
signature of Grantor, and hereby irrevocably appoints and constitutes
Beneficiary as its true and lawful attorney-in-fact, which appointment is
coupled with an interest, in its name, place and stead to execute and file any
such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or
chattels shall not be construed as in any way impairing the right of
Beneficiary to proceed against any personal property encumbered by this Deed of
Trust as real property, as set forth above.
xix. Assignment of Rents. (a) Grantor hereby assigns to
Beneficiary, the Rents as further security for the payment of the Indebtedness
and performance of the Obligations, and Grantor grants to Beneficiary the right
to enter the Trust Property for the purpose of collecting the same and to let
the Trust Property or any part thereof, and to apply the Rents on account of
the Indebtedness. The foregoing assignment and grant is present and absolute
and shall continue in effect until the Indebtedness is paid in full, but
Beneficiary and Trustee hereby waive the right to enter the Trust Property for
the purpose of collecting the Rents and Grantor shall be entitled to collect,
receive, use and retain the Rents until the occurrence of an Event of Default
under this Deed of Trust; such right of Grantor to collect, receive, use and
retain the Rents may be revoked by Beneficiary upon the occurrence of any Event
of Default under this Deed of Trust by giving not less than five days' written
notice of such revocation to Grantor; in the event such notice is given,
Grantor shall pay over to Beneficiary, or to any receiver appointed to collect
the Rents, any lease security deposits, and shall pay monthly in advance to
Beneficiary, or to any such receiver, the fair and reasonable rental value as
determined by Beneficiary for the use and occupancy of the Trust Property or of
such part thereof as may be in the possession of Grantor or any affiliate of
Grantor, and upon default in any such payment Grantor and any such affiliate
will vacate and surrender the possession of the Trust Property to Beneficiary
or to such receiver, and in default thereof may be
21
evicted by summary proceedings or otherwise. Grantor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any).
(b) Beneficiary's acceptance of this assignment shall
not, prior to entry upon and taking possession of the Trust Property by
Beneficiary, be deemed to constitute Beneficiary a "mortgagee in possession",
nor obligate Beneficiary to appear in or defend any proceeding relating to any
of the Leases or to the Trust Property, take any action hereunder, expend any
money, incur any expenses, or perform any obligation or liability under the
Leases, or assume any obligation for any deposits delivered to Grantor by any
tenant and not delivered to Beneficiary, or render Beneficiary liable for any
injury or damage to person or property in or about the Trust Property. Neither
the collection of Rents due under the Leases herein described, nor possession
of the Trust Property by Beneficiary under any of the circumstances set forth
herein shall render Beneficiary liable with respect to any obligations of
Grantor to any tenant or subtenant under said Leases, such liability to arise
only with respect to a party purchasing the Trust Property at a foreclosure
sale or receiving a deed covering the Trust Property in lieu of foreclosure and
then to arise only with respect to obligations accruing subsequent to such
foreclosure sale or deed in lieu thereof.
(c) By Beneficiary's acceptance of this Deed of Trust, it
is understood and agreed that a full and complete release of this Deed of Trust
shall operate as a full and complete reassignment to Grantor of the
Beneficiary's rights and interests under this Section.
(d) All provisions hereof shall inure to the benefit of
and all actions authorized hereunder shall be exercisable by the Trustee or the
Substitute Trustee at Beneficiary's request.
xx. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other
funds of Grantor. Within 10 days after request by Beneficiary, Grantor shall
furnish Beneficiary satisfactory evidence of compliance with this subsection,
together with a statement of all lease security deposits by lessees and copies
of all Leases not previously delivered to Beneficiary, which statement shall be
certified by Grantor.
xxi. Additional Rights. The holder of any subordinate
lien or subordinate deed of trust on the Trust Property shall have no right to
terminate any Lease whether or not such Lease is subordinate to this Deed of
Trust nor shall any holder of any subordinate lien or subordinate deed of trust
join any tenant under any Lease in any trustee's sale or action to foreclose
the lien or modify, interfere with, disturb or terminate the rights of any
tenant under any Lease. By recordation of this Deed of Trust all subordinate
lienholders and the trustees and beneficiaries under subordinate deeds of trust
are subject to and notified of this provision, and any action taken by any such
lienholder or trustee or beneficiary contrary to this provision shall be null
and void. Upon the occurrence of any Event of Default, Beneficiary may, in its
sole discretion and without regard to the adequacy of its security under this
Deed of Trust, apply all or any part of any amounts on deposit with Beneficiary
under this Deed of Trust against all or any part of the Indebtedness. Any such
application shall not be construed to cure or waive any Default or Event of
Default or invalidate any act taken by Beneficiary on account of such Default
or Event of Default.
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xxii. Changes in Method of Taxation. In the event of the
passage after the date hereof of any law of any Governmental Authority
deducting from the value of the Premises for the purposes of taxation any lien
or deed of trust thereon, or changing in any way the laws for the taxation of
mortgages or deeds of trust or debts secured thereby for federal, state or
local purposes, or the manner of collection of any such taxes, and imposing a
tax, either directly or indirectly, on mortgages or deeds of trust or debts
secured thereby, the holder of this Deed of Trust shall have the right to
declare the Indebtedness due on a date to be specified by not less than 30
days' written notice to be given to Grantor unless within such 30-day period
Grantor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment of the Indebtedness and such assumption shall be
permitted by law.
xxiii. Notices. All notices, requests, demands and other
communications hereunder shall be given in the manner set forth in the Credit
Agreement, addressed to Grantor at the address given on the first page of this
Deed of Trust, to Beneficiary at the address given on the first page of this
Deed of Trust and to Trustee at the address given on the first page of this
Deed of Trust. Any party may change its address by notice to the other party.
If any party other than Grantor shall be entitled to receive copies of notices,
demands or approvals, failure of Beneficiary or Trustee to send such copies
shall not impair the effectiveness of any notice sent to Grantor.
xxiv. No Oral Modification. This Deed of Trust may not be
changed or terminated orally. Any agreement made by Grantor and Beneficiary
after the date of this Deed of Trust relating to this Deed of Trust shall be
superior to the rights of the holder of any intervening or subordinate deed of
trust, lien or encumbrance. Trustee's execution of any written agreement
between Grantor and Beneficiary shall not be required for the effectiveness
thereof as between Grantor and Beneficiary.
xxv. Partial Invalidity. In the event any one or more of
the provisions contained in this Deed of Trust shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, but
each shall be construed as if such invalid, illegal or unenforceable provision
had never been included. Notwithstanding to the contrary anything contained in
this Deed of Trust or in any provisions of the Indebtedness or Loan Documents,
the obligations of Grantor and of any other obligor under the Indebtedness or
Loan Documents shall be subject to the limitation that Beneficiary shall not
charge, take or receive, nor shall Grantor or any other obligor be obligated to
pay to Beneficiary, any amounts constituting interest in excess of the maximum
rate permitted by law to be charged by Beneficiary.
xxvi. Grantor's Waiver of Rights. To the fullest extent
permitted by law, Grantor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Trust Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Trust Property from attachment, levy or sale under execution
or exemption from civil process. To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Deed of Trust before exercising any other remedy granted
hereunder and
23
Grantor, for Grantor and its successors and assigns, and for any and all
persons ever claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of exercise by Trustee or Beneficiary of the power of sale or other rights
hereby created.
xxvii. Remedies Not Exclusive. Beneficiary and Trustee
shall be entitled to enforce payment of the Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Deed of Trust or
under any of the other Loan Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Indebtedness and
Obligations may now or hereafter be otherwise secured, whether by deed of
trust, mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Deed of Trust nor its enforcement, shall
prejudice or in any manner affect Beneficiary's or Trustee's right to realize
upon or enforce any other security now or hereafter held by Beneficiary or
Trustee, it being agreed that Beneficiary and Trustee shall be entitled to
enforce this Deed of Trust and any other security now or hereafter held by
Beneficiary or Trustee in such order and manner as Beneficiary may determine in
its absolute discretion. No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy herein
or by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the Loan
Documents to Beneficiary or Trustee or to which either may otherwise be
entitled, may be exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by Beneficiary or Trustee, as the case
may be. In no event shall Beneficiary or Trustee, in the exercise of the
remedies provided in this Deed of Trust (including, without limitation, in
connection with the assignment of Rents, or the appointment of a receiver and
the entry of such receiver on to all or any part of the Trust Property), be
deemed a "mortgagee in possession," and neither Beneficiary nor Trustee shall
in any way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies.
xxviii. Multiple Security. If (a) the Premises shall consist
of one or more parcels, whether or not contiguous and whether or not located in
the same county, or (b) in addition to this Deed of Trust, Beneficiary shall
now or hereafter hold or be the beneficiary of one or more additional
mortgages, liens, deeds of trust or other security (directly or indirectly) for
the Indebtedness upon other property in the State of Texas (whether or not such
property is owned by Grantor or by others) or (c) both the circumstances
described in clauses (a) and (b) shall be true, then to the fullest extent
permitted by law, Beneficiary may, at its election, commence or consolidate in
a single trustee's sale or foreclosure action all trustee's sale or foreclosure
proceedings against all such collateral securing the Indebtedness (including
the Trust Property), which action may be brought or consolidated in the courts
of, or sale conducted in, any county in which any of such collateral is
located. Grantor acknowledges that the right to maintain a consolidated
trustee's sale or foreclosure action is a specific inducement to Beneficiary to
extend the Indebtedness, and Grantor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have. Grantor
further agrees that if Trustee or Beneficiary shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Trust Property
24
or against any collateral other than the Trust Property, which collateral
directly or indirectly secures the Indebtedness, or if Beneficiary shall have
obtained a judgment of foreclosure and sale or similar judgment against such
collateral (or, in the case of a trustee's sale, shall have met the statutory
requirements therefor with respect to such collateral), then, whether or not
such proceedings are being maintained or judgments were obtained in or outside
the State in which the Premises are located, Beneficiary may commence or
continue any trustee's sale or foreclosure proceedings and exercise its other
remedies granted in this Deed of Trust against all or any part of the Trust
Property and Grantor waives any objections to the commencement or continuation
of a foreclosure of this Deed of Trust or exercise of any other remedies
hereunder based on such other proceedings or judgments, and waives any right to
seek to dismiss, stay, remove, transfer or consolidate either any action under
this Deed of Trust or such other proceedings on such basis. The commencement
or continuation of proceedings to sell the Trust Property in a trustee's sale,
to foreclose this Deed of Trust or the exercise of any other rights hereunder
or the recovery of any judgment by Beneficiary or the occurrence of any sale by
the Trustee in any such proceedings shall not prejudice, limit or preclude
Beneficiary's right to commence or continue one or more trustee's sales,
foreclosure or other proceedings or obtain a judgment against (or, in the case
of a trustee's sale, to meet the statutory requirements for, any such sale of)
any other collateral (either in or outside the State in which the Real Estate
is located) which directly or indirectly secures the Indebtedness, and Grantor
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other sales or proceedings or exercise of any
remedies in such sales or proceedings based upon any action or judgment
connected to this Deed of Trust, and Grantor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other sales or
proceedings or any sale or action under this Deed of Trust on such basis. It
is expressly understood and agreed that to the fullest extent permitted by law,
Beneficiary may, at its election, cause the sale of all collateral which is the
subject of a single trustee's sale or foreclosure action at either a single
sale or at multiple sales conducted simultaneously and take such other measures
as are appropriate in order to effect the agreement of the parties to dispose
of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
xxix. Expenses; Indemnification. If (i) any sale (or any
prerequisite to a sale), action or proceeding shall be commenced by Beneficiary
or Trustee (including but not limited to any sale of the Trust Property, or any
action to foreclose this Deed of Trust or to collect the Indebtedness), or any
action or proceeding is commenced to which Beneficiary or Trustee is made a
party, or in which it becomes necessary to defend or uphold the rights granted
by this Deed of Trust (including, without limitation, any proceeding or other
action relating to the bankruptcy, insolvency or reorganization of any obligor
with respect to any Guarantee Obligation), or in which Beneficiary or Trustee
is served with any legal process, discovery notice or subpoena and (ii) in each
of the foregoing instances such action or proceeding in any manner relates to
or arises out of this Deed of Trust or Beneficiary's lending to Grantor or
acceptance of a guaranty from any guarantor of the Indebtedness or of any of
the Obligations or any of the transactions contemplated by this Deed of Trust,
then Grantor will immediately reimburse or pay to Beneficiary and Trustee all
of the expenses which have been or may be incurred by Beneficiary and Trustee,
respectively, with respect to the foregoing (including reasonable counsel fees
and disbursements), together with interest thereon at the Default Rate, and any
such sum and the interest thereon shall be included in the Indebtedness and
have the full benefit of this Deed of Trust, prior to any right, or title to,
interest in or claim upon the
25
Trust Property attaching or accruing to this Deed of Trust, and shall be deemed
to be secured by this Deed of Trust. In any action or proceeding to sell the
Trust Property, to foreclose this Deed of Trust, or to recover or collect the
Indebtedness, the provisions of law respecting the recovering of costs,
disbursements and allowances shall prevail unaffected by this covenant.
(ii) Grantor shall indemnify and hold harmless each of
Beneficiary and Trustee and each of their respective affiliates, and the
respective directors, officers, agents and employees of each of Beneficiary and
Trustee and each of their respective affiliates from and against all claims,
damages, losses and liabilities (including, without limitation, reasonable
attorneys' fees and expenses) arising out of or based upon any matter related
to this Deed of Trust, the Trust Property or the occupancy, ownership,
maintenance or management of the Trust Property by Grantor, including, without
limitation, any claims based on the alleged acts or omissions of any employee
or agent of Grantor. This indemnification shall be in addition to any other
liability which Grantor may otherwise have to Beneficiary or Trustee.
xxx. Successors and Assigns. All covenants of Grantor
contained in this Deed of Trust are imposed solely and exclusively for the
benefit of Beneficiary and Trustee and their respective successors and assigns,
and no other person or entity shall have standing to require compliance with
such covenants or be deemed, under any circumstances, to be a beneficiary of
such covenants, any or all of which may be freely waived in whole or in part by
Beneficiary or Trustee at any time if in the sole discretion of either of them
such waiver is deemed advisable. All such covenants of Grantor shall run with
the land and bind Grantor, the successors and assigns of Grantor (and each of
them) and all subsequent owners, encumbrancers and tenants of the Trust
Property, and shall inure to the benefit of Beneficiary, Trustee and their
respective successors and assigns. Without limiting the generality of the
foregoing, any successor to Trustee appointed by Beneficiary shall succeed to
all rights of Trustee as if such successor had been originally named as Trustee
hereunder. The word "Grantor" shall be construed as if it read "Grantors"
whenever the sense of this Deed of Trust so requires and if there shall be more
than one Grantor, the obligations of the Grantors shall be joint and several.
xxxi. No Waivers, etc. Any failure by Beneficiary to
insist upon the strict performance by Grantor of any of the terms and
provisions of this Deed of Trust shall not be deemed to be a waiver of any of
the terms and provisions hereof, and Beneficiary or Trustee, notwithstanding
any such failure, shall have the right thereafter to insist upon the strict
performance by Grantor of any and all of the terms and provisions of this Deed
of Trust to be performed by Grantor. Beneficiary may release, regardless of
consideration and without the necessity for any notice to or consent by the
beneficiary of any subordinate deed of trust or the holder of any subordinate
lien on the Trust Property, any part of the security held for the obligations
secured by this Deed of Trust without, as to the remainder of the security, in
any way impairing or affecting this Deed of Trust or the priority of this Deed
of Trust over any subordinate lien or deed of trust.
xxxii. GOVERNING LAW, ETC. THE PROVISIONS OF THIS DEED OF
TRUST WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY, ENFORCEABILITY OF THE
LIENS AND SECURITY INTERESTS OF THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT
26
THAT GRANTOR EXPRESSLY ACKNOWLEDGES THAT BY THEIR RESPECTIVE TERMS EACH OF THE
NOTES AND THE CREDIT AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAW, AND FOR PURPOSES OF CONSISTENCY, GRANTOR AGREES THAT IN ANY IN
PERSONAM PROCEEDING RELATED TO THIS DEED OF TRUST THE RIGHTS OF THE PARTIES TO
THIS DEED OF TRUST SHALL ALSO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK GOVERNING CONTRACTS MADE AND TO BE PERFORMED
IN THAT STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.
xxxiii. Waiver of Trial by Jury. Grantor, Trustee and
Beneficiary each hereby irrevocably and unconditionally waive trial by jury in
any action, claim, suit or proceeding relating to this Deed of Trust and for
any counterclaim brought therein. Grantor hereby waives all rights to
interpose any counterclaim in any suit brought by Beneficiary or Trustee
hereunder and all rights to have any such suit consolidated with any separate
suit, action or proceeding.
xxxiv. Certain Definitions. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Deed of Trust shall be used interchangeably in singular or
plural form and the word "Grantor" shall mean "each Grantor or any subsequent
owner or owners of the Trust Property or any part thereof or interest therein,"
the word "Beneficiary" shall mean "Beneficiary or any subsequent holder of the
Notes," the word "Trustee" shall mean "Trustee and any successor trustee
hereunder," the word "Notes" shall mean "the Notes or any other evidence of
indebtedness secured by this Deed of Trust," the word "person" shall include
any individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Trust
Property" shall include any portion of the Trust Property or interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in
this Deed of Trust are for convenience or reference only and in no way limit or
amplify the provisions hereof. All terms used herein which are defined in the
Texas Uniform Commercial Code shall be used in accordance with the definition
therefor in said Code.
xxxv. Enforceability; Usury. In no event shall any
provision of this Deed of Trust, the Notes, or any other instrument evidencing
or securing the Indebtedness ever obligate Grantor to pay or allow Beneficiary
to collect interest on the Notes or any other indebtedness secured hereby at a
rate greater than the maximum non-usurious rate permitted by applicable law
(herein referred to as the "HIGHEST LAWFUL RATE"), or obligate Grantor to pay
any taxes, assessments, charges, insurance premiums or other amounts to the
extent that such payments, when added to the interest payable on the Notes or
any other notes secured hereby, would be held to constitute the payment by
Grantor of interest at a rate greater than the Highest Lawful Rate; and this
provision shall control over any provision to the contrary. To the extent the
Highest Lawful Rate is determined by reference to the laws of the State of
Texas, same shall be determined by reference to the indicated (weekly) rate
ceiling (as defined and described in Texas Revised Civil Statutes Article
5069-1.04, as amended) at the applicable time in effect.
27
Without limiting the generality of the foregoing, in the event
the maturity of all or any part of the principal amount of the Indebtedness
shall be accelerated for any reason, then such principal amount so accelerated
shall be credited with any interest theretofore paid thereon in advance and
remaining unearned at the time of such acceleration. If, pursuant to the terms
of this instrument or the Notes, any funds are applied to the payment of any
part of the principal amount of the Indebtedness prior to the maturity thereof,
then (a) any interest which would otherwise thereafter accrue on the principal
amount so paid by such application shall be canceled, and (b) the Indebtedness
remaining unpaid after such application shall be credited with the amount of
all interest, if any, theretofore collected on the principal amount so paid by
such application and remaining unearned at the date of said application; and if
the funds so applied shall be sufficient to pay in full all the Indebtedness,
then Beneficiary shall refund to Grantor all interest theretofore paid thereon
in advance and remaining unearned at the time of such acceleration. Regardless
of any other provision in this instrument, or in any of the written evidences
of the Indebtedness, Grantor shall never be required to pay any unearned
interest on the Indebtedness or any portion thereof, and shall never be
required to pay interest thereon at a rate in excess of the Highest Lawful Rate
construed by courts having competent jurisdiction thereof.
xxxvi. Homestead. Grantor represents and covenants that the
Trust Property forms no part any property owned, used or claimed by Grantor as
a business or residential homestead, or as exempt from forced sale under the
laws of the State of Texas, and disclaims and renounces all and every such
claim thereto.
xxxvii. Substitute Trustee. In case of the resignation of
the Trustee, or the inability (through death or otherwise), refusal or failure
of the Trustee to act, or at the option of Beneficiary or the holder(s) of a
majority of the Indebtedness for any other reason (which reason need not be
stated), a Substitute Trustee may be named, constituted and appointed by
Beneficiary or the holder(s) of a majority of the Indebtedness, without other
formality than an appointment and designation in writing, which appointment and
designation shall be full evidence of the right and authority to make the same
and of all facts therein recited, and this conveyance shall vest in the
Substitute Trustee the title, powers and duties herein conferred on the Trustee
originally named herein, and the conveyance of the Substitute Trustee to the
purchaser(s) at any sale of the Trust Property of any part thereof shall be
equally valid and effective. The right to appoint a Substitute Trustee shall
exist as often and whenever from any of said causes, the Trustee, original or
Substitute, resigns or cannot, will not or does not act, or Beneficiary or the
holder(s) of a majority of the Indebtedness desires to appoint a new Trustee.
No bond shall ever be required of the Trustee, original or Substitute. The
recitals in any conveyance made by the Trustee, original or Substitute, shall
be accepted and construed in court and elsewhere as prima facie evidence and
proof of the facts recited, and no other proof shall be required as to the
request by Beneficiary or the Holder(s) of a majority of the Indebtedness to
the Trustee to enforce this Deed of Trust, or as to the notice of or holding of
the sale, or as to any particulars thereof, or as to the resignation of the
Trustee, original or Substitute, or as to the inability, refusal or failure of
the Trustee, original or Substitute, to act, or as to the election of
Beneficiary or the holder(s) of a majority of the Indebtedness to appoint a new
Trustee, or as to appointment of a Substitute Trustee, and all prerequisites of
said sale shall be presumed to have been performed; and each sale made under
the powers herein granted shall be a perpetual bar against Grantor and the
heirs, personal representatives, successors and assigns of Grantor. Trustee,
original or substitute,
28
is hereby authorized and empowered to appoint any one or more persons as
attorney-in-fact to act as Trustee under him and in his name, place and stead
in order to take any actions that Trustee is authorized and empowered to do
hereunder, such appointment to be evidenced by an instrument signed and
acknowledged by said Trustee, original or substitute; and all acts done by said
attorney-in-fact shall be valid, lawful and binding as if done by said Trustee,
original or substitute, in person.
xxxviii. INDEMNIFICATION OF TRUSTEE. EXCEPT FOR GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, TRUSTEE SHALL NOT BE LIABLE FOR ANY ACT OR
OMISSION OR ERROR OF JUDGMENT. TRUSTEE MAY RELY ON ANY DOCUMENT BELIEVED BY
HIM IN GOOD FAITH TO BE GENUINE. ALL MONEY RECEIVED BY TRUSTEE SHALL, UNTIL
USED OR APPLIED AS HEREIN PROVIDED, BE HELD IN TRUST, AND TRUSTEE SHALL NOT BE
LIABLE FOR INTEREST THEREON. GRANTOR SHALL INDEMNIFY TRUSTEE AGAINST ALL
LIABILITY AND EXPENSES THAT HE MAY INCUR IN THE PERFORMANCE OF HIS DUTIES
HEREUNDER EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
xxxix. Business or Commercial Purpose. Grantor warrants
that the extension of credit evidenced by the Notes secured hereby is solely
for business or commercial purposes, other than agricultural purposes. Grantor
further warrants that the credit transaction evidenced by the Notes is
specifically exempted under Section 226.3(a) of Regulation Z issued by the
Board of Governors of the Federal Reserve System and Title 12 (Truth in Lending
Act) and Section 1603 of Title 15 (General Provisions) of the Consumer Credit
Protection Act and that no disclosures are required to be given under such
regulations and federal laws in connection with the above transaction.
xl. Final Agreement. In consideration of the premises
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Grantor hereby confirms and agrees that this Deed of
Trust (including the Schedules hereto), the Notes, any guarantees of the Notes
executed by any guarantors and all other Loan Documents and loan papers
together constitute a written "loan agreement" as defined in Section 26.02(a)
of the Texas Business and Commerce Code.
xli. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
This Deed of Trust has been duly executed by Grantor on the
date first above written.
INTERNATIONAL HOME FOODS, INC.
By:
-----------------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of October, 1996, personally came
______________________________, to be duly sworn by me, and did depose and say
the [he] [she] executed the foregoing instrument in the firm name of
INTERNATIONAL HOME FOODS, INC., the corporation therein mentioned for the
purposes therein mentioned.
---------------------------
Notary Public
[Notarial Stamp]
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
EXHIBIT D-2
Pennsylvania
THIS MORTGAGE CONSTITUTES A FIXTURE FILING
UNDER THE PENNSYLVANIA UNIFORM COMMERCIAL CODE
THIS MORTGAGE SECURES FUTURE ADVANCES AND RE-ADVANCES UP
TO A MAXIMUM PRINCIPAL AMOUNT OF $770,000,000.00
AT ANY TIME OUTSTANDING PLUS ACCRUED INTEREST
AND OTHER INDEBTEDNESS AS DESCRIBED IN 42 PA.C.S.A. SECTION 8134
OPEN-END MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF LEASES AND RENTS
from
AMERICAN HOME FOODS, INC., Mortgagor
to
THE CHASE MANHATTAN BANK,
as Administrative Agent, Mortgagee
DATED AS OF OCTOBER __, 1996
After recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
45 Lexington Avenue
New York, New York 10017
ATTN: Amy Jedlicka, Esq.
EXHIBIT D-2
[Pennsylvania]
FORM OF GUARANTOR
OPEN-END MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF LEASES AND RENTS
(THIS MORTGAGE SECURES FUTURE ADVANCES)
THIS OPEN-END MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF
LEASES AND RENTS dated as of October __, 1996 is made by AMERICAN HOME FOODS,
INC., a __________ ("MORTGAGOR"), whose address is _______________, to THE
CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"), as
Administrative Agent for the Lenders (as such terms are defined in the Credit
Agreement defined below; in such capacity, "MORTGAGEE", which term shall be
deemed to include the successors and assigns of the Administrative Agent),
whose address is c/o Chase Agency Services, 140 East 45th Street, New York, New
York 10017 Attention: Sandra Miklave. References to this "MORTGAGE" shall mean
this instrument and any and all renewals, modifications, amendments,
supplements, extensions, consolidations, substitutions, spreaders and
replacements of this instrument.
Background
a. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "IMPROVEMENTS"), being collectively referred to as the "REAL
ESTATE").
b. International Home Foods, Inc., a Delaware corporation
("BORROWER") has entered into a certain Credit Agreement dated as of even date
herewith (as the same may be amended, supplemented, restated, extended,
replaced or otherwise modified from time to time, the "CREDIT AGREEMENT") with
Morgan Stanley Senior Funding, Inc., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, Chase as Administrative Agent and the several
banks and other financial institutions or entities from time to time parties
thereto (the "LENDERS"). Capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Credit Agreement. In the event of
any conflict between the provisions of this Mortgage and the provisions of the
Credit Agreement, the applicable provisions of the Credit Agreement shall
govern and control. References in this Mortgage to the "Default Rate" shall
mean interest at a rate per annum equal to the ABR plus 2%.
c. Pursuant to the terms of the Credit Agreement, (1) the Lenders
have agreed (a) to make certain Revolving Credit Loans to Borrower in an
aggregate principal amount at any one time outstanding not to exceed
$100,000,000.00 and (b) to make certain Term Loans defined in the Credit
Agreement as the Tranche A Term Loans, the Tranche B Term Loans and the Tranche
C Term Loans
2
to Borrower in an aggregate principal amount not to exceed $670,000,000.00, (2)
the Swing Line Lender has agreed to make certain Swing Line Loans in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000.00, and (3) Chase, in its capacity as an Issuing Lender, has agreed
to issue, and the other Lenders which are L/C Participants have agreed to
acquire participating interests in, Letters of Credit for the account of
Borrower; the sum of (i) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (ii) the aggregate amount of drawings
under the Letters of Credit which have not been reimbursed pursuant to
subsection 3.5 of the Credit Agreement shall not exceed $25,000,000.00. The
maximum aggregate principal amount of the Loans and the L/C Obligations
outstanding at any one time shall not exceed $770,000,000.00.
d. It is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective
extensions of credit to the Borrower thereunder that (a) Mortgagor guaranty the
obligations of [Holdings and] Borrower under the Credit Agreement and the other
Loan Documents in respect of the Loans and the Reimbursement Obligations by
executing and delivering that certain Guarantee and Collateral Agreement dated
as of even date herewith in favor of Mortgagee (as the same may be amended,
supplemented or otherwise modified from time to time, the "GUARANTEE AND
COLLATERAL AGREEMENT") and (b) Mortgagor secure its obligations under the
Guarantee and Collateral Agreement by executing and delivering this Mortgage.
Mortgagor, a subsidiary of Borrower, will receive substantial direct and
indirect benefit from the extensions of credit made to Borrower pursuant to the
Credit Agreement.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure
the following (collectively, the "OBLIGATIONS"):
(i) the due and punctual payment and performance by
Mortgagor of any and all of its obligations and liabilities, whether
direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or
in connection with the Guarantee and Collateral Agreement;
(ii) the payment of all other obligations and liabilities
of Mortgagor, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, out of or in connection with the Guarantee and Collateral
Agreement, this Mortgage, any other document securing payment of the
Obligations (the "SECURITY DOCUMENTS") and any amendments,
supplements, extensions, renewals, restatements, replacements or
modifications of any of the foregoing (the Credit Agreement, the
Letters of Credit, the Interest
3
Rate Protection Agreements, the Guarantee and Collateral Agreement,
this Mortgage and the other Security Documents and all other documents
and instruments from time to time evidencing, securing or guaranteeing
the payment and performance of the Obligations, as any of the same may
be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "LOAN
DOCUMENTS"), in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees, charges and
disbursements of counsel to Mortgagee or to the Lenders that are
required to be paid by Mortgagor pursuant to the terms of the Credit
Agreement, this Mortgage or any other Loan Document); and
(iii) the performance of all covenants, agreements,
obligations and liabilities of Mortgagor under or pursuant to the
provisions of the Loan Documents;
MORTGAGOR HAS GRANTED, CONVEYED, BARGAINED, SOLD, ALIENED, ENFEOFFED, RELEASED,
CONFIRMED, MORTGAGED AND WARRANTED TO MORTGAGEE A LIEN UPON AND A SECURITY
INTEREST IN, AND HEREBY GRANTS, CONVEYS, BARGAINS, SELLS, ALIENS, ENFEOFFS,
RELEASES, CONFIRMS, MORTGAGES AND WARRANTS UNTO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand
whatsoever of Mortgagor, in possession or expectancy, in and to the
Real Estate or any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights, oil
and gas rights and all estates, rights, titles, interests, privileges,
licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land
lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles of
personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Mortgagor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains, draperies,
artwork, carpets, rugs, storm doors and windows, furniture and
furnishings, heating, electrical,
4
and mechanical equipment, lighting, switchboards, plumbing,
ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
appliances, fittings and fixtures of every kind and description (all
of the foregoing in this paragraph (D) being referred to as the
"EQUIPMENT");
(E) all right, title and interest of Mortgagor in and to
all substitutes and replacements of, and all additions and
improvements to, the Real Estate and the Equipment, subsequently
acquired by or released to Mortgagor or constructed, assembled or
placed by Mortgagor on the Real Estate, immediately upon such
acquisition, release, construction, assembling or placement,
including, without limitation, any and all building materials whether
stored at the Real Estate or offsite, and, in each such case, without
any further mortgage, conveyance, assignment or other act by
Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "LEASES"), and
all rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined
below) (collectively, the "RENTS");
(G) all trade names, trade marks, logos, copyrights, good
will and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof; all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or
5
Equipment for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Real Estate or any easement or other right
therein;
(I) all right, title and interest of Mortgagor in and to
(i) all contracts from time to time executed by Mortgagor or any
manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or
financing of the Real Estate or Equipment or any part thereof and all
agreements relating to the purchase or lease of any portion of the
Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options and all
leases of Equipment (collectively, the "CONTRACTS"), (ii) all
consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "PERMITS") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real
Estate (collectively, the "PLANS");
(J) any and all monies now or subsequently on deposit for
the payment of real estate taxes or special assessments against the
Real Estate or for the payment of premiums on insurance policies
covering the foregoing property or otherwise on deposit with or held
by Mortgagee as provided in this Mortgage; all capital, operating,
reserve or similar accounts held by or on behalf of Mortgagor and
related to the operation of the Mortgaged Property, whether now
existing or hereafter arising and all monies held in any of the
foregoing accounts and any certificates or instruments related to or
evidencing such accounts;
(K) all accounts and revenues arising from the operation
of the Improvements including, without limitation, (i) any right to
payment now existing or hereafter arising for rental of hotel rooms or
other space or for goods sold or leased or for services rendered,
whether or not yet earned by performance, arising from the operation
of the Improvements or any other facility on the Mortgaged Property
and (ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising
from the use of the American Express Card, the Visa Card, the Carte
Blanche Card, the Mastercard or any other credit card, including those
now existing or hereafter created, substitutions therefor, proceeds
thereof (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the
foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"PREMISES", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "MORTGAGED PROPERTY").
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TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Obligations are fully paid and
performed. PROVIDED ALWAYS, that if Mortgagor shall promptly and fully pay and
perform all of the Obligations and shall perform all of the other provisions
contained herein and in the Loan Documents, then the estate hereby granted
shall cease, terminate and become void but shall otherwise remain in full force
and effect.
Notwithstanding anything to the contrary set forth herein, the
maximum aggregate principal amount secured hereby shall not exceed at any one
time $770,000,000.00. This Mortgage covers present and future advances and
re-advances, in the aggregate amount of the obligations secured hereby, made by
the Lenders for the benefit of, inter alia, Mortgagor and Borrower and the lien
of such future advances and re-advances shall relate back to the date of this
Mortgage.
Terms and Conditions
Intending to be legally bound hereby, Mortgagor further
represents, warrants, covenants and agrees with Mortgagee as follows:
i. Warranty of Title. Mortgagor warrants that Mortgagor
has good title to the Real Estate in fee simple and good title to the rest of
the Mortgaged Property, subject only to the matters that are set forth in
Schedule B of the title insurance policy or policies being issued to Mortgagee
to insure the lien of this Mortgage (the "PERMITTED EXCEPTIONS") and Mortgagor
shall warrant, defend and preserve such title and the lien of the Mortgage
thereon against all claims of all persons and entities. Mortgagor further
warrants that it has the right to mortgage the Mortgaged Property.
ii. Payment of Obligations. Mortgagor shall pay and
perform all the Obligations at the times and places and in the manner specified
in the Guarantee and Collateral Agreement and in this Mortgage.
iii. Requirements. (a) Mortgagor shall promptly comply
with, or cause to be complied with, and conform to all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of each of
the United States of America, any State and any municipality, local government
or other political subdivision thereof and any agency, department, bureau,
board, commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "GOVERNMENTAL AUTHORITY") which has
jurisdiction over the Mortgaged Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or
7
reconstruction of any of the Mortgaged Property, except to the extent that the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect. All present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, rules, regulations and requirements of every
Governmental Authority applicable to Mortgagor or to any of the Mortgaged
Property and all covenants, restrictions, and conditions which now or later may
be applicable to any of the Mortgaged Property are collectively referred to as
the "LEGAL REQUIREMENTS".
(b) From and after the date of this Mortgage, Mortgagor
shall not by act or omission permit any building or other improvement on any
premises not subject to the lien of this Mortgage to rely on the Premises or
any part thereof or any interest therein to fulfill any Legal Requirement, and
Mortgagor hereby assigns to Mortgagee any and all rights to give consent for
all or any portion of the Premises or any interest therein to be so used.
Mortgagor shall not by act or omission impair the integrity of any of the Real
Estate so as to constitute an illegal subdivision or to prohibit the Premises
and Improvements from being conveyed as one zoning or tax lot. Mortgagor
represents that the Premises are not part of a larger tract of land owned by
Mortgagor or its affiliates or otherwise considered as part of one zoning or
tax lot, or, if they are that any authorization or variance required for the
subdivision of such larger tract which a sale of the Premises would entail has
been obtained from all appropriate Governmental Authorities so that the
Premises and Improvements constitute one zoning or tax lot capable of being
conveyed as such. Any act or omission by Mortgagor which would result in a
violation of any of the provisions of this subsection shall be void.
iv. Payment of Taxes and Other Impositions. (a)
Promptly when due but in any event prior to delinquency, Mortgagor shall pay
and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any
easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges and all other public
charges even if unforeseen or extraordinary, imposed upon or assessed against
or which may become a lien on any of the Mortgaged Property, or arising in
respect of the occupancy, use or possession thereof, together with any
penalties or interest on any of the foregoing (all of the foregoing are
collectively referred to as the "IMPOSITIONS"). Upon request by Mortgagee,
Mortgagor shall deliver to Mortgagee (i) original or copies of receipted bills
and cancelled checks evidencing payment of such Imposition if it is a real
estate tax or other public charge and (ii) evidence reasonably acceptable to
Mortgagee showing the payment of any other such Imposition. If by law any
Imposition, at Mortgagor's option, may be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such
8
Imposition shall have become due, and to add to the Indebtedness the amount so
paid, together with interest from the time of payment at the Default Rate.
Mortgagee shall give Mortgagor notice of its intent to pay any Impositions
unless an Event of Default has occurred and is continuing. Any sums paid by
Mortgagee in discharge of any Impositions shall be (i) a lien on the Premises
secured hereby prior to any right or title to, interest in, or claim upon the
Premises subordinate to the lien of this Mortgage, and (ii) payable on demand
by Mortgagor to Mortgagee together with interest at the Default Rate as set
forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on
any interest payable thereon for any taxes assessed against the Mortgaged
Property or any part thereof, and shall not claim any deduction from the
taxable value of the Mortgaged Property by reason of this Mortgage.
(d) Subject to the provisions of Section 6.3 of the
Credit Agreement and Section 6 of this Mortgage, Mortgagor shall have the right
before any delinquency occurs to contest or object in good faith to the amount
or validity of any Imposition by appropriate legal proceedings, provided
Mortgagor shall maintain adequate reserves with respect thereto on its books in
conformity with GAAP.
(e) Upon written notice to Mortgagor, Mortgagee after and
during the continuation of an Event of Default (as defined below) shall be
entitled to require Mortgagor to pay monthly in advance to Mortgagee the
equivalent of 1/12th of the estimated annual Impositions. Mortgagee may
commingle such funds with its own funds and Mortgagor shall not be entitled to
interest thereon. Any funds so collected by Mortgagee shall be used to pay
Impositions as they become due.
v. Insurance. (a) Mortgagor shall maintain or cause to
be maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss. The policy shall include building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss;
(ii) comprehensive general liability insurance under a
policy including the "broad form CGL endorsement" (or which
incorporates the language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage
occurring on, in or about the Premises in an amount not less than
$10,000,000 combined single limit with respect to injury and property
damage relating to any one occurrence plus such excess limits as
Mortgagee shall request from time to time;
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(iii) when and to the extent required by Mortgagee,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality
or localities in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or
business interruption (and/or soft costs, in the case of new
construction), if applicable, in amounts satisfactory to Mortgagee,
but not less than one year's gross rent or gross income;
(v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), (including coverage for elevators and
escalators, if any). The policy shall include coverage for
independent contractors and completed operations. The completed
operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on an occurrence basis against claims for personal
injury, including, without limitation, bodily injury, death or
property damage occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, such insurance to afford
immediate minimum protection to a limit of not less than that required
by Mortgagee with respect to personal injury, bodily injury or death
to any one or more persons or damage to property;
(vi) during the course of any construction or repair of
the Improvements, workers' compensation insurance (including
employer's liability insurance) for all employees of Mortgagor engaged
on or with respect to the Premises in such amounts as are reasonably
satisfactory to Mortgagee, but in no event less than the limits
established by law;
(vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value form insurance against "all risks of physical loss," including
collapse, water damage, flood and earthquake and transit coverage,
during construction or repairs of the Improvements, with deductible
approved by Mortgagee, in nonreporting form, covering the total value
of work performed and equipment, supplies and materials furnished
(with an appropriate limit for soft costs in the case of
construction);
(viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
and insurance against rent, extra expense, business interruption and
soft costs, if applicable, arising from any such breakdown, in such
amounts as are reasonably satisfactory to Mortgagee but not less than
the lesser of $1,000,000 or 10% of the value of the Improvements;
10
(ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount satisfactory to Mortgagee, but in no event less than the
maximum limit of coverage available under the National Flood Insurance
Act of 1968, as amended; and
(x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$100,000 or such greater amount as Mortgagee shall approve in writing, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation
and with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee), with loss payable solely to Mortgagee (modified, if
necessary, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee and be written by insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of not
less than VI, or otherwise as approved by Mortgagee. Liability insurance
policies shall name Mortgagee as an additional insured and contain a waiver of
subrogation against Mortgagee; all such policies shall indemnify and hold
Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
reasonably satisfactory to Mortgagee. Each policy shall expressly provide that
any proceeds which are payable to Mortgagee shall be paid by check payable to
the order of Mortgagee only and requiring the endorsement of Mortgagee only.
If any required insurance shall expire, be withdrawn, become void by breach of
any condition thereof by Mortgagor or by any lessee of any part of the
Mortgaged Property or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, or if for any other reason whatsoever
such insurance shall become unsatisfactory to Mortgagee in Mortgagee's
reasonable judgement, Mortgagor shall immediately obtain new or additional
insurance satisfactory to Mortgagee. Mortgagor shall not take out any separate
or additional insurance which is contributing in the event of loss unless it is
properly endorsed and otherwise satisfactory to Mortgagee in all respects.
(b) Mortgagor shall deliver to Mortgagee an original of
each insurance policy required to be maintained, or a certificate of such
insurance acceptable to Mortgagee, together with a copy of the declaration page
for each such policy. Mortgagor shall (i) pay as they become due all premiums
for such insurance, (ii) not later than 15 days prior to the expiration of each
policy to be furnished pursuant to the provisions of this Section, deliver a
renewed policy or policies, or duplicate
11
original or originals thereof, marked "premium paid," or accompanied by such
other evidence of payment reasonably satisfactory to Mortgagee with standard
non-contributory mortgage clauses in favor of and acceptable to Mortgagee.
Upon request of Mortgagee, Mortgagor shall cause its insurance underwriter or
broker to certify to Mortgagee in writing that all the requirements of this
Mortgage governing insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to
insure or deliver any such prepaid policy or policies, then Mortgagee, at its
option and without notice, may effect such insurance from year to year, and pay
the premium or premiums therefor, and Mortgagor shall pay to Mortgagee on
demand such premium or premiums so paid by Mortgagee with interest from the
time of payment at the Default Rate and the same shall be deemed to be secured
by this Mortgage and shall be collectible in the same manner as the
Indebtedness secured by this Mortgage.
(d) Mortgagor shall increase the amount of property
insurance required to equal 100% replacement cost pursuant to the provisions of
this Section at the time of each renewal of each policy (but not later than 12
months from the date of this Mortgage and each successive 12 month period to
occur thereafter) by using the F.W. Dodge Building Index to determine whether
there shall have been an increase in the replacement value since the most
recent adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall comply with and conform to
(i) all provisions of each such insurance policy, and (ii) all requirements of
the insurers applicable to Mortgagor or to any of the Mortgaged Property or to
the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of any of the Mortgaged Property. Mortgagor shall not use
or permit the use of the Mortgaged Property in any manner which would permit
any insurer to cancel any insurance policy or void coverage required to be
maintained by this Mortgage.
(f) (i) If the Mortgaged Property, or any part thereof, shall
be destroyed or damaged by fire or any other casualty, whether insured
or uninsured, or in the event any claim is made against Mortgagor for
any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall give immediate notice thereof to
Mortgagee.
(ii) If the Mortgaged Property is damaged by fire or other
casualty and the cost to repair such damage is greater than $1,000,000
but less than $10,000,000, then provided that no Event of Default
shall have occurred and be continuing, Mortgagor shall have the right
to adjust such loss, and the insurance proceeds relating to such loss
may be paid over to Mortgagor to be applied, at Mortgagor's election,
either (1) in accordance with Section 2.11 of the Credit Agreement or
(2) towards the repair and restoration of all such damage.
12
(iii) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage is greater than
$10,000,000 but less than $15,000,000, then Mortgagor authorizes and
empowers Mortgagee, at Mortgagee's option and in Mortgagee's sole
discretion, as attorney-in-fact for Mortgagor, to make proof of loss,
to adjust and compromise any claim under any insurance policy, to
appear in and prosecute any action arising from any policy, to collect
and receive insurance proceeds and to deduct therefrom Mortgagee's
expenses incurred in the collection process. Each insurance company
concerned is hereby authorized and directed to make payment for such
loss directly to Mortgagee and Mortgagor hereby designates Mortgagee
as its attorney-in-fact for the purpose of making any election
required or permitted under any insurance policy relating to repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee may be applied by Mortgagee toward reimbursement of all
costs and expenses of Mortgagee in collecting such proceeds, and the
balance shall be advanced to Mortgagor for the repair and restoration
of the Mortgaged Property in accordance with the provisions of the
Section of this Mortgage entitled "Restoration". Mortgagor shall be
obligated to use such proceeds to restore or repair the Mortgaged
Property.
(iv) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds $15,000,000, or
if an Event of Default shall have occurred and be continuing, then
Mortgagor authorizes and empowers Mortgagee, at Mortgagee's option and
in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
make proof of loss, to adjust and compromise any claim under any
insurance policy, to appear in and prosecute any action arising from
any policy, to collect and receive insurance proceeds and to deduct
therefrom Mortgagee's expenses incurred in the collection process.
Each insurance company concerned is hereby authorized and directed to
make payment for such loss directly to Mortgagee. Mortgagee shall
have the right to require Mortgagor to repair or restore the Mortgaged
Property and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee may be applied by Mortgagee toward reimbursement of all
costs and expenses of Mortgagee in collecting such proceeds, and the
balance, may be applied, at Mortgagee's sole option and in its sole
and absolute discretion, to fulfill any other Obligation of Mortgagor,
towards the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.11(d), to the
restoration or repair of the property damaged (and if Mortgagor shall
require Mortgagee to repair or restore the Mortgaged Property, such
balance shall be advanced to Mortgagor in accordance with the
provisions of the Section of this Mortgage entitled "Restoration") or
released to Mortgagor. In the event Mortgagee releases such proceeds
to Mortgagor, Mortgagor shall be obligated to use such proceeds to
restore or repair the Mortgaged Property.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Obligations, all right, title and interest of Mortgagor
13
in and to any insurance policies then in force shall pass to the purchaser or
grantee and Mortgagor hereby appoints Mortgagee its attorney-in-fact, in
Mortgagor's name, to assign and transfer all such policies and proceeds to such
purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee after an
Event of Default shall be entitled to require Mortgagor to pay monthly in
advance to Mortgagee the equivalent of 1/12th of the estimated annual premiums
due on such insurance. Mortgagee may commingle such funds with its own funds
and Mortgagor shall not be entitled to interest thereon. Any funds so
collected by Mortgagee shall be used to pay insurance premiums as they become
due.
(i) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits in such blanket policy applicable to the Premises and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
vi. Restrictions on Liens and Encumbrances. Except for
the lien of this Mortgage and the Permitted Exceptions, Mortgagor shall not
further mortgage, nor otherwise encumber the Mortgaged Property nor create or
suffer to exist any lien, charge or encumbrance on the Mortgaged Property, or
any part thereof, whether superior or subordinate to the lien of this Mortgage
and whether recourse or non-recourse, except as may be expressly permitted
under the Credit Agreement.
vii. Due on Sale and Other Transfer Restrictions. Except
as may be expressly permitted under the Credit Agreement, Mortgagor shall not
sell, transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property.
viii. Maintenance; No Alteration; Inspection; Utilities.
(a) Subject to the provisions of Section 6.5 of the Credit Agreement and
Section 5(f) of this Mortgage, (i) Mortgagor shall maintain or cause to be
maintained all the Improvements in good condition and repair, ordinary wear and
tear excepted and shall not commit or suffer any waste of the Improvements,
(ii) Mortgagor shall repair, restore, replace or rebuild promptly any part of
the Premises which may be damaged or destroyed by any casualty whatsoever and
(iii) the Improvements shall not be demolished in whole or in any material part
without the prior written consent of Mortgagee, which consent shall not be
unreasonably withheld.
14
(b) At any reasonable time and as often as may be
reasonably desired, Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect all
work done, labor performed and materials furnished in and about the
Improvements.
ix. Condemnation/Eminent Domain. Immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Mortgaged Property, or any portion thereof, Mortgagor will notify
Mortgagee of the pendency of such proceedings. Mortgagor authorizes Mortgagee,
at Mortgagee's option and in Mortgagee's reasonable discretion, as
attorney-in-fact for Mortgagor, to commence, appear in and prosecute, in
Mortgagee's or Mortgagor's name, any action or proceeding relating to any
condemnation of the Mortgaged Property, or any portion thereof, and to settle
or compromise any claim in connection with such condemnation. If Mortgagee
elects not to participate in such condemnation proceeding, then Mortgagor
shall, at its expense, diligently prosecute any such proceeding and shall
consult with Mortgagee, its attorneys and experts and cooperate with them in
any defense of any such proceedings. All awards and proceeds of condemnation
shall be assigned to Mortgagee to be applied in the same manner as insurance
proceeds, as provided above, and Mortgagor agrees to execute any such
assignments of all such awards as Mortgagee may request.
x. Restoration. If Mortgagee shall release funds to
Mortgagor for restoration of any of the Mortgaged Property, then such
restoration shall be performed only in accordance with the following
conditions:
(i) prior to the commencement of any restoration, the
plans and specifications for such restoration, and the budgeted costs,
shall be submitted to and approved by Mortgagee in its reasonable
discretion;
(ii) prior to making any advance of restoration funds,
Mortgagee shall be satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related
expenses, including interest on the Obligations and real estate taxes
on the Premises, during restoration;
(iii) at the time of any disbursement of the restoration
funds, (A) no Default (as defined below) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds or which are being contested in good faith
by appropriate proceedings and for which Mortgagor has posted a bond
in the amount of the lien which is being contested and (C) a
satisfactory bring-down or continuation of title insurance on the
Premises shall be delivered to Mortgagee;
15
(iv) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage of
completion and of performance of the work in a good and workmanlike
manner and in accordance with the contracts, plans and specifications
acceptable to Mortgagee;
(v) with respect to each advance of restoration funds,
Mortgagee may retain 10% of the amount of such advance as a holdback
until the restoration is fully completed;
(vi) the restoration funds shall bear no interest and may
be commingled with Mortgagee's other funds;
(vii) Mortgagee may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be released to
Mortgagor so long as no Event of Default shall have occurred and be
continuing.
xi. Leases. Except as may be expressly permitted under
the Credit Agreement, Mortgagor shall not (i) execute an assignment or pledge
of any Lease relating to all or any portion of the Mortgaged Property other
than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, execute or permit to exist any Lease of any of the Mortgaged
Property.
(ii) Mortgagor shall deliver to Mortgagee, within 10 days
after a request by Mortgagee, a written statement, certified by Mortgagor as
being true, correct and complete, containing the names of all lessees and other
occupants of the Mortgaged Property, the terms of all Leases and the spaces
occupied and rentals payable thereunder, and a list of all Leases which are
then in default, including the nature and magnitude of the default; such
statement shall be accompanied by credit information with respect to the
lessees and such other information as Mortgagee may request.
(iii) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(iv) In the event of the enforcement by Mortgagee of any
remedy under this Mortgage, the lessee under each Lease shall, if requested by
Mortgagee or any other person succeeding to the interest of Mortgagee as a
result of such enforcement, attorn to Mortgagee or to such person and shall
recognize Mortgagee or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Mortgagee or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
16
modification to the Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the Premises or any portion
thereof; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Mortgagee or such successor in interest.
Each lessee or other occupant, upon request by Mortgagee or such successor in
interest, shall execute and deliver an instrument or instruments confirming
such attornment. In addition, Mortgagor agrees that each Lease entered into
after the date of this Mortgage shall include language to the effect of
subsections (c) and (d) of this Section; provided that the provisions of such
subsections shall be self-operative and any failure of any Lease to include
such language shall not impair the binding effect of such provisions on any
lessee under such Lease.
xii. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be reasonably required by Mortgagee to confirm the lien of this
Mortgage and all other rights or benefits conferred on Mortgagee. Mortgagor,
within 5 business days after request, shall deliver, in form and substance
satisfactory to Mortgagee, a written statement, duly acknowledged, setting
forth the amount of the Obligations, and whether any offsets, claims,
counterclaims or defenses exist against the Obligations and certifying as to
such other matters as Mortgagee shall reasonably request.
xiii. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same after five (5) days' notice to Mortgagor, and the amount or cost
thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee and the same shall be secured by this Mortgage and shall
be a lien on the Mortgaged Property prior to any right, title to, interest in
or claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Section shall
be deemed or construed to cure Mortgagor's default or waive any right or remedy
of Mortgagee.
xiv. Mortgagor's Existence, etc. Mortgagor shall do all
things necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state in which it was
formed and its right to own property and transact business in the Commonwealth
of Pennsylvania. Mortgagor represents and warrants that Mortgagor is a duly
organized and validly existing corporation in good standing, and this Mortgage
has been executed by a duly authorized officer thereof. This Mortgage
constitutes the legal, valid and binding obligation of Mortgagor,
17
enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
xv. Events of Default. The occurrence of any one or more
of the following events shall constitute an Event of Default hereunder:
(i) an Event of Default under the Credit Agreement; or
(ii) a failure to make payment of any other sums required
to be paid hereunder or under the Loan Documents (including, without
limitation, any Imposition) within the period required by specific
provision of this Mortgage or the relevant Loan Document or, if no
such period is so provided, by no later than three days after written
notice from Mortgagee; or
(iii) a failure (i) to keep in force the insurance required
by this Mortgage; or (ii) to comply with and conform to all provisions
and requirements of the insurance policies and the insurers thereunder
which affects Mortgagor's ability (A) to keep in force the insurance
required by this Mortgage or (B) to collect any proceeds therefrom
unless, provided that Mortgagor shall have given Mortgagee prompt
notice of such failure, Mortgagee shall reasonably determine the
aggregate amount of proceeds which would have been collectable but for
any such failure to be less than $10,000,000.00; or (iii) to comply
with any other material provisions of this Deed of Trust regarding
insurance.
xvi. Remedies. Upon the occurrence of any Event of
Default, in addition to any other rights and remedies Mortgagee may have
pursuant to the Loan Documents, or as provided by law, and without limitation:
(a) (1) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) of the Section of the Credit Agreement
entitled "Events of Default", automatically the Obligations and all other
amounts owing under the Guarantee and Collateral Agreement, this Mortgage and
the other Security Documents immediately shall become due and payable, and (2)
if such event is any other Event of Default, by notice to Mortgagor, Mortgagee
may declare the Obligations (together with accrued interest thereon) and all
other amounts payable under the Guarantee and Collateral Agreement, this
Mortgage and the other Security Documents to be immediately due and payable.
Except as expressly provided above in this Section and in the Guarantee and
Collateral Agreement, presentment, demand, protest and all other notices of any
kind are hereby expressly waived. In addition, upon the occurrence of any
Event of Default, Mortgagee may immediately take such action, without notice or
demand, as it deems advisable to protect and enforce its rights against
Mortgagor and in and to the Mortgaged Property, including, but not limited to,
the following actions, each of which may be pursued concurrently or otherwise,
at such time and in such manner as Mortgagee may
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determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable
law, (A) institute and maintain an action of mortgage foreclosure
against all or any part of the Mortgaged Property, (B) institute and
maintain an action on the Guarantee and Collateral Agreement, (C) sell
all or part of the Mortgaged Property (Mortgagor expressly granting to
Mortgagee the power of sale), or (D) take such other action at law or
in equity for the enforcement of this Mortgage or any of the Loan
Documents as the law may allow. Mortgagee may proceed in any such
action to final judgment and execution thereon for all sums due
hereunder, together with interest thereon at the Default Rate and all
costs of suit, including, without limitation, reasonable attorneys'
fees and disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Mortgagee from the date of judgment until
actual payment is made of the full amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys
and employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Obligations enter into and upon the Mortgaged Property and each and
every part thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the Mortgaged
Property to Mortgagee upon demand at any such time) and use, operate,
manage, maintain and control the Mortgaged Property and every part
thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or
parts of the Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper, (y) to
enforce, cancel or modify any Lease and (z) generally to execute, do
and perform any other act, deed, matter or thing concerning the
Mortgaged Property as Mortgagee shall deem appropriate as fully as
Mortgagor might do.
(b) The holder of this Mortgage, in any action to
foreclose it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Mortgagee's election, in one
parcel or in more than one parcel and Mortgagee is specifically empowered,
(without being required to do so, and in its sole and absolute discretion) to
cause successive sales of portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and notwithstanding
to the contrary any exculpatory or non-recourse language which may be contained
herein, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
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(d) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT MORTGAGOR
AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD OF THE COMMONWEALTH
OF PENNSYLVANIA TO APPEAR FOR AND TO CONFESS JUDGMENT IN EJECTMENT AGAINST
MORTGAGOR (AND, AT THE ELECTION OF SAID ATTORNEY, AGAINST ANY PERSON CLAIMING
UNDER, BY OR THROUGH MORTGAGOR) FOR THE RECOVERY BY MORTGAGEE OF POSSESSION OF
THE ENTIRE PREMISES OR, AT THE ELECTION OF SAID ATTORNEY, ANY PORTION OR
PORTIONS OF THE PREMISES. THE FOREGOING AUTHORITY TO CONFESS JUDGMENT SHALL
NOT BE EXHAUSTED BY ANY EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME
UNTIL MORTGAGEE IS FULLY AND FINALLY VESTED WITH POSSESSION OF THE ENTIRE
PREMISES. MORTGAGOR EXPRESSLY AGREES THAT ANY JUDGMENT ENTERED PURSUANT TO THE
FOREGOING AUTHORITY SHALL BE FINAL AND RELEASES TO MORTGAGEE, AND TO ANY
ATTORNEY APPEARING FOR MORTGAGOR OR MORTGAGEE, ALL ERRORS IN SAID PROCEEDINGS
AND ALL LIABILITY THEREFOR. UPON CONFESSION OF JUDGMENT IN EJECTMENT PURSUANT
TO THE FOREGOING AUTHORITY, A WRIT OF POSSESSION (OR LIKE WRIT APPROPRIATE
UNDER THEN APPLICABLE LAW) MAY ISSUE FORTHWITH WITHOUT ANY PRIOR PROCEEDINGS
AND MAY INCLUDE THE COSTS OF MORTGAGEE. JUDGMENT MAY BE ENTERED PURSUANT TO
THE FOREGOING AUTHORITY ON THE BASIS OF AN AFFIDAVIT MADE ON MORTGAGEE'S BEHALF
AND SETTING FORTH THE RELEVANT FACTS, OF WHICH FACTS SUCH AFFIDAVIT SHALL BE
CONCLUSIVE EVIDENCE, AND IF A TRUE COPY OF THIS MORTGAGE IS FILED IN ANY ACTION
FOR SUCH JUDGMENT IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS
MORTGAGE.
xvii. Right of Mortgagee to Credit Sale. Upon the
occurrence of any sale made under this Mortgage, whether made under the power
of sale or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property
or any part thereof. In lieu of paying cash therefor, Mortgagee may make
settlement for the purchase price by crediting upon the Obligations or other
sums secured by this Mortgage the net sales price after deducting therefrom the
expenses of sale and the cost of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage. In such event, this Mortgage, the
Guarantee and Collateral Agreement and documents evidencing expenditures
secured hereby may be presented to the person or persons conducting the sale in
order that the amount so used or applied may be credited upon the Obligations
as having been paid.
xviii. Appointment of Receiver. If an Event of Default
shall have occurred and be continuing, Mortgagee as a matter of right and
without notice to Mortgagor, unless otherwise required by applicable law, and
without regard to the adequacy or inadequacy of the Mortgaged Property or any
other collateral as security for the Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until
20
the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
xix. Extension, Release, etc. (a) Without affecting the
lien or charge of this Mortgage upon any portion of the Mortgaged Property not
then or theretofore released as security for the full amount of the
Obligations, Mortgagee may, from time to time and without notice, agree to (i)
release any person liable for the indebtedness guaranteed under the Guarantee
and Collateral Agreement, (ii) extend the maturity or alter any of the terms of
the indebtedness guaranteed under the Guarantee and Collateral Agreement or any
other guaranty thereof, (iii) grant other indulgences, (iv) release or
reconvey, or cause to be released or reconveyed at any time at Mortgagee's
option any parcel, portion or all of the Mortgaged Property, (v) take or
release any other or additional security for any obligation herein mentioned,
or (vi) make compositions or other arrangements with debtors in relation
thereto. If at any time this Mortgage shall secure less than all of the
principal amount of the Obligations, it is expressly agreed that any repayments
of the principal amount of the Obligations shall not reduce the amount of the
lien of this Mortgage until the lien amount shall equal the principal amount of
the Obligations outstanding.
(b) No recovery of any judgment by Mortgagee and no levy
of an execution under any judgment upon the Mortgaged Property or upon any
other property of Mortgagor shall affect the lien of this Mortgage or any
liens, rights, powers or remedies of Mortgagee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Obligations or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event
that ownership of this Mortgage and title to the Mortgaged Property or any
estate therein shall become vested in the same person or entity, this Mortgage
shall not merge in such title but shall continue as a valid lien on the
Mortgaged Property for the amount secured hereby.
xx. Security Agreement under Uniform Commercial Code.
(a) It is the intention of the parties hereto that this Mortgage shall
constitute a Security Agreement within the meaning of the Uniform Commercial
Code (the "CODE") of the State in which the Mortgaged Property is located. If
an Event of Default shall occur under this Mortgage, then in addition to having
any other right or remedy available at law or in equity, Mortgagee shall have
the option of either (i) proceeding under the Code and exercising such rights
and remedies as may be provided to a secured party by the Code
21
with respect to all or any portion of the Mortgaged Property which is personal
property (including, without limitation, taking possession of and selling such
property) or (ii) treating such property as real property and proceeding with
respect to both the real and personal property constituting the Mortgaged
Property in accordance with Mortgagee's rights, powers and remedies with
respect to the real property (in which event the default provisions of the Code
shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited
to, attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor
shall assemble the personal property and make it available to Mortgagee at a
place designated by Mortgagee which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent
permitted by law, that: (i) all of the goods described within the definition of
the word "Equipment" are or are to become fixtures on the Real Estate; (ii)
this Mortgage upon recording or registration in the real estate records of the
proper office shall constitute a financing statement filed as a "fixture
filing" within the meaning of Sections 9 313 and 9 402 of the Code; (iii)
Mortgagor is the record owner of the Real Estate; and (iv) the addresses of
Mortgagor and Mortgagee are as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to
time, shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document
as Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor further agrees to pay to Mortgagee on demand
all costs and expenses incurred by Mortgagee in connection with the
preparation, execution, recording, filing and re-filing of any such document
and all reasonable costs and expenses of any record searches for financing
statements Mortgagee shall reasonably require. Mortgagor shall from time to
time, on request of Mortgagee, deliver to Mortgagee an inventory in reasonable
detail of any of the Mortgaged Property which constitutes personal property.
If Mortgagor shall fail to furnish any financing or continuation statement
within 10 days after request by Mortgagee, then pursuant to the provisions of
the Code, Mortgagor hereby authorizes Mortgagee, without the signature of
Mortgagor, to execute and file any such financing and continuation statements.
The filing of any financing or continuation statements in the records relating
to personal property or chattels shall not be construed as in any way impairing
the right of Mortgagee to proceed against any personal property encumbered by
this Mortgage as real property, as set forth above.
xxi. Assignment of Rents. Mortgagor hereby assigns to
Mortgagee the Rents as further security for the payment and performance of the
Obligations, and Mortgagor grants to Mortgagee
22
the right to enter the Mortgaged Property for the purpose of collecting the
same and to let the Mortgaged Property or any part thereof, and to apply the
Rents on account of the Obligations. The foregoing assignment and grant is
present and absolute and shall continue in effect until the Obligations are
paid and performed in full, but Mortgagee hereby waives the right to enter the
Mortgaged Property for the purpose of collecting the Rents and Mortgagor shall
be entitled to collect, receive, use and retain the Rents until the occurrence
of an Event of Default under this Mortgage; such right of Mortgagor to collect,
receive, use and retain the Rents may be revoked by Mortgagee upon the
occurrence of any Event of Default under this Mortgage by giving not less than
five days' written notice of such revocation to Mortgagor; in the event such
notice is given, Mortgagor shall pay over to Mortgagee, or to any receiver
appointed to collect the Rents, any lease security deposits, and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy of
the Mortgaged Property or of such part thereof as may be in the possession of
Mortgagor or any affiliate of Mortgagor, and upon default in any such payment
Mortgagor and any such affiliate will vacate and surrender the possession of
the Mortgaged Property to Mortgagee or to such receiver, and in default thereof
may be evicted by summary proceedings or otherwise. Mortgagor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any).
xxii. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other
funds of Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall
furnish Mortgagee satisfactory evidence of compliance with this subsection,
together with a statement of all lease security deposits by lessees and copies
of all Leases not previously delivered to Mortgagee, which statement shall be
certified by Mortgagor.
xxiii. Additional Rights. The holder of any subordinate
lien on the Mortgaged Property shall have no right to terminate any Lease
whether or not such Lease is subordinate to this Mortgage nor shall any holder
of any subordinate lien join any tenant under any Lease in any action to
foreclose the lien or modify, interfere with, disturb or terminate the rights
of any tenant under any Lease. By recordation of this Mortgage all subordinate
lienholders are subject to and notified of this provision, and any action taken
by any such lienholder contrary to this provision shall be null and void. Upon
the occurrence of any Event of Default, Mortgagee may, in its sole discretion
and without regard to the adequacy of its security under this Mortgage, apply
all or any part of any amounts on deposit with Mortgagee under this Mortgage
against all or any part of the Obligations. Any such application shall not be
construed to cure or waive any Default or Event of Default or invalidate any
act taken by Mortgagee on account of such Default or Event of Default.
xxiv. Changes in Method of Taxation. In the event of the
passage after the date hereof of any law of any Governmental Authority
deducting from the value of the Premises for the purposes of taxation any lien
thereon, or changing in any way the laws for the taxation of mortgages or debts
23
secured thereby for federal, state or local purposes, or the manner of
collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or debts secured thereby, the holder of this Mortgage
shall have the right to declare the indebtedness guaranteed under the Guarantee
and Collateral Agreement due on a date to be specified by not less than 30
days' written notice to be given to Mortgagor unless within such 30-day period
Mortgagor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment and performance of the Obligations and such
assumption shall be permitted by law.
xxv. Notices. All notices, requests, demands and other
communications hereunder shall be given in the manner set forth in the Credit
Agreement, addressed to Mortgagor at the address given on the first page of
this Mortgage and to Mortgagee at the address given on the first page of this
Mortgage. Either party may change its address by notice to the other party.
If any party other than Mortgagor shall be entitled to receive copies of
notices, demands or approvals, failure of Mortgagee to send such copies shall
not impair the effectiveness of any notice sent to Mortgagor.
xxvi. No Oral Modification. This Mortgage may not be
changed or terminated orally. Any agreement made by Mortgagor and Mortgagee
after the date of this Mortgage relating to this Mortgage shall be superior to
the rights of the holder of any intervening or subordinate lien or encumbrance.
xxvii. Partial Invalidity. In the event any one or more of
the provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof, but each shall
be construed as if such invalid, illegal or unenforceable provision had never
been included. Notwithstanding to the contrary anything contained in this
Mortgage or in any provisions of the Loan Documents, the obligations of
Mortgagor and of any other obligor under the Loan Documents shall be subject to
the limitation that Mortgagee shall not charge, take or receive, nor shall
Mortgagor or any other obligor be obligated to pay to Mortgagee, any amounts
constituting interest in excess of the maximum rate permitted by law to be
charged by Mortgagee.
xxviii. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Obligations or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and
24
its successors and assigns, and for any and all persons ever claiming any
interest in the Mortgaged Property, to the extent permitted by law, hereby
waives and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the secured
indebtedness and marshalling in the event of foreclosure of the liens hereby
created. Mortgagor further waives, to the extent permitted by applicable law,
all errors and imperfections in any proceedings instituted by Mortgagee under
this Mortgage and all notices of any Event of Default (except as may be
provided for under the terms of this Mortgage) or of Mortgagee's election to
exercise or its actual exercise of any right, remedy or recourse provided for
under this Mortgage.
xxix. Remedies Not Exclusive. Mortgagee shall be entitled
to enforce payment and performance of the Obligations and to exercise all
rights and powers under this Mortgage or under any of the other Loan Documents
or other agreement or any laws now or hereafter in force, notwithstanding some
or all of the Obligations may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or otherwise. Neither
the acceptance of this Mortgage nor its enforcement, shall prejudice or in any
manner affect Mortgagee's right to realize upon or enforce any other security
now or hereafter held by Mortgagee, it being agreed that Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter held
by Mortgagee in such order and manner as Mortgagee may determine in its
absolute discretion. No remedy herein conferred upon or reserved to Mortgagee
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Loan Documents to Mortgagee
or to which it may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee. In no event shall Mortgagee, in the exercise of the remedies
provided in this Mortgage (including, without limitation, in connection with
the assignment of Rents to Mortgagee, or the appointment of a receiver and the
entry of such receiver on to all or any part of the Mortgaged Property), be
deemed a "mortgagee in possession," and Mortgagee shall not in any way be made
liable for any act, either of commission or omission, in connection with the
exercise of such remedies.
xxx. Multiple Security. If (a) the Premises shall consist
of one or more parcels, whether or not contiguous and whether or not located in
the same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Obligations upon other property in
the State of Pennsylvania (whether or not such property is owned by Mortgagor
or by others) or (c) both the circumstances described in clauses (a) and (b)
shall be true, then to the fullest extent permitted by law, Mortgagee may, at
its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Obligations
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated
25
foreclosure action is a specific inducement to Mortgagee to extend the
Obligations, and Mortgagor expressly and irrevocably waives any objections to
the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have. Mortgagor further
agrees that if Mortgagee shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Obligations, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other
remedies granted in this Mortgage against all or any part of the Mortgaged
Property and Mortgagor waives any objections to the commencement or
continuation of a foreclosure of this Mortgage or exercise of any other
remedies hereunder based on such other proceedings or judgments, and waives any
right to seek to dismiss, stay, remove, transfer or consolidate either any
action under this Mortgage or such other proceedings on such basis. Neither
the commencement nor continuation of proceedings to foreclose this Mortgage nor
the exercise of any other rights hereunder nor the recovery of any judgment by
Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral (either in or
outside the State in which the Premises are located) which directly or
indirectly secures the Obligations, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Obligations (directly or indirectly) in
the most economical and least time-consuming manner.
xxxi. Expenses; Indemnification. If (i) any action or
proceeding shall be commenced by Mortgagee (including but not limited to any
action to foreclose this Mortgage, to enforce the Guarantee and Collateral
Agreement or to collect the Obligations), or any action or proceeding is
commenced to which Mortgagee is made a party, or in which it becomes necessary
to defend or uphold the lien of this Mortgage (including, without limitation,
any proceeding or other action relating to the bankruptcy, insolvency or
reorganization of any obligor with respect to any Guarantee Obligation), or in
which Mortgagee is served with any legal process, discovery notice or subpoena
and (ii) in each of the foregoing instances such action or proceeding in any
manner relates to or arises out of this Mortgage or Mortgagee's lending to
Borrower or acceptance of the Guarantee and
26
Collateral Agreement from Mortgagor of the Obligations or any of the
transactions contemplated by this Mortgage, then Mortgagor will immediately
reimburse or pay to Mortgagee all of the expenses which have been or may be
incurred by Mortgagee with respect to the foregoing (including reasonable
counsel fees and disbursements), together with interest thereon at the Default
Rate, and any such sum and the interest thereon shall be a lien on the
Mortgaged Property, prior to any right, or title to, interest in or claim upon
the Mortgaged Property attaching or accruing subsequent to the lien of this
Mortgage, and shall be deemed to be secured by this Mortgage. In any action or
proceeding to foreclose this Mortgage, or to recover or collect the
Obligations, the provisions of law respecting the recovering of costs,
disbursements and allowances shall prevail unaffected by this covenant.
(b) Mortgagor shall indemnify and hold harmless Mortgagee
and Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee
or agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
xxxii. Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit
of Mortgagee and its successors and assigns, and no other person or entity
shall have standing to require compliance with such covenants or be deemed,
under any circumstances, to be a beneficiary of such covenants, any or all of
which may be freely waived in whole or in part by Mortgagee at any time if in
its sole discretion it deems such waiver advisable. All such covenants of
Mortgagor shall run with the land and bind Mortgagor, the successors and
assigns of Mortgagor (and each of them) and all subsequent owners,
encumbrancers and tenants of the Mortgaged Property, and shall inure to the
benefit of Mortgagee, its successors and assigns. The word "Mortgagor" shall
be construed as if it read "Mortgagors" whenever the sense of this Mortgage so
requires and if there shall be more than one Mortgagor, the obligations of the
Mortgagors shall be joint and several.
xxxiii. No Waivers, etc. Any failure by Mortgagee to insist
upon the strict performance by Mortgagor of any of the terms and provisions of
this Mortgage shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Mortgagee, notwithstanding any such failure, shall have
the right thereafter to insist upon the strict performance by Mortgagor of any
and all of the terms and provisions of this Mortgage to be performed by
Mortgagor. Mortgagee may release, regardless of consideration and without the
necessity for any notice to or consent by the holder of any subordinate lien on
the Mortgaged Property, any part of the security held for the obligations
27
secured by this Mortgage without, as to the remainder of the security, in any
way impairing or affecting the lien of this Mortgage or the priority of such
lien over any subordinate lien.
xxxiv. Governing Law, etc. This Mortgage shall be governed
by and construed in accordance with the laws of the State of Pennsylvania,
except that Mortgagor expressly acknowledges that by their respective terms the
Credit Agreement and the Guarantee and Collateral Agreement shall be governed
and construed in accordance with the laws of the State of New York, without
regard to principles of conflict of law, and for purposes of consistency,
Mortgagor agrees that in any in personam proceeding related to this Mortgage
the rights of the parties to this Mortgage shall also be governed by and
construed in accordance with the laws of the State of New York governing
contracts made and to be performed in that State, without regard to principles
of conflict of law.
xxxv. Waiver of Trial by Jury. Mortgagor and Mortgagee
each hereby irrevocably and unconditionally waive trial by jury in any action,
claim, suit or proceeding relating to this Mortgage and for any counterclaim
brought therein. Mortgagor hereby waives all rights to interpose any
counterclaim in any suit brought by Mortgagee hereunder and all rights to have
any such suit consolidated with any separate suit, action or proceeding.
xxxvi. Certain Definitions. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Mortgage shall be used interchangeably in singular or plural
form and the word "Mortgagor" shall mean "each Mortgagor or any subsequent
owner or owners of the Mortgaged Property or any part thereof or interest
therein," the word "Mortgagee" shall mean "Mortgagee or any subsequent holder
of the Guarantee and Collateral Agreement," the words "Guarantee and Collateral
Agreement" shall mean "the Guarantee and Collateral Agreement or any other
evidence of indebtedness secured by this Mortgage," the word "person" shall
include any individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, or other entity, and the words
"Mortgaged Property" shall include any portion of the Mortgaged Property or
interest therein. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.
The captions in this Mortgage are for convenience or reference only and in no
way limit or amplify the provisions hereof.
xxxvii. Assembled Industrial Plant Mortgage. This Mortgage
is intended to be an assembled industrial plant mortgage within the broadest
interpretation of the "assembled industrial plant mortgage doctrine" under the
laws of the Commonwealth of Pennsylvania.
xxxviii. Future Advances. This Mortgage is executed and
delivered to secure, among other things, future advances and re-advances. It
is understood and agreed that this Mortgage secures
28
present and future advances and re-advances made for the benefit of Mortgagor
and that the lien of such future advances shall relate back to the date of this
Mortgage, and Mortgagor and Mortgagee intend that this Mortgage be an Open-End
Mortgage as described in 42 PA.C.S.A. Section 8134 and as such be entitled to
all benefits under 42 PA.C.S.A. Section 8134.
xxxix. Purchase Money Mortgage. This is a purchase money
mortgage and shall be entitled to all benefits as such under the lien priority
provisions of the Pennsylvania Judicial Code, 42 Pa.C.S.A. Section 8141, as
amended.
xl. Receipt of Copy. Mortgagor acknowledges that it has
received a true copy of this Mortgage.
29
xli. Release. If Mortgagor shall and does pay to
Mortgagee the full principal amount of the indebtedness secured hereby,
together with all interest accrued thereon, and keeps all the other covenants
and agreements contained herein and in the Note and in the other Loan
Documents, all in the manner and at the times set forth herein or in the Note
and in the other Loan Documents, and if Mortgagor shall also pay all
satisfaction costs, including, but not limited to, reasonable attorneys' fees
and the cost of recording a satisfaction piece and, if appropriate, a
power-of-attorney to satisfy this Mortgage, then and from thenceforth this
Mortgage and the estate hereby created, granted, transferred and assigned shall
cease and become void.
This Mortgage has been duly executed by Mortgagor on the date
first above written.
ATTEST AMERICAN HOME FOODS, INC.
[corporate seal]
By: By:
------------------------- -----------------------------
Name: Name:
Title: [AS,S, AT or T] Title: [VP or P]
The address of the within-named Mortgagee is:
c/o Chase Agency Services
140 East 45th Street
New York, New York 10017
For the Mortgagee
-----------------------
Name:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this, the ____ day of October, 1996, before me, a Notary
Public in and for the State and County aforesaid, the undersigned officer,
personally appeared ___________________________, who acknowledged [her]
[him]self to be the [_________________] President of AMERICAN HOME FOODS, INC.,
a ________ corporation and that [s]he, as such officer, being authorized to do
so, executed the foregoing instrument for the purposes therein contained, by
signing the name of the corporation by [her][him]self as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------
Notary Public
[Notarial Seal]
My Commission Expires:
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
Exhibit E to the
Credit Agreement
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of November 1,
1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among International Home Foods, Inc. (the "Borrower"), the
Lenders parties thereto, Morgan Stanley Senior Funding, Inc., as Documentation
Agent, Bankers Trust Company, as Syndication Agent and The Chase Manhattan
Bank, as Administrative Agent. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement.
The Assignor named on Schedule 1 (the "Assignor") and the Assignee
named on Schedule 1 (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), an interest as specified in Schedule 1 (the
"Assigned Interest") in and to the Assignor's rights and obligations under the
Credit Agreement with respect to those Facilities described on Schedule 1
(individually, an "Assigned Facility"; collectively, the "Assigned
Facilities"), in a principal amount for each Assigned Facility as set forth on
Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document
or any other instrument or document furnished pursuant thereto or with respect
to the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the Assigned Interest, that it has not created
any adverse claim upon the Assigned Interest and that the Assigned Interest is
free and clear of any such adverse claim; and (b) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or the performance or observance by
the Borrower or any other Loan Party of any of their respective obligations
under the Credit Agreement or any other Loan Document or any other instrument
or document furnished pursuant thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements referred to in Sections 4.1 and 6.1
2
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon
the Assignor, the Administrative Agent or any other Lender or Agent and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
and any other instrument or document furnished pursuant hereto or thereto as
are delegated to the Administrative Agent by the terms thereof, together with
such powers as are incidental thereto; and (e) agrees that it will be bound by
the provisions of the Credit Agreement and the other Loan Documents and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement and the other Loan Documents are required to be performed
by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section
2.19(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be as
specified on Schedule 1 (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Administrative
Agent for acceptance by it and recording by the Administrative Agent pursuant
to Section 10.6(d) of the Credit Agreement, effective as of the Effective Date
(which shall not, unless otherwise agreed to by the Administrative Agent, be
earlier than five Business Days after the execution hereof).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and
under the other Loan Documents and shall be bound by the provisions thereof and
(b) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement and the other Loan Documents (other than any such rights
which expressly survive the termination thereof).
3
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT, DATED AS OF NOVEMBER 1, 1996,
AMONG
INTERNATIONAL HOME FOODS, INC., THE LENDERS PARTIES THERETO, MORGAN STANLEY
SENIOR FUNDING, INC., AS DOCUMENTATION
AGENT, BANKERS TRUST COMPANY, AS SYNDICATION AGENT, AND THE CHASE MANHATTAN
BANK, AS ADMINISTRATIVE AGENT
--------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
[Download Table]
Principal Commitment Percentage Assigned
Facility Assigned Amount Assigned (if applicable)
----------------- --------------- ------------------------------
$ . %
--------------- --- -----------------
The terms set forth above and in the Assignment and Acceptance to which this
Schedule 1 is attached are hereby agreed to:
[Consented to and]*/ Accepted for the
Recordation in the Register:
, as Assignor THE CHASE MANHATTAN BANK,
---------------- as Administrative Agent
By: By:
-----------------------------------
Name: Name:
Title: Title:
__________________________________
*/ To be completed only if consents are required under Section 10.6(c).
2
[Consented to]:*/
__________________, as Assignee [INTERNATIONAL HOME FOODS, INC.]
By: By:
-----------------------------------
Name: Name:
Title: Title:
[VINSON & ELKINS L.L.P. LETTERHEAD]
EXHIBIT F TO THE CREDIT AGREEMENT
November 1, 1996
To Each of the Addressees Named on
Exhibit A hereto
Ladies and Gentlemen:
We have acted as counsel for International Home Foods, Inc., a
Delaware corporation (the "Borrower"), in connection with that certain Credit
Agreement dated as of November 1, 1996 (the "Credit Agreement"), by and among
the Borrower, Morgan Stanley Senior Funding, Inc., as Documentation Agent,
Bankers Trust Company, as Syndication Agent, The Chase Manhattan Bank, as
Administrative Agent, and the Lenders party thereto. This opinion is delivered
to you pursuant to Section 5.1(h)(i) of the Credit Agreement. Capitalized
terms not otherwise defined herein are defined as set forth in the Credit
Agreement, and other terms that are defined in the Uniform Commercial Code as
in effect in the State of New York (the "New York UCC") have the same meanings
when used herein unless otherwise indicated by the context in which such terms
are so used.
In connection with the opinions hereinafter expressed, we have (i)
investigated such questions of law, (ii) examined such corporate documents and
records of the Borrower and the Designated Subsidiaries (as such term is
hereinafter defined) and certificates of public officials, and (iii) received
such information from officers and representatives of the Borrower and the
Designated Subsidiaries (with the Borrower and the Designated Subsidiaries
hereinafter referred to collectively as the "Loan Parties"), as we have deemed
necessary or appropriate for the purposes of this opinion. We have examined
the following documents (those identified in items (a) through (d) below being
referred to collectively as the "Loan Documents"):
(a) An executed copy of the Credit Agreement;
(b) The executed Notes;
Page 2
November 1, 1996
(c) An executed copy of the Guarantee and Collateral Agreement
executed and delivered by American Home Foods, Inc., a Delaware corporation,
Luck's Inc., a Delaware corporation, M. Polaner, Inc., a Delaware corporation,
Heritage Brands Holdings Inc., a Delaware corporation, Heritage Brands, Inc., a
Delaware corporation, Campfire, Inc., a Delaware corporation (with such
entities herein referred to collectively as the "Designated Subsidiaries"), and
the Borrower;
(d) Executed copies of the Mortgages, including the Deed of Trust
and Security Agreement executed by American Home Foods, Inc., a Delaware
corporation (the "Grantor"), to be recorded in the State of Texas (the "Deed of
Trust");
(e) An executed copy of the Financing Statements executed in
connection with the Guarantee and Collateral Agreement to be filed in the
Office of the Secretary of State of Texas (the "Collateral Agreement Financing
Statements"); and
(f) An executed copy of the Financing Statement executed in
connection with the Deed of Trust (the "Deed of Trust Financing Statement,"
with the Collateral Agreement Financing Statements and the Deed of Trust
Financing Statement herein referred to collectively as the "Financing
Statements").
In rendering the opinions herein set forth, we have assumed (i) the
due authorization, execution and delivery of the Loan Documents by all parties
to such Documents other than the Loan Parties and that each such Document is
valid, binding and enforceable against the parties thereto other than the Loan
Parties, (ii) the legal capacity of natural persons, (iii) the genuineness of
all signatures, (iv) the authenticity of all documents submitted to us as
originals, and (v) the conformity to original documents of all documents
submitted to us as copies. As to various questions of fact material to our
opinion, we have relied upon the representations made in the Loan Documents and
upon certificates of officers of each of the Loan Parties (collectively, the
"Officers' Certificates"), copies of which are attached hereto.
Based upon the foregoing and subject to the qualifications,
exceptions, limitations, and assumptions set forth herein, we are of the
opinion that:
1. Each Loan Party is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which such Loan Party owns or leases any property or
does any business as identified in the Officer's Certificate executed by an
officer of such Loan Party.
Page 3
November 1, 1996
2. Each Loan Party has the corporate power and authority to enter
into and perform its obligations under the Loan Documents to which it is a
party. Each Loan Party's execution, delivery and performance of the Loan
Documents to which it is a party have been duly authorized by all requisite
corporate action, and the Loan Documents have been duly executed and delivered
by each Loan Party that is a party thereto.
3. (a) Under the internal laws of the State of New York,
each of the Loan Documents constitutes a legal, valid and binding obligation of
each Loan Party that is a party thereto, enforceable against such Loan Party
in accordance with the respective terms of such Loan Documents.
(b) Under the internal laws of the State of Texas, to the
extent that said laws govern the Deed of Trust, the Deed of Trust constitutes a
legal, valid and binding obligation of the Grantor, enforceable against the
Grantor in accordance with its terms.
4. The execution and delivery of the Loan Documents and the
performance by each Loan Party of the respective terms of the Loan Documents do
not (a) conflict with or result in a violation of (i) the Certificate of
Incorporation or Bylaws of any Loan Party, the Senior Subordinated Note
Indenture or any material agreement, instrument or judicial or regulatory order
listed in Sections 4.10, 4.11, 4.12 or 4.13 of the Disclosure Schedule to the
Acquisition Agreement, or (ii) any applicable provision of the federal laws of
the United States (including, without limitation, Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System) or of the laws of the
States of Texas and New York, or (b) result in any Loan Party being obligated
to create or impose any Lien upon any of its Property under any such material
agreement, instrument or judicial or regulatory order listed in the Officers'
Certificates, other than those contemplated by the Credit Agreement.
5. Except for the recording of the Mortgages, the filing of the
Financing Statements and the filings with the U.S. Copyright Office and the
U.S. Patent and Trademark Office referred to in paragraph 14 below, no
approval, authorization or other action by or filing with any governmental
authority of the State of Texas or the State of New York or pursuant to the
federal laws of the United States is required in connection with the execution
and delivery by any Loan Party of the Loan Documents.
6. Except as described in the schedule of litigation heretofore
furnished to each Lender by each Loan Party, there are, to our knowledge, no
actions, suits or proceedings pending or threatened against any Loan Party
before any court or arbitrator(s) or by or before any administrative agency or
governmental authority, (a) relating to the Loan Documents or the Acquisitions,
or (b) in which there is a reasonable possibility of an adverse decision that
could have a material adverse effect on the financial condition or business of
the Borrower and the Designated Subsidiaries taken as a whole.
Page 4
November 1, 1996
7. Assuming the accuracy of the representations and warranties
set forth in each subscription document of limited partners of Hicks, Muse,
Tate & Furst Equity Fund III, L.P. and that there is no violation by any such
limited partner of Section 48(a) of the Investment Company Act of 1940, as
amended (the "1940 Act"), none of the Loan Parties is an "investment company"
that is required to be registered under the 1940 Act.
8. None of the Loan Parties is a "holding company," or a
"subsidiary company" of a "holding company," or an affiliate of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
9. The form of the Deed of Trust, the acknowledgments thereto and
the Deed of Trust Financing Statement comply with all applicable recording,
filing and registration laws and regulations of the State of Texas. The
property descriptions of the real properties contained in the Deed of Trust
situated in the State of Texas, if accurate, are in proper form for purposes of
all applicable, filing, and registration laws.
10. A fully executed counterpart of the Deed of Trust should be
filed for record in the offices of the respective county clerks of each of the
counties in the State of Texas in which the Trust Property (as such term is
defined in the Deed of Trust) is situated and a fully executed counterpart of
the Deed of Trust Financing Statement should be filed in the Office of the
Secretary of State of Texas. No other filings are necessary or appropriate for
the purposes intended to be accomplished thereby, other than continuation
statements as required by the Uniform Commercial Code as in effect in the State
of Texas (the "Texas UCC"). Upon such filing, the Deed of Trust will
constitute as security for the Obligations (as such term is defined in the Deed
of Trust) (a) a valid mortgage lien on all real property and interests in real
property accurately and specifically described in the Deed of Trust as being
mortgaged thereby, and (b) a perfected security interest in all tangible
personal property and fixtures adequately described in the Deed of Trust as
being mortgaged thereby to the extent that the Texas UCC is applicable thereto.
11. The Guarantee and Collateral Agreement creates valid security
interests in favor of the Administrative Agent in the Collateral (as such term
is defined in the Guarantee and Collateral Agreement), under the laws of the
State of New York, as security for the Obligations (as such term is defined in
the Guarantee and Collateral Agreement).
Page 5
November 1, 1996
12. The Collateral Agreement Financing Statement is in
appropriate form for filing in the State of Texas, and the filing of the
Collateral Agreement Financing Statement in the Office of the Texas Secretary
of State (together with the payment of all applicable filing fees) will result
in the perfection of the Administrative Agent's security interests in the
Filing Collateral (as such term is hereinafter defined). As used herein, the
term "Filing Collateral" means all of the Collateral other than Instruments,
Intellectual Property, and Pledged Securities (as such terms are defined in the
Guarantee and Collateral Agreement) and all proceeds and products thereof.
13. Assuming that the Administrative Agent obtains and maintains
possession of all Instruments and all Pledged Securities (as such terms are
defined in the Guarantee and Collateral Agreement) in the State of New York,
the Administrative Agent will have a duly perfected security interest in such
Instruments and Pledged Securities, which, in the case of the Administrative
Agent's security interest in the Pledged Stock, will be free of any adverse
claim.
14. Upon (a) the filing of financing statements in the appropriate
jurisdictions and the payment of all applicable filing fees, and (b) the
recording of the Guarantee and Collateral Agreement in the U.S. Copyright
Office and the U.S. Patent and Trademark Office and the payment of all
applicable filing fees, the Administrative Agent will have a duly perfected
security interest in all Intellectual Property arising under the laws of the
United States.
15. The Pledged Stock listed on Schedule 2 to the Guarantee and
Collateral Agreement has been duly authorized and validly issued, and is fully
paid and non-assessable.
16. The Obligations (as defined in the Credit Agreement) of the
Borrower constitute "Senior Indebtedness" under and as defined in the Senior
Subordinated Note Indenture, and the Guarantor Obligations (as defined in the
Guarantee and Collateral Agreement, but limited to obligations of the type
described in clause (ii) of such definition) of each Designated Subsidiary
constitute "Guarantor Senior Indebtedness" under and as defined in the Senior
Subordinated Note Indenture.
Our opinions are subject in all respects to the following
qualifications, exceptions, assumptions and limitations.
(a) The opinions set forth above are subject, as to
enforceability, to the effect of (i) any applicable bankruptcy (including,
without limitation, preference and fraudulent conveyance), insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and (ii) general principles of equity (regardless of whether
considered in proceedings in equity or at law), including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief.
Page 6
November 1, 1996
(b) With respect to our perfection opinions set forth in
paragraphs 10, 12 and 14 above, we note that continuation statements as
required by the Texas UCC must be filed in order to maintain the effectiveness
of the filing of the Financing Statements. We also note that in the case of
property that becomes Collateral or Trust Property after the date hereof,
Section 552 of the Federal Bankruptcy Code limits the extent to which property
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. We
call to your attention that the perfection of the security interests described
in paragraphs 10, 12 and 14 above (collectively, the "Security Interests") will
lapse (i) as to any Collateral or Trust Property (as to which the filing of a
financing statement is necessary) acquired by any Loan Party more than four
months after such Loan Party so changes its name, identity or corporate
structure as to make the Financing Statements seriously misleading, unless new
appropriate financing statements indicating the new name, identity or corporate
structure of such Loan Party are properly filed before the expiration of such
four months, and (ii) as to any Collateral or Trust Property consisting of
accounts, general intangibles, mobile goods and (in the case of a
non-possessory security interest) chattel paper, four months after any Loan
Party changes its chief executive office to a new jurisdiction outside the
state of Texas to the extent that such Loan Party's chief executive office is
located in the State of Texas (or, if earlier, when perfection under the laws
of the State of Texas would have ceased as a result to the failure to file a
required continuation statement) unless such Security Interests are perfected
in such new jurisdiction before that termination. Except as expressly set
forth in paragraph 13 above as to the Pledged Stock, we express no opinion as
to the priority of any lien or security interest created by the Loan Documents.
We express no opinion with respect to the perfection of the Administrative
Agent's security interests in any property except as set forth in paragraphs
10, 12, 13 and 14 above. We also note that in the case of the Administrative
Agent's Security Interests in proceeds, continuation of perfection of the
Administrative Agent's Security Interests therein is limited to the extent set
forth in the New York UCC and the Texas UCC (collectively, the "UCC"). We
further note that the Administrative Agent's remedies under the Guarantee and
Collateral Agreement to sell or dispose of the Pledged Stock are subject to
compliance with applicable state and federal securities laws. In addition, in
rendering our opinions set forth in paragraph 13 above, we have assumed that
the Lenders are "bona fide purchasers" as defined in Section 8-302 of the New
York UCC.
(c) We express no opinion with respect to the perfection of the
Administrative Agent's Security Interests in the case of any Collateral or
Trust Property (i) that is subject to a state statute or a statute or treaty of
the United States that provides for a certificate of title or national or
international registration; (ii) constituting goods that are installed or
affixed to, or become a part of a product or mass with goods that are not items
of Collateral or Trust Property; (iii) constituting accounts that are due from
the United States or any State of the United States or any agency or department
of the United States or any State; (iv) constituting goods that are or become
fixtures except for fixtures located on the real property portions of the Trust
Property; (v) consisting of
Page 7
November 1, 1996
consumer goods, equipment used in farming operations, farm products, crops,
timber, minerals and the like (minerals that are a part of the Trust Property
are covered by the Deed of Trust as heretofore stated) or accounts or general
intangibles resulting from the sale thereof, beneficial interests in a trust or
decedent's estate, letters of credit, policies of insurance, and deposit
accounts. Except as set forth in paragraph 13 above, we also express no
opinion with respect to the perfection of the Administrative Agent's Security
Interests in any Collateral or Trust Property to the extent that, pursuant to
the provisions of Section 9.103 of the Texas UCC, the law of a state other than
Texas governs the perfection of such Security Interests (including, without
limitation, to the extent that (i) except in the case of inventory and
equipment constituting non-mobile goods, any Loan Party may have its chief
executive office in a state other than Texas, or (ii) any Collateral or Trust
Property constituting non-mobile goods may be located in a state other than
Texas).
(d) With respect to any assignment of rents contained in the Loan
Documents, we note that to the extent that any such assignment of rents is
characterized as an assignment for security purposes, under Texas case law such
assignment does not become operative unless or until the Administrative Agent
obtains possession of the real property involved, impounds the rents, secures
the appointment of a receiver, or takes some other similar action.
(e) We have made no examination of, and express no opinion with
respect to, the accuracy or sufficiency of the description of any portion of
the Collateral or the Trust Property. To the contrary, we have assumed,
without investigation, the accuracy and sufficiency of the descriptions of all
the Collateral and the Trust Property. We have assumed, with your permission
and without investigation, that the respective Loan Parties have marketable
title to all personal property and good and indefeasible title to all real
property encumbered by the Loan Documents.
(f) We do not intend by the opinions expressed above with respect
to enforceability to indicate that the due-on-sale and due-on-encumbrance
provisions and other restrictions on transfer contained in the Loan Documents
are in all respects enforceable. In that connection we call your special
attention to Section 9.311 of the Texas UCC with respect to personal property
and to Metropolitan Sav. & Loan Assoc. v. Nabours, 652 S.W.2d 820 (Tex. Civ.
App.--Tyler, 1983, writ dism'd w.o.j.) and Abramoff v. Life Ins. Co. of George,
92.B.R. 698 (Bankr. W.D. Tex. 1988) with respect to the real property covered
by the Deed of Trust.
(g) We express no opinion with respect to the following provisions
to the extent that the same are contained in the Loan Documents:
(i) provisions purporting to waive rights to notices,
objections, demands, legal defenses, statutes of limitations, rights
to trial by jury, or other benefits or rights that cannot be waived
under applicable law;
Page 8
November 1, 1996
(ii) provisions purporting to affect the jurisdiction or
venue of courts;
(iii) provisions granting to the Administrative Agent
powers of attorney or authority to execute documents or to act by
power of attorney on behalf of another party;
(iv) provisions purporting to provide remedies
inconsistent with the UCC, to the extent that the UCC is applicable
thereto and to the extent that such remedies may not be altered by the
consent of the parties pursuant to the provisions of the UCC;
(v) provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for
its own action or inaction, to the extent the same are inconsistent
with public policy;
(vi) provisions purporting to establish evidentiary
standards, for suits or proceedings to enforce the Loan Documents;
(vii) provisions that decisions by a party are conclusive;
and
(viii) provisions relating to subrogation, offset rights,
and liquidated damages.
(h) With respect to the Mortgages, we express no opinion with
respect to the enforceability thereof to the extent that, under the conflict of
law statutes and rules of the States of New York and Texas (including, without
limitation, Section 1-105 of the New York UCC and Section 1.105 of the Texas
UCC), the laws of a state other than New York or Texas manditorily govern the
enforceability of the Mortgages.
(i) As to matters with respect to which our opinion is stated to
be "to our knowledge" or words of similar effect, we have not undertaken any
independent examination of facts, but have based our opinion in sole reliance
upon the Officers' Certificates and upon matters of which the attorneys in our
Firm who have devoted time to this matter have current actual knowledge.
(j) We have not been called upon to, and accordingly do not,
express any opinion as to the various state and federal laws regulating banks
or the conduct of their business that may relate to the Loan Documents or the
transactions contemplated thereby. Without limiting the generality of the
foregoing, we express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any Lender may be located
or where an enforcement of the Loan Documents may be sought that limits the
rates of interest legally chargeable or collectable.
Page 9
November 1, 1996
(k) The opinions expressed herein are as of the date hereof only,
and we assume no obligation to update or supplement such opinions to reflect
any fact or circumstance that may hereafter come to our attention or any change
in law that may hereafter occur or become effective.
(l) The opinions herein expressed and the statements herein made
are limited in all respects to the laws of the State of New York, the General
Corporation Law of the State of Delaware, the applicable federal laws of the
United States, and, as indicated in paragraphs 3(b), 5, 9, 10, 12, and 14 above
and the related exceptions, the laws of the State of Texas.
The opinions herein have been furnished at your request and are solely
for your benefit in connection with the subject transaction and may not be
relied upon by any other Person or furnished to anyone else without the prior
written consent of the undersigned (provided that copies of this opinion may be
furnished to regulatory authorities, Transferees, and prospective Transferees).
Very truly yours,
VINSON & ELKINS L.L.P.
EXHIBIT A
Addressees
Morgan Stanley Senior Funding, Inc.,
as Documentation Agent
Bankers Trust Company,
as Syndication Agent
The Chase Manhattan Bank,
as Administrative Agent
The Lenders now or hereafter parties
to the Credit Agreement referred to above
EXHIBIT G-1 TO THE CREDIT AGREEMENT
[FORM OF TERM NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
TRANCHE [A][B][C] TERM NOTE
$______________ New York, New York
November 1, 1996
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL HOME FOODS,
INC., a Delaware corporation (the "Borrower"), hereby unconditionally promises
to pay to the order of _____________________(the "Lender") and its registered
assigns, at the office of The Chase Manhattan Bank, located at 270 Park Avenue,
New York, New York 10017, in lawful money of the United States of America and
in immediately available funds, the principal amount of ________________ ______
DOLLARS ($_________), or, if less, the unpaid principal amount of the Tranche
[A][B][C] Term Loan made by the Lender pursuant to Section 2.1 of the Credit
Agreement (as defined below). The principal amount of the Tranche [A][B][C]
Term Loan made by the Lender shall be paid in the amounts and on the dates
specified in Section 2.3 of the Credit Agreement. The Borrower further agrees
to pay interest in like money at such office on the unpaid principal amount of
the Tranche [A][B][C] Term Loan made by the Lender from time to time
outstanding at the rates and on the dates specified in Section 2.14 of the
Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of the Tranche [A][B][C] Term Loan made by the Lender and the date and amount
of each payment or prepayment of principal with respect thereto, each
conversion of all or a portion thereof to another Type, each continuation of
all or a portion thereof as the same Type and, in the case of Eurodollar Loans,
the length of each Interest Period and the Eurodollar Rate with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed, provided that the failure to make any
such endorsement or any error in such endorsement shall not affect the
obligation of the Borrower to repay the Tranche [A][B][C] Term Loans (with
applicable interest) in accordance with the terms of the Credit Agreement.
This Note (a) is one of the Tranche [A][B][C] Term Notes
referred to in the Credit Agreement, dated as of November 1, 1996 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Lender, the other banks, financial
institutions and other entities from time to time parties thereto, Morgan
Stanley Senior Funding, Inc., as Documentation Agent, Bankers Trust Company, as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent, (b)
is subject to the provisions of the Credit Agreement and (c) is subject to
2
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the
rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement. All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
INTERNATIONAL HOME FOODS, INC.
By
-----------------------------------
Title:
Schedule A
to Tranche [A][B][C] Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------------
Amount of ABR
Amount of Loans Converted Unpaid Principal
Amount of ABR Amount Converted to Principal of ABR to Eurodollar Balance of ABR Notation Made
Date Loans ABR Loans Loans Repaid Loans Loans By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
4
Schedule B
to Tranche [A][B][C] Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------------
Amount Unpaid
Converted to or Interest Period Amount of Amount of Principal
Amount of Continued as and Eurodollar Principal of Eurodollar Loans Balance of
Eurodollar Eurodollar Rate with Eurodollar Loans Converted to ABR Eurodollar Notation
Date Loans Loans Respect Thereto Repaid Loans Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT G-2 TO THE CREDIT AGREEMENT
[FORM OF REVOLVING CREDIT NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
REVOLVING CREDIT NOTE
$__________________ New York, New York
November 1, 1996
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL HOME FOODS,
INC., a Delaware corporation (the "Borrower"), hereby unconditionally promises
to pay to the order of ________________ (the "Lender") and its registered
assigns, at the office of The Chase Manhattan Bank, located at 270 Park Avenue,
New York, New York 10017, in lawful money of the United States of America and
in immediately available funds, on the Revolving Credit Termination Date, the
principal amount of ________________ DOLLARS ($___________), or, if less, the
aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to the Borrower pursuant to Section 2.4 of the Credit Agreement (as
defined below). The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount of Revolving Credit Loans made by
the Lender from time to time outstanding at the rates and on the dates
specified in Section 2.14 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made by the Lender and the date and amount of
each payment or prepayment of principal thereof, each conversion of all or a
portion thereof to another Type, each continuation of all or a portion thereof
as the same Type and, in the case of Eurodollar Loans, the length of each
Interest Period and the Eurodollar Rate with respect thereto. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed, provided that the failure to make any such endorsement or
any error in such endorsement shall not affect the obligation of the Borrower
to repay Revolving Credit Loans (with applicable interest) in accordance with
the terms of the Credit Agreement.
This Note (a) is one of the Revolving Credit Notes referred to
in the Credit Agreement, dated as of November 1, 1996 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Lender, the other banks, financial
institutions and other entities from time to time parties thereto, Morgan
Stanley Senior Funding, Inc., as Documentation Agent, Bankers Trust Company, as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent, (b)
is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the
2
meanings given to them in the Credit Agreement. This Note is secured and
guaranteed as provided in the Loan Documents. Reference is hereby made to the
Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in
respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement. All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
INTERNATIONAL HOME FOODS, INC.
By
-----------------------------------
Title:
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Made Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------------
Amount Converted Interest Period Amount of Amount of
to or Continued and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Amount of as Eurodollar Rate with Respect Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Thereto Repaid Loans Eurodollar Loans By Made
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT G-3 TO CREDIT AGREEMENT
[FORM OF SWING LINE NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
SWING LINE NOTE
New York, New York
$___________________ November 1, 1996
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL HOME FOODS,
INC., a Delaware corporation (the "Borrower"), hereby unconditionally promises
to pay to the order of _____________ (the "Swing Line Lender") and its
registered assigns, at the office of The Chase Manhattan Bank, located at 270
Park Avenue, New York, New York 10017, in lawful money of the United States of
America and in immediately available funds, on the Revolving Credit Termination
Date, the principal amount of _______________ DOLLARS ($____________) or, if
less, the aggregate unpaid principal amount of the Swing Line Loans made by the
Swing Line Lender to the Borrower pursuant to Section 2.6 of the Credit
Agreement (as defined below). The Borrower further agrees to pay interest in
like money at said office on the unpaid principal amount of Swing Line Loans
from time to time outstanding at the rates and on the dates specified in
Section 2.14 of the Credit Agreement.
The Swing Line Lender is authorized to endorse the date and
the amount of each Swing Line Loan made by the Swing Line Lender to the
Borrower pursuant to Section 2.6 of the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof on Schedule A annexed
hereto and made a part hereof and any such recordation shall constitute prima
facie evidence of the accuracy of the information so endorsed, provided, that
any failure by the Swing Line Lender to make such endorsement or any error in
such endorsement shall not affect the obligation of the Borrower to repay the
Swing Line Loans (with applicable interest) in accordance with the terms of the
Credit Agreement.
This Note (a) is the Swing Line Note referred to in the Credit
Agreement, dated as of November 1, 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrower, the Lender, the other banks, other financial institutions
and other entities from time to time parties thereto (the "Lenders"), Morgan
Stanley Senior Funding, Inc., as Documentation Agent, Bankers Trust Company, as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent for
the Lenders, (b) is subject to the provisions of the Credit Agreement and (c)
is subject to optional and mandatory prepayment in whole or in part as provided
in the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to
2
the Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in
respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement. All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
INTERNATIONAL HOME FOODS, INC.
By
-----------------------------------
Title:
Schedule I to
Swing Line Note
SWING LINE LOANS AND REPAYMENTS
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------------------------------------
Unpaid
Amount of Swing Amount of Swing Principal Balance
Line Loans Line Loans of Swing Line
Date Made Repaid Loans Notation Made By
-------------------------------------------------------------------------------------------------------------------------
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Dates Referenced Herein and Documents Incorporated by Reference
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