<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
November 1, 1999
AURORA FOODS INC.
(Exact Name of Registrant as Specified in Its Charter)
333-50681
---------
Commission File Number
DELAWARE 94-3303521
-------- ----------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation)
456 Montgomery Street, Suite 2200
San Francisco, CA 94104
(Address of Principal Executive Office, Including Zip Code)
(415) 982-3019
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
- ---------------------------------------------
On November 1, 1999, Aurora Foods Inc. (the "Company") (NYSE: AOR), a leading
producer and marketer of premium branded foods completed the acquisition (the
"Acquisition") of substantially all of the assets of the Lender's Bagels
business ("Lender's") from The Eggo Company ("Eggo"), a subsidiary of the
Kellogg Company ("Kellogg's"). These assets include (i) Lender's(R) and
associated trademarks, (ii) the manufacturing facilities located in Mattoon, IL
and West Seneca, NY, plus substantially all of the equipment for the manufacture
of Lender's(R) products currently located in Kellogg's West Haven, Connecticut
facility, (iii) proprietary formulations for Lender'(R) products, (iv) other
product specifications and customer lists and (v) rights under certain
contracts, licenses, purchase orders and other arrangements and permits. The
Company intends to use the acquired assets in its operation of the Lender's(R)
business. The purchase price of approximately $275 million was based on arms'
length negotiations between the Company and Eggo.
The Company financed the Acquisition and related costs with additional senior
bank borrowings of $275 million. The additional senior secured bank debt was
incurred under the Company's Fifth Amended and Restated Credit Agreement (the
"Credit Agreement"). Pursuant to this amendment, The Chase Manhattan Bank acts
as administrative agent for the lenders listed in the Credit Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b). Financial Statements of Business Acquired; Pro Forma Financial
Information. Providing the financial statements and pro forma financial
information required by this item is not practical at the time of this
report on Form 8-K. Such financial statements and pro forma financial
information are expected to be filed within 60 days of this filing by an
amendment to this report on Form 8-KA.
(c) Exhibits. The following exhibits are filed herewith in accordance with
Item 601 of Regulation S-K:
2.1 Asset Purchase Agreement dated September 24, 1999 between Aurora Foods
Inc. and The Eggo Company.
10.1 Fifth Amended and Restated Credit Agreement dated November 1, 1999 and
entered into by and among Aurora Foods Inc., as Borrower, the Lenders
listed therein, The Chase Manhattan Bank, as Administrative Agent for
the lenders, National Westminster Bank PLC, as Syndication Agent and
UBS AG, Stamford Branch, as Documentation Agent.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AURORA FOODS INC.
(Registrant)
By: /s/ M. Laurie Cummings
----------------------
M. Laurie Cummings
Chief Financial Officer and Secretary
Date: November 10, 1999
2
<PAGE>
________________________________________________________________________________
Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and between
THE EGGO COMPANY
and
AURORA FOODS INC.
____________________________
Dated as of September 24, 1999
____________________________
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
1. Definitions; Purchase and Sale of Assets; Assumption of Liabilities......... 1
-------------------------------------------------------------------
(a) Certain Definitions.................................................. 1
-------------------
(b) Purchase and Sale of Assets.......................................... 2
---------------------------
(c) Excluded Assets...................................................... 4
---------------
(d) Assumed Liabilities.................................................. 5
-------------------
(e) Excluded Liabilities................................................. 6
--------------------
(f) Purchase Price....................................................... 7
--------------
(g) Allocation of Purchase Price......................................... 7
----------------------------
2. Closing; Purchase Price Adjustment; Property Expense Apportionment.......... 8
------------------------------------------------------------------
(a) Closing.............................................................. 8
-------
(b) Purchase Price Adjustment............................................ 10
-------------------------
(c) Property Expense Apportionment....................................... 12
------------------------------
3. Conditions to Closing....................................................... 13
---------------------
(a) Buyer's Obligation................................................... 13
------------------
(b) Seller's Obligation.................................................. 14
-------------------
4. Representations and Warranties of Seller.................................... 15
----------------------------------------
(a) Authority; Binding Effect; No Conflicts.............................. 15
---------------------------------------
(b) Financial Schedules.................................................. 16
-------------------
(c) Title to Tangible Assets Other than Real Property Interests.......... 16
-----------------------------------------------------------
(d) Title to Real Property............................................... 17
----------------------
(e) Condition of Assets.................................................. 17
-------------------
(h) Litigation; Decrees.................................................. 20
-------------------
(i) Absence of Changes or Events......................................... 20
----------------------------
(j) Compliance with Applicable Laws...................................... 21
-------------------------------
(k) Environmental Laws................................................... 21
------------------
(l) Permits.............................................................. 22
-------
(m) Asset Sufficiency.................................................... 22
-----------------
(n) Inventory............................................................ 22
---------
(o) Insurance............................................................ 22
---------
(p) Labor Matters........................................................ 23
-------------
(q) ERISA................................................................ 23
-----
(r) Recipes; Ingredients................................................. 23
--------------------
(s) Brokers.............................................................. 23
-------
5. Covenants of Seller......................................................... 23
-------------------
(a) Access............................................................... 23
------
(b) Ordinary Conduct..................................................... 23
----------------
(c) Confidentiality...................................................... 24
---------------
(d) Covenant Not To Compete.............................................. 24
-----------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(e) Nonsolicitation.................................................... 24
---------------
(f) No Shop............................................................ 25
-------
(g) Delivery of Financial Information.................................. 25
---------------------------------
(h) Use of Technology.................................................. 25
-----------------
(i) Surveys............................................................ 26
-------
(j) West Haven Equipment............................................... 26
--------------------
(k) Customer Deductions................................................ 26
-------------------
6. Representations and Warranties of Buyer................................... 27
---------------------------------------
(a) Authority; No Conflicts............................................ 27
-----------------------
(b) Actions and Proceedings, etc....................................... 28
-----------------------------
(c) Availability of Funds.............................................. 28
---------------------
(d) Brokers............................................................ 28
-------
7. Covenants of Buyer........................................................ 28
------------------
(a) Confidentiality.................................................... 28
---------------
(b) Accounts Receivables............................................... 29
--------------------
(c) Customer Deductions................................................ 29
-------------------
(d) Customer and Supplier Notification................................. 29
----------------------------------
(e) Use of Seller's Name or Reputation/Packaging Materials............. 30
------------------------------------------------------
8. Mutual Covenants.......................................................... 30
----------------
(a) Consents........................................................... 30
--------
(b) Cooperation........................................................ 30
-----------
(c) Publicity.......................................................... 31
---------
(d) Best Efforts....................................................... 31
------------
(e) HSR Act Compliance................................................. 31
------------------
(f) Sales and Transfer Taxes........................................... 31
------------------------
(g) Delivery of Books and Records, etc................................. 32
-----------------------------------
(h) Transition of Business............................................. 32
----------------------
(i) Tax Controversies.................................................. 33
-----------------
(j) Employees.......................................................... 33
---------
9. Further Assurances........................................................ 36
------------------
10. Indemnification........................................................... 36
---------------
(a) Indemnification by Seller.......................................... 36
-------------------------
(b) Indemnification by Buyer........................................... 37
------------------------
(c) Limitations on Indemnity........................................... 37
------------------------
(d) Exclusive Remedy................................................... 37
----------------
(e) Termination of Indemnification..................................... 37
------------------------------
(f) Procedures Relating to Indemnification............................. 38
--------------------------------------
11. Assignment................................................................ 40
----------
12. No Third-Party Beneficiaries.............................................. 40
----------------------------
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
13. Termination........................................................... 40
-----------
14. Survival of Representations; No Other Representations................. 41
-----------------------------------------------------
15. Expenses.............................................................. 42
--------
16. Amendment and Waiver.................................................. 42
--------------------
17. Notices............................................................... 42
-------
18. Interpretation........................................................ 43
--------------
19. No Strict Construction................................................ 43
----------------------
20. Counterparts.......................................................... 43
------------
21. Entire Agreement...................................................... 43
----------------
22. Schedules............................................................. 44
---------
23. Severability.......................................................... 44
------------
24. Bulk Transfer Laws.................................................... 44
------------------
25. Governing Law......................................................... 44
-------------
26. Exhibits and Schedules................................................ 44
----------------------
27. Assignment; Guarantee................................................. 44
---------------------
</TABLE>
(iii)
<PAGE>
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Accounting Firm............................................................ 11
Adjustment Date............................................................ 12
Agreement.................................................................. 1
Applicable Rate............................................................ 11
Assets..................................................................... 2
Assumed Liabilities........................................................ 5
Books and Records.......................................................... 3
Business................................................................... 1
Business Contracts......................................................... 2
Buyer...................................................................... 1
CBA........................................................................ 5
CERCLA..................................................................... 22
Closing.................................................................... 8
Closing Date............................................................... 8
Closing Statement.......................................................... 10
Code....................................................................... 8
Commitment Letter.......................................................... 28
Confidentiality Agreement.................................................. 28
Contract................................................................... 1
EBITDA..................................................................... 16
Environmental Laws......................................................... 22
Environmental Reports...................................................... 21
Equipment.................................................................. 2
equitable manner........................................................... 12
Estimated Final Purchase Price............................................. 8
Excluded Assets............................................................ 4
Excluded Business.......................................................... 1
Excluded Contracts......................................................... 4
Excluded Liabilities....................................................... 6
Existing Permits........................................................... 22
File Plan.................................................................. 32
Final Purchase Price....................................................... 11
Financial Schedules........................................................ 16
GAAP....................................................................... 10
Governmental or Regulatory Authority....................................... 1
HSR Act.................................................................... 13
Indemnified Party.......................................................... 38
Information................................................................ 24
Initial Purchase Price..................................................... 7
Initial Statement.......................................................... 16
Intellectual Property...................................................... 3
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Inventory.................................................................. 2
knowledge.................................................................. 2
Laws....................................................................... 1
Leased Property............................................................ 17
Liens...................................................................... 1
Material Adverse Effect.................................................... 13
Notice of Disagreement..................................................... 10
Order...................................................................... 1
Other Intellectual Property................................................ 18
Owned Property............................................................. 3
Permits.................................................................... 22
Permitted Liens............................................................ 17
Person..................................................................... 2
Policies................................................................... 13
Policy..................................................................... 13
Products................................................................... 2
Properties................................................................. 17
Property................................................................... 17
Prorated Amounts........................................................... 12
Purchase Orders............................................................ 3
RCRA....................................................................... 22
Restricted Assets.......................................................... 10
Restricted Business........................................................ 24
Seller..................................................................... 1
Seller Information......................................................... 29
Surveys.................................................................... 26
Taxes...................................................................... 2
Third Party Claim.......................................................... 38
Title Company.............................................................. 13
Union...................................................................... 5
</TABLE>
(ii)
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of September 24,
---------
1999, by and between AURORA FOODS INC., a Delaware corporation, ("Buyer"), and
-----
THE EGGO COMPANY, a Delaware corporation ("Seller");
------
W I T N E S S E T H:
-------------------
WHEREAS, Seller desires to sell all of the Assets, and Buyer desires to
purchase the Assets and to assume all of the Assumed Liabilities, upon the terms
and subject to the conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions; Purchase and Sale of Assets; Assumption of
-------------------------------------------------------
Liabilities.
-----------
(a) Certain Definitions. As used in this Agreement (including the
-------------------
Schedules and Exhibits hereto), the following definitions shall apply:
(i) "Business" shall mean the business currently conducted by Seller
--------
and its affiliates relating to the manufacture, packaging, marketing,
distribution and/or sale of the Products in the United States and Canada.
(ii) "Excluded Business" shall mean any business currently or
-----------------
hereafter conducted by Seller, its affiliates and/or their licensees other
than the Business.
(iii) "Contract" means any agreement, lease, license, evidence of
--------
indebtedness, mortgage, indenture, security agreement or other legally
binding arrangement, whether oral or written.
(iv) "Governmental or Regulatory Authority" means any court,
------------------------------------
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic
or foreign state, county, city or other political subdivision.
(v) "Laws" means all laws, statutes, rules, regulations, ordinances
----
and other pronouncements having the effect of law of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental or Regulatory Authority.
(vi) "Liens" means any mortgage, pledge, assessment, security
-----
interest, lease, lien, adverse claim, levy, charge, restriction or other
encumbrance of any kind.
(vii) "Order" means any judgment, decree, injunction or similar order
-----
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
<PAGE>
(viii) The term "knowledge," when used in the phrase "to the
--------- ------
knowledge of Seller," shall mean, and shall be limited to, the actual
-------------------
knowledge of the officers and employees of Seller listed in Schedule
--------
1(a)(viii) attached hereto.
----------
(ix) "Person" shall mean any individual, corporation, partnership,
------
limited liability company, business trust, joint stock company, trust,
unincorporated organization, joint venture, firm or other entity, or a
government or any political subdivision or agency, department or
instrumentality thereof.
(x) "Products" shall mean frozen, refrigerated and fresh bagels.
--------
(xi) "Taxes" shall mean any federal, state, local, foreign or other
-----
taxes, including income (net or gross), gross receipts, profits,
alternative or add-on minimum, franchise, license, capital, capital stock,
intangible, services, premium, mining, transfer, sales, use, ad valorem,
payroll, wage, severance, employment, occupation, property (real or
personal), windfall profits, import, excise, custom, stamp, withholding or
governmental charges of any kind whatsoever (including interest, penalties,
additions to tax or additional amounts with respect to such items).
(b) Purchase and Sale of Assets. On the terms and subject to the
---------------------------
conditions of this Agreement, Seller will sell, transfer, convey, assign and
deliver to Buyer, and Buyer will purchase and pay for, at the Closing, all of
Seller's right, title and interest in, to and under the following assets,
properties and rights of Seller used in connection with the Business, except as
otherwise provided in Section 1(c), as the same shall exist on the Closing Date
------------
(collectively, the "Assets"):
------
(i) all (A) inventories of raw materials, packaging materials, work
in process and stores inventory (equipment replacement parts) located at
the Properties, (B) inventories of raw materials, packaging materials and
work in process located at the West Haven, New Haven and Island Lane
facilities and (C) finished Products, in the case of each of (B) or (C)
that are used exclusively in the conduct of the Business (the "Inventory");
---------
(ii) (A) all machinery, equipment, furniture, fixtures, supplies and
other tangible assets (other than the items excluded pursuant to Section
-------
1(c)) located on the Properties, (B) all such assets customarily located on
----
the Properties which are temporarily located off-premises for repair, (C)
the machinery and equipment used exclusively in the manufacture of
bagellettes located at the West Haven, Connecticut facility and (D) all
vehicles, in each case used exclusively in the conduct of the Business (the
"Equipment");
---------
(iii) all Contracts (including leases for both real and personal
property), (A) that are listed or described on Schedule 1(b)(iii) attached
------------------
hereto and (B) if not so listed or described and if not Excluded Contracts
(as defined in Section 1(c)), which are utilized exclusively in the conduct
of the Business (collectively, the "Business Contracts"), and all
------------------
commitments and orders for the purchase and sale of goods and equipment
(including Inventory and supplies) and services (including advertising,
maintenance and other
-2-
<PAGE>
incidental services) to the extent relating exclusively to the Business
(collectively, the "Purchase Orders");
---------------
(iv) (A) all patents, copyrights, trademarks, trade names and service
marks, and any applications and registrations therefor, used exclusively in
the conduct of the Business, including those that are listed or described
on Schedule 1(b)(iv) attached hereto, and any rights, benefits and
-----------------
privileges pertaining thereto, all goodwill associated therewith and all
rights to causes of action or remedies related thereto, including the right
to sue for past infringement, (B) all existing trade secrets, know-how,
recipes, product formulations, processing procedures and finished product
specifications, marketing and sales plans, market information, product
development information, title reports, title policies, engineering and
environmental studies, technical data, work standards and manufacturing,
assembling and process information, designs, processes, operating manuals,
operating data and plans, engineering drawings, working drawings,
schematics, blueprints, flowsheets and models, and waste disposal records
and other confidential information and all other intangible property
relating exclusively to the Business or to pretzels or Bagel Toppers
(including product concepts and prototypes) and (C) a non-exclusive grant
of recipes used but not used exclusively in the conduct of the Business
(collectively, the "Intellectual Property");
---------------------
(v) all computer software and hardware listed or described on
Schedule 1(b)(v) attached hereto;
----------------
(vi) subject to Section 8(g), all existing sales and promotional
------------
materials, point-of-sale materials and advertising copy used by Seller
exclusively in the conduct of the Business, all existing customer and
vendor lists and price lists to the extent relating exclusively to the
Business and, subject to Section 2(a)(iii), all archival materials relating
-----------------
exclusively to the Products;
(vii) the real property listed or described on Schedule 1(b)(vii)
------------------
attached hereto (Mattoon, Illinois and West Seneca, New York)
(collectively, the "Owned Property"), together with all buildings, fixtures
--------------
and improvements located thereon, and all privileges and easements
appurtenant thereto, and all right, title and interest of Seller in the
leasehold improvements and fixtures located on the Leased Property;
(viii) to the extent transferable, all Universal Product Codes
relating exclusively to the Products and any permits or licenses issued by
any Governmental or Regulatory Authority that are used exclusively in the
Business;
(ix) all goodwill relating exclusively to the Products and the
Business;
(x) subject Section 8(g), all books and records relating exclusively
------------
to the Business, including books of account, accounting records and
inventory records (the "Books and Records");
-----------------
(xi) all prepaid expenses relating exclusively to the Business; and
-3-
<PAGE>
(xii) all other assets, properties and rights of Seller used
exclusively in connection with the Business.
(c) Excluded Assets. The Assets shall not include any assets other
---------------
than the assets specifically contemplated in Section 1(b), and,
------------
notwithstanding Section 1(b), shall expressly exclude the following
------------
(collectively, the "Excluded Assets"):
---------------
(i) all accounts and notes receivable arising out of sales
occurring in the conduct of the Business prior to the Closing Date
(including intercompany receivables);
(ii) all cash and cash equivalents of Seller;
(iii) all insurance policies and claims thereunder of Seller,
Seller's claims for and rights to receive Tax refunds relating to the
Business, all of Seller's Tax returns relating to the Business and any
notes, worksheets, files or documents relating thereto, and any legal files
or other documents covered by an evidentiary privilege that are not related
to the Assumed Liabilities;
(iv) all books, documents, records and files prepared in connection
with or relating to the transactions contemplated by this Agreement,
including bids received from other parties and analyses relating to the
Assets, the Assumed Liabilities and the Business (other than
confidentiality agreements entered into by Seller in connection with the
transactions contemplated by this Agreement, which shall be assigned to
Buyer pursuant to this Agreement);
(v) all of Seller's rights under or pursuant to this Agreement and
the other agreements between Buyer and Seller contemplated hereby;
(vi) all minute books and stockholder and stock transfer records
and similar corporate records of Seller;
(vii) the trademarks "EGGO" and "Kellogg's" and all logos, designs
and goodwill associated therewith;
(viii) all computer software and hardware, computer systems and
electronic mail applications relating to the Business, other than the
computer software and hardware specifically described in Section 1(b)(v);
---------------
(ix) any assets held directly or indirectly, in trust or otherwise,
for the purpose of paying current or future benefits to or with respect to
any current or former employee of Seller;
(x) all rights under (A) any Contracts (other than Purchase Orders)
relating exclusively to the ownership and operation of any facilities other
than the Owned Real Property, (B) any Contracts exclusively related to any
employees who are not Transferred Employees, and (C) any employee benefit
plan of seller or its affiliates (the "Excluded Contracts"); and
------------------
-4-
<PAGE>
(xi) the assets listed or described on Schedule 1(c)(xi) attached
-----------------
hereto and any other assets which are not used exclusively in connection
with the Business (together with any and all claims relating to any of the
foregoing described in this Section 1(c)).
------------
(d) Assumed Liabilities. Buyer shall assume on the Closing Date and
-------------------
shall pay, perform and discharge when due only the following obligations and
liabilities of Seller arising in connection with the operation of the Business,
of whatever kind and nature, primary or secondary, direct or indirect, absolute
or contingent, known or unknown, whether or not accrued, (collectively, together
with all other obligations and liabilities of Seller assumed by Buyer pursuant
to this Agreement and the Schedules hereto, the "Assumed Liabilities"):
-------------------
(i) all obligations and liabilities of Seller attributable to
periods commencing on or after the Closing Date under the Business
Contracts (A) listed in Schedule 1(b)(iii), (B) which are not listed in
------------------
Schedule 1(b)(iii) and were entered into by Seller in the ordinary course
------------------
of business consistent with past practice and (C) which are entered into by
Seller in the ordinary course of business consistent with past practice
between the date hereof and the Closing Date and not in violation of the
provisions of this Agreement;
(ii) all obligations, liabilities and commitments in respect of any
and all Products manufactured, formulated, marketed, sold or distributed at
any time on or after the Closing Date relating exclusively to the Business,
and in respect of any Inventory included in the Assets, including product
liability and infringement claims, obligations and liabilities arising out
of or relating to the activities and operations of third-party contract
manufacturers and co-packers;
(iii) all obligations and liabilities for refunds, advertising, trade
promotion and trade allowance programs, consumer promotions (including
free-standing inserts and other forms of coupons), adjustments, exchanges,
returns and warranty, merchantability and other claims and all pending
claims and litigation relating to any of the foregoing obligations and
liabilities;
(iv) all liabilities included in Working Capital (as defined in
Section 2(b) hereof), including but not limited to all obligations and
------------
liabilities for refunds, advertising, trade promotion and trade allowance
programs (excluding foodservice promotions), consumer promotions (including
free standing inserts and other forms of coupons), adjustments, exchanges,
returns and all obligations and liabilities related to accrued payroll and
vacation for Transferred Employees;
(v) all obligations and liabilities of Seller under Purchase Orders
that are outstanding as of the Closing Date;
(vi) all obligations and all liabilities of Seller assumed by Buyer
pursuant to Section 8(j);
(vii) all obligations and liabilities under the Collective Bargaining
Agreement between Seller and the Confectionery Tobacco Worker's Union (the
"Union") relating to the West Seneca, N.Y. facility (the "CBA");
----- ---
-5-
<PAGE>
(viii) Subject to the Seller's indemnity obligations under Section
10(g) hereof, all obligations and liabilities of the Seller whether derived
from the liability of prior owners, occupants and operators of the Owned
Property and the Leased Property or otherwise, relating to Environmental
Conditions or actual or potential violations of Environmental Law on or at
the Leased Property and the Owned Property; and
(ix) all other obligations and liabilities exclusively relating to
the Business or the Assets which are attributable to periods on or after
the Closing Date.
Notwithstanding anything to the contrary in this Agreement, Buyer
shall not assume any liabilities or obligations of Seller other than the Assumed
Liabilities and nothing herein shall be construed as imposing any liability or
obligation upon Buyer other than those specifically provided for herein.
Buyer's obligations under this Section 1(d) shall not be subject to
------------
offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or any
agreement or document delivered in connection herewith or any right or alleged
right to indemnification hereunder.
(e) Excluded Liabilities. Except for the Assumed Liabilities and as
--------------------
otherwise specifically provided in this Agreement and the Schedules hereto,
Buyer shall not assume any obligations or liabilities of Seller, including the
following (the obligations and liabilities of Seller not specifically assumed by
Buyer being referred to collectively herein as the "Excluded Liabilities"):
--------------------
(i) any of Seller's obligations or liabilities under this Agreement
and the other agreements with Buyer contemplated hereby;
(ii) any of Seller's obligations or liabilities (or expenses or
fees incident to or arising out of the negotiation, preparation, approval
or authorization of this Agreement and the other agreements contemplated
hereby or the consummation (or preparation for the consummation) of the
transactions contemplated hereby and thereby (including in connection with
the solicitation or receipt of bids from other Persons), including
attorneys' and accountants' fees;
(iii) any of Seller's obligations or liabilities with respect to
Taxes (except Taxes specifically allocated to, prorated to or assumed by
Buyer under this Agreement);
(iv) any of Seller's obligations and liabilities relating to
businesses conducted by Seller other than the Business;
(v) any intercompany debt, settlement or other liability or
obligation between the Business and Seller or any affiliate of Seller;
(vi) any obligations and liabilities of Seller not assumed by Buyer
pursuant to Section 8(j);
------------
-6-
<PAGE>
(vii) any liability or obligation relating to, resulting from or
arising out of claims based on Products manufactured and sold prior to the
Closing Date;
(viii) any of Seller's obligations and liabilities under any
collective bargaining agreement (other than the CBA), non-competition or
consulting agreement (other than such obligations and liabilities under any
Business Contract);
(ix) any liability or obligation relating to any indebtedness for
borrowed money owed by Seller to any third party or any guarantee by Seller
in favor of any third party;
(x) any liability arising out of activities undertaken by, or
omissions of, Seller on and subsequent to the Closing Date;
(xi) any liabilities arising out of the Excluded Assets;
(xii) any suit, action or other legal proceeding pending or, to
Seller's knowledge, threatened in writing against the Business or the
Assets attributable to periods prior to the Closing Date and which do not
arise out of an Assumed Liability;
(xiii) any liability or obligation arising out of the Excluded
Contracts;
(xiv) all obligations of Seller with respect to accounts payable
arising in the conduct of the Business attributable to periods prior to the
Closing Date; and
(xv) any other liabilities or obligations which are not exclusively
related to the Business (together with any and all claims relating to any
of the foregoing described in this Section 1(e)) and which do not arise out
of an Assumed Liability.
(f) Purchase Price. The aggregate purchase price for the Assets and
--------------
for the covenant of Seller contained in Section 5(d) is $275,000,000 (the
------------
"Initial Purchase Price"), payable in immediately available United States funds
----------------------
at the Closing in the manner provided in Section 2(a). The Initial Purchase
------------
Price shall be subject to adjustment as set forth in Section 2(b).
------------
(g) Allocation of Purchase Price. As promptly as practicable
----------------------------
following the date hereof, but in any event before five (5) business days prior
to the Closing Date, Buyer shall deliver to Seller copies of all appraisals of
the Assets prepared for Buyer and Buyer's reasonable, good faith determination
of the fair market value of the Assets, which determination shall be made in
accordance with applicable tax laws and shall be subject to Seller's consent
(which consent shall not be unreasonably withheld or delayed). Buyer and Seller
shall then set forth the mutually agreed upon determination on Schedule 1(g)
-------------
attached hereto. For tax purposes, the Final Purchase Price and Assumed
(noncontingent) Liabilities shall be allocated among the Assets based upon such
determination of fair market value set forth on Schedule 1(g), as adjusted to
-------------
reflect any changes that have given rise to an adjustment to the Initial
Purchase Price pursuant to Section 2(b), and in accordance with Section 1060 of
------------
the Code. Neither Buyer nor Seller, nor any of their respective affiliates,
shall take any position for income tax purposes which is inconsistent with the
allocation of the Final Purchase Price and Assumed (noncontingent)
-7-
<PAGE>
Liabilities unless required to do so by applicable law. The parties shall
exchange drafts of any information returns required by Section 1060 of the Code
and any similar state statute at least 60 days prior to filing such returns and
shall discuss in good faith any modifications suggested by the receiving party.
Notwithstanding any other provisions of this Agreement, the foregoing agreement
shall survive the Closing Date without limitation. For purposes of this
Agreement, the term "Code" shall mean the Internal Revenue Code of 1986, as
----
amended, and any reference to any particular Code provision shall be interpreted
to include any revision of or successor to such provision regardless of how
numbered or classified.
2. Closing; Purchase Price Adjustment; Property Expense
----------------------------------------------------
Apportionment.
-------------
(a) Closing. The closing (the "Closing") of the purchase and sale of
------- -------
the Assets and the assumption of the Assumed Liabilities shall be held at the
offices of Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New
York, NY 10005 at 10:00 a.m., local time, on November 1, 1999, or, if the
conditions to Closing set forth in Sections 3(a)(iii) and 3(b)(iii) shall not
------------------ ---------
have been satisfied or waived by such date, on the date that is three business
days following satisfaction or waiver of such conditions, provided, however,
-------- -------
that if any other conditions to Closing set forth in Section 3(a) or 3(b) cannot
be satisfied or waived then as soon thereafter as such conditions are satisfied
or waived. The date on which the Closing shall occur is hereinafter referred to
as the "Closing Date". The effective time of the Closing shall be the opening of
------------
business on the Closing Date.
(i) At the Closing, subject to and on the terms and conditions set
forth in this Agreement, Buyer shall deliver to Seller (A) by wire transfer
to a bank account designated in writing by Seller at least two business
days prior to the Closing Date, immediately available funds in an amount
equal to the Initial Purchase Price, plus or minus an estimate, prepared in
good faith by Seller and delivered to Buyer at least three business days
prior to the Closing Date, of any adjustment to the Initial Purchase Price
required pursuant to Section 2(b) (the Initial Purchase Price, plus or
minus any estimated adjustments thereto, being referred to herein as the
"Estimated Final Purchase Price"), (B) instruments of assumption in form
-------------------------------
and substance reasonably satisfactory to Seller and its counsel evidencing
and effecting the assumption by Buyer of the Assumed Liabilities (it being
understood, however, that such instruments shall not require Buyer or any
other Person to make any additional representations, warranties or
covenants, express or implied, not contained in this Agreement) and such
other documents as are specifically required by this Agreement, (C)
certified copies of resolutions duly adopted by Buyer's board of directors
authorizing the execution, delivery and performance of this Agreement and
the other agreements contemplated hereby, (D) certified copies of Buyer's
certificate of incorporation and bylaws, (E) a certificate of the Secretary
or an Assistant Secretary of Buyer as to the incumbency of the officer(s)
of Buyer (who shall not be such Secretary or Assistant Secretary) executing
this Agreement or the Transition Services Agreement, (F) a short-form
certificate of good standing of Buyer, certified by the Secretary of State
of Buyer's state of incorporation as of a reasonably recent date and (G) an
opinion of counsel to Buyer, in form and substance reasonably satisfactory
to Seller.
-8-
<PAGE>
(ii) At the Closing, subject to and on the terms and conditions set
forth in this Agreement, Seller shall deliver or cause to be delivered to
Buyer (A) such appropriately executed instruments of sale, assignment,
transfer and conveyance (including assignments of all trademarks and
patents included in the Intellectual Property) in form and substance
reasonably satisfactory to Buyer and its counsel evidencing and effecting
the sale and transfer to Buyer of the Assets (it being understood, however,
that such instruments shall not require Seller or any other Person to make
any additional representations, warranties or covenants, express or
implied, not contained in this Agreement), (B) an executed copy of the
Transition Services Agreement, (C) certified copies of resolutions duly
adopted by Seller's board of directors and, if required, its sole
stockholder, authorizing the execution, delivery and performance of this
Agreement and the other agreements contemplated hereby, (D) certified
copies of Seller's certificate of incorporation and bylaws, (E) a
certificate of the Secretary or an Assistant Secretary of Seller as to the
incumbency of the officer(s) of Seller (who shall not be such Secretary or
Assistant Secretary) executing this Agreement or the Transition Services
Agreement, (F) a short-form certificate of good standing of Seller,
certified by the Secretary of State of the State of Delaware as of a
reasonably recent date and (G) an opinion of counsel to Seller, in form and
substance reasonably satisfactory to Buyer, with respect to due
authorization, execution and legal validity and enforceability of this
Agreement and the Transition Services Agreement. With respect to the Owned
Property included in the Assets, such instruments to be delivered at the
Closing shall consist of deeds with warranties or covenants against
grantor's acts, substantially in the forms set forth on Schedule 2(a)(ii)
-----------------
attached hereto.
(iii) Certain of the Assets may be in the possession of third parties
on the Closing Date. Seller shall transfer possession to Buyer of all
material Assets (other than the bagellette line) on or prior to the Closing
Date and Seller shall use its reasonable best efforts to transfer
possession of all other Assets. Prior to the Closing, Seller and Buyer
shall agree on reasonable procedures and a timetable to transfer possession
of all other Assets to Buyer as soon as practicable after the Closing Date,
and Seller shall use best efforts to assist Buyer in connection with the
transfer thereof; provided, however, that such best efforts shall not
-------- -------
include any requirement of Seller or any of its affiliates to commence any
litigation or offer or grant any accommodation (financial or otherwise) to
any Person. Notwithstanding the foregoing, title and risk of loss with
respect to all of the Assets shall pass from Seller to Buyer at the Closing
Date.
(iv) As of the Closing Date there may be located on the Owned
Property and the Leased Property certain Excluded Assets. Prior to the
Closing, Seller and Buyer shall agree on reasonable procedures and
timetable to transfer such Excluded Assets to Seller at such location or
locations as shall be determined by Seller, it being understood that the
cost of transferring such Excluded Assets shall be borne by Seller and that
such transfers shall be completed within six months after the Closing Date.
After the Closing, Buyer shall grant Seller and its representatives
reasonable access to the Owned Property and the Leased Property, during
normal business hours and upon reasonable notice, in order to permit Seller
and its representatives to remove such Excluded Assets and to take such
other necessary or appropriate action with respect thereto as Seller may
reasonably
-9-
<PAGE>
determine. Buyer shall have the right to assist Seller in disassembling and
crating such Excluded Assets prior to their removal. Seller shall, at its
expense, repair any damage to the Owned Property or the Leased Property or
to any Assets located thereat caused by the removal of any Excluded Assets,
including floor holes, and shall reimburse Buyer for reasonable out-of-
pocket expenses, including labor, incurred by Buyer and for Losses to Buyer
caused specifically by disruption to Buyer's production at any Owned
Property or Leased Property due to the removal of any Excluded Assets. If
Seller fails to remove any Excluded Assets from the Owned Property or the
Leased Property within six months after the Closing Date, Buyer may, at
Seller's expense and risk, arrange for such removal and shipment to Seller,
or, if Seller refuses to accept the Excluded Assets, Buyer may, at Seller's
expense and risk, arrange for the removal and scrapping of the Excluded
Assets.
(v) Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to transfer from Seller to
Buyer any Contract, permit or license used exclusively in connection with
the Business or any intangible asset or any claim or right, or any benefit
arising thereunder or resulting therefrom (collectively, "Restricted
----------
Assets"), if an attempted transfer thereof, without the consent of a third
------
party thereto, would constitute a breach thereof or materially and
adversely affect the rights of Seller or Buyer, as the case may be,
thereunder. If such consent is not obtained, Seller will cooperate with
Buyer without further consideration in any reasonable arrangement designed
to provide for Buyer the benefits of or under any such Restricted Asset,
including without limitation enforcement for the benefit of Buyer of any
and all rights of Seller against a third party thereto arising out of the
breach or cancellation thereof by such third party.
(b) Purchase Price Adjustment. (i) Within 75 days after the Closing
-------------------------
Date, Seller shall prepare and deliver to Buyer a statement of Working Capital
(as defined below) as of the opening of business on the Closing Date (such
statement, in its final and binding form, the "Closing Working Capital
-----------------------
Statement"). The items recorded on the Closing Working Capital Statement shall
- ---------
have been recorded thereon in all material respects in accordance with U.S.
generally accepted accounting principles ("GAAP") consistently applied, except
----
as set forth on Schedule 4(b)(2). During the preparation of the Closing Working
----------------
Capital Statement and the period of any dispute with respect thereto, Buyer
shall (A) provide Seller and Seller's representatives with reasonable access
during normal business hours to the books, records (including work papers,
schedules, memoranda and other documents), facilities and employees of the
Business, (B) provide Seller as promptly as practicable following the Closing
Date (but in no event later than 30 days after the Closing Date) with normal
year-end closing financial information for the Business for the period ending as
of the opening of business on the Closing Date, and (C) cooperate fully with
Seller and Seller's representatives, including the provision on a timely basis
of all information necessary or useful in connection with the preparation of the
Closing Working Capital Statement. In connection with the preparation of the
Closing Working Capital Statement, Seller shall take and prepare a physical
count of the Inventory as of the opening of business on the Closing Date. Buyer
or its representatives may be present at such count. The Closing Working Capital
Statement shall become final and binding upon the parties on the 105th day
following the Closing Date unless Buyer gives written notice of its disagreement
(a "Notice of Disagreement") to Seller prior to such date; provided, however,
---------------------- -------- -------
that a
-10-
<PAGE>
Notice of Disagreement may not be delivered by Buyer if the amount of
disagreement is less than $500,000. Any Notice of Disagreement shall specify in
reasonable detail the nature and amount of any disagreement so asserted. If a
timely Notice of Disagreement is received by Seller, then the Closing Working
Capital Statement (as revised in accordance with clause (x) or (y) below) shall
become final and binding upon the parties on the earlier of (x) the date the
parties hereto resolve in writing any differences they have with respect to any
matter specified in the Notice of Disagreement or (y) the date any matters
properly in dispute are finally resolved in writing by the Accounting Firm.
During the 30 days immediately following the delivery of a Notice of
Disagreement, Seller and Buyer shall seek in good faith to resolve in writing
any differences which they may have with respect to any matter specified in the
Notice of Disagreement. During such period, Seller and Buyer shall each have
full access to the working papers of the other prepared in connection with
Buyer's preparation of the Notice of Disagreement. At the end of such 30-day
period, Seller and Buyer shall submit to Arthur Andersen (the "Accounting Firm")
---------------
for review and resolution of any and all matters which remain in dispute and
which were properly included in the Notice of Disagreement, and the Accounting
Firm shall make a final determination of the Closing Working Capital Statement
which shall be binding on the parties (it being understood, however, that the
Accounting Firm shall act as an arbitrator to determine, based solely on
presentations by Buyer and Seller (and not by independent review), only those
matters which remain in dispute and which were properly included in the Notice
of Disagreement). The Accounting Firm shall deliver its final resolution to the
parties as soon as practicable following the selection of the Accounting Firm.
The Accounting Firm shall be selected by Seller and Buyer or, if the parties are
unable to agree, by Seller's and Buyer's independent accountants. The fees and
expenses of the Accounting Firm pursuant to this Section 2(b) shall be borne 50%
------------
by Buyer and 50% by Seller.
(ii) The Estimated Final Purchase Price shall be either increased by
the amount by which the Working Capital reflected on the Closing Working
Capital Statement exceeds $3,500,000 or decreased by the amount by which
$3,500,000 exceeds the Working Capital reflected on the Closing Working
Capital Statement (the Estimated Final Purchase Price, as so increased or
decreased, being referred to herein as the "Final Purchase Price"). If the
--------------------
Estimated Final Purchase Price is less than the Final Purchase Price, Buyer
shall, and if the Estimated Final Purchase Price is greater than the Final
Purchase Price, Seller shall, within five business days after the Closing
Working Capital Statement becomes final and binding on the parties, make
payment to the other party by wire transfer in immediately available funds
of the amount of such difference, together with interest thereon at an
annual rate equal to the prime rate as announced by Citibank, N.A. on the
Closing Date (the "Applicable Rate") calculated on the basis of the number
---------------
of days elapsed from the Closing Date to the date of payment.
(iii) The term "Working Capital" shall mean an amount equal to (1)
---------------
the sum of (x) Inventory (excluding for this purpose stores inventory
(equipment replacement parts) in excess of $3,000,000) plus (y) prepaid
expenses related to the Business (provided, however, that Prorated Amounts
-------- -------
which are apportioned between Buyer and Seller pursuant to Section 2(c)
------------
shall not be taken into account as prepaid expenses for purposes of this
clause(y)) minus (2) the sum of (x) accrued liabilities for refunds,
advertising, trade promotions, trade allowance programs (excluding
foodservice promotions) and
-11-
<PAGE>
consumer promotion programs (including free-standing inserts and other
forms of coupons), adjustments, exchanges and returns, plus (y) accrued
liabilities for payroll and vacation for Transferred Employees.
(iv) Buyer agrees that following the Closing it will not take any
actions with respect to Buyer's accounting books, records, policies and
procedures or the Assets that would obstruct or prevent the preparation of
the Closing Working Capital Statement as provided in this Section 2(b).
Buyer will cooperate in the preparation of the Closing Working Capital
Statement.
(c) Property Expense Apportionment. The following items (the
------------------------------
"Prorated Amounts") relating to the Owned Property and the Leased Property shall
----------------
be apportioned at the Closing in an equitable manner as of the close of business
on the day immediately preceding the Closing Date (the "Adjustment Date") so
---------------
that the income and expense items with respect to the period up to and including
the Adjustment Date shall be for Seller's account and the income and expense
items with respect to the period after the Adjustment Date shall be for Buyer's
account. The net amount so apportioned shall be paid by Buyer or Seller to the
other party on the Closing Date. For purposes of this Section, the term
"equitable manner" shall mean that Seller shall be allocated such items based on
----------------
a fraction, the numerator of which is the number of days in the applicable
taxable period ending on the Adjustment Date and the denominator of which is the
total number of days in such taxable period, and Buyer shall be allocated the
remainder.
(i) General and special real estate and other ad valorem taxes and
assessments and other state or local taxes, fees, charges and assessments
in respect of real estate on the basis of the fiscal year for which
assessed. If the Closing Date shall occur before the tax rate or
assessment is fixed for any fiscal year, the apportionment of such taxes
and payments at the Closing shall be based upon the most recently
ascertainable tax bills; provided that Buyer and Seller shall recalculate
-------- ----
and reprorate said taxes and payments and make the necessary cash
adjustments promptly upon the issuance, and on the basis, of the actual tax
bills received for any such fiscal year and the amount of any payments in
lieu of tax made with respect to any such fiscal year.
(ii) Personal property taxes, if any, on the basis of the fiscal year
for which assessed. If the Closing Date shall occur before the tax rate or
assessment is fixed for any fiscal year, the apportionment of such taxes at
the Closing shall be based upon a reasonable estimate mutually agreed upon
by Buyer and Seller; provided that Buyer and Seller shall recalculate and
-------- ----
reprorate said taxes and make the necessary cash adjustments promptly upon
the issuance, and on the basis, of the actual tax bills received for any
such fiscal year.
(iii) Utility charges and other apportionments and adjustments as are
customarily apportioned upon the transfer of property similar to the Owned
Property and the Leased Property in the county and state in which the
subject property is located.
(iv) To the extent any taxes described in subparagraph (i) or (ii)
above are adjusted as a result of any governmental Tax audit or
administrative or court proceeding initiated by a governmental entity or
agency with jurisdiction over the Properties, Buyer
-12-
<PAGE>
and Seller shall recalculate and reprorate such taxes and make the
necessary cash adjustments promptly upon the resolution of such audit or
proceeding.
3. Conditions to Closing.
---------------------
(a) Buyer's Obligation. The obligation of Buyer to purchase and pay
------------------
for the Assets and assume the Assumed Liabilities is subject to the satisfaction
as of the Closing of each of the following conditions (all or any of which may
be waived in whole or in part by Buyer in its sole discretion):
(i) The representations and warranties of Seller made in this
Agreement shall be true and correct on and as of the Closing Date, as
though made on and as of the Closing Date, except for representations and
warranties made as of a specified date or time earlier than the Closing
Date (which need only be true and correct as of such date or time), and
Seller shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by Seller by the time of the Closing, except for breaches of
such representations and warranties (determined, for the purpose of this
exception, as if the terms "material", "materially" or "Material Adverse
Effect" were not included therein) that, in the aggregate, would not have a
material adverse effect on the financial condition, Assets, Assumed
Liabilities, business or annual results of operations of the Business taken
as a whole (a "Material Adverse Effect"); and Seller shall have delivered
-----------------------
to Buyer a certificate dated the Closing Date and signed by the President
or a Vice President of Seller confirming the foregoing.
(ii) No Law or Order shall be in effect as of the Closing which
restrains, prohibits or otherwise makes illegal the purchase and sale of
the Assets or which could reasonably be expected to have a Material Adverse
Effect on Buyer's use or ownership of the Assets or conduct of the Business
following the Closing.
(iii) The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have expired or
-------
been terminated.
(iv) Seller shall have executed and delivered the Transition
Services Agreement.
(v) Chicago Title Insurance Company (the "Title Company") shall be
-------------
willing and able to issue Buyer, at Buyer's expense, an ALTA form of
Owner's Title Insurance Policy (each a "Policy" and, collectively, the
------
"Policies") with respect to each parcel of Owned Property, which Policies
---------
shall insure Buyer's ownership with respect to each parcel of Owned
Property of fee title subject only to (i) imperfections of title,
restrictions, encumbrances, easements, covenants, rights-of-way and other
similar restrictions of record (none of which, individually or in the
aggregate, materially impair the continued use and operation of the
Business as currently conducted on the Property to which they relate), (ii)
any conditions shown by the surveys prepared by Webster & Associates Land
Surveys & Engineers P.C. dated December 13, 1996 and E&M Engineers &
Surveyors, P.C. dated November 25, 1996 and last revised on December 13,
1996 each of which was
-13-
<PAGE>
provided to Buyer on or before the date hereof, (iii) any conditions shown
by the Surveys (none of which, individually or in the aggregate, materially
impair the continued use and operation of the Business as currently
conducted on the Property to which they relate), (iv) current general real
estate taxes and installments for special assessments which are not yet due
and payable, (v) (A) zoning, building, fire, health, environmental and
pollution control laws, ordinances, rules and safety regulations and other
similar restrictions, and (B) Liens, that have been placed by any
developer, landlord or other third party on property over which Seller has
easement rights or on any Leased Property and subordination or similar
agreements relating thereto, (vi) acts done or suffered to be done by, and
judgments against, Buyer and those claiming by, through or under Buyer
(collectively, the "Title Exceptions"). Seller shall fully cooperate with
----------------
Buyer to the extent Buyer seeks to obtain with respect to any Policy (A) an
"extended coverage endorsement" insuring over the general exceptions
contained customarily in such Policy, (B) an ALTA Zoning Endorsement 3.1
(or equivalent), to the extent available from the Title Company, based on a
review of the physical nature of the Owned Property limited to the surveys
to the extent Buyer had provided the Title Company with such Surveys
pursuant to Section 5 hereof, (C) an endorsement insuring that the real
---------
property described in the title insurance policy is the same real estate as
shown on the survey delivered with respect to such property, (D) an
endorsement or coverage insuring that each building structure or other
improvement has direct access to a public street adjoining the real
property on which such improvement is situated over the driveways and
accessways currently being used in connection with the use and operation of
such improvement, and no such existing driveway or accessway crosses or
encroaches upon any property or property interest not owned by Seller, and
(E) an endorsement or language stating all buildings, structures, fixtures
and other improvements erected on the Owned Property conform in all
material respects with all applicable deed restrictions, and do not
encroach on property of others. Notwithstanding the foregoing, Seller shall
not be required to expend any money, other than in de minimus amounts, post
any bonds or act as a surety to, for, or on behalf of the Title Company or
any third-party or otherwise incur any other liability to, for, or on
behalf of the Title Company or any third-party with respect to any of the
foregoing.
(vi) Seller shall have tendered delivery to Buyer of all deliveries
to be made to it pursuant to Section 2(a)(ii).
----------------
(vii) Buyer shall have received the proceeds of the debt facilities
pursuant to its Commitment Letter from Chase Manhattan Bank previously
delivered to Seller.
(b) Seller's Obligation. The obligation of Seller to sell and
-------------------
deliver the Assets to Buyer is subject to the satisfaction as of the Closing of
each of the following conditions (all or any of which may be waived in whole or
in part by Seller in its sole discretion):
(i) The representations and warranties of Buyer made in this
Agreement shall be true and correct in all material respects as of the
Closing Date, as though made on and as of the Closing Date, except for
representations and warranties that speak as of a specific date or time
(which need only be true and correct as of such date or time), and
-14-
<PAGE>
Buyer shall have performed or complied in all material respects with the
obligations and covenants required by this Agreement to be performed or
complied with by Buyer by the time of the Closing; and Buyer shall have
delivered to Seller a certificate dated the Closing Date and signed by the
President or a Vice President of Buyer confirming the foregoing.
(ii) No Law or Order shall be in effect as of the Closing which
restrains, prohibits or otherwise makes illegal the purchase and sale of
the Assets.
(iii) The waiting period under the HSR Act shall have expired or
been terminated.
(iv) Buyer shall have tendered delivery to Seller of all deliveries
due to it pursuant to Section 2(a)(i) hereof.
---------------
4. Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Buyer as follows:
(a) Authority; Binding Effect; No Conflicts.
---------------------------------------
(i) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller is not a
"foreign person" within the meaning of Section 1445 of the Code and the
Treasury Regulations promulgated thereunder. Seller has all requisite
corporate power and authority to own, operate and lease its properties and
assets relating to the Business and to conduct the Business as they are now
being owned, operated, leased and conducted and to enter into this
Agreement and the Transition Services Agreement and to consummate the
transactions contemplated hereby and thereby. All corporate acts and other
proceedings required to be taken by Seller to authorize the execution,
delivery and performance of this Agreement and the Transition Services
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly and properly taken. Seller is duly qualified to do
business and is in good standing in those jurisdictions in which the
conduct of the Business or the ownership or operation of the Assets, as
applicable to it, requires such qualification, except where the failure to
be so qualified or in good standing would not or could not reasonably be
expected to have a Material Adverse Effect on the Business or the Assets,
each taken as a whole, or the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Seller and
constitutes, and upon the execution and delivery by Seller of the
Transition Services Agreement, the Transition Services Agreement will
constitute, legal, valid and binding obligations of Seller enforceable
against Seller in accordance with their terms.
(ii) The execution and delivery by Seller of this Agreement, and the
Transition Services Agreement, the performance by Seller of its obligations
under this Agreement and the Transition Services Agreement and the
consummation of the transactions contemplated hereby and thereby do not and
will not:
-15-
<PAGE>
(A) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate or
incorporation or by-laws of Seller;
(B) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Schedule 4(a)
-------------
attached hereto, conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to the Business
or the Assets (other than (i) such conflicts, violations or breaches
which could not in the aggregate reasonably be expected to adversely
affect the validity or enforceability of this Agreement or the
Transition Services Agreement or to have a Material Adverse Effect; or
(ii) as would occur solely as a result of the legal or regulatory
status of Buyer or any of its affiliates); or
(C) except as disclosed in Schedule 4(a) attached hereto or as
-------------
could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or to have a material adverse affect on
the ability of Seller to consummate the transactions contemplated
hereby or by the Transition Services Agreement or to perform its
obligations hereunder or thereunder, (i) conflict with or result in a
violation or breach of, constitute a default under, permit the
termination of, or cause the acceleration of any debt or obligation
under any Contract to which Seller or the Assets are bound, (ii)
constitute (with or without notice or lapse of time or both) a default
under any Business Contract, (iii) require Seller to obtain any
consent, approval or action of, make any filing with or give any
notice to any Person or Governmental or Regulatory Authority
(including, without limitation, any Canadian authority with respect to
anti-trust matters), or (iv) result in the creation or imposition of
any Lien upon any of the Assets.
(b) Financial Schedules. Schedule 4(b)(1) attached hereto sets forth
------------------- ----------------
a Statement of Transferred Assets and Liabilities as of April 30, 1999 (the
"Initial Net Assets Statement") setting forth the Net Assets to be Transferred
----------------------------
as of such date, pro forma summary financial information setting forth the
earnings of the Business before interest, income taxes, depreciation and
amortization ("EBITDA") and corporate overhead for the seven-month period ended
------
July 31, 1999 and for each of the fiscal years ended December 31, 1998 and 1997
and the line items "Net Sales" and "Advertising, Trade and Promotion" as set
forth in such pro forma summary information for the eight-month period ended
August 31, 1999 (the Initial Net Assets Statement, together with all such pro
forma summary financial information, being referred to herein as the "Financial
---------
Schedules"). The Financial Schedules were prepared by Seller in all material
- ---------
respects in accordance with GAAP consistently applied, except as set forth on
Schedule 4(b)(2), have been derived from the accounting books and records of
- ----------------
Seller and its affiliates regularly maintained by Seller in the ordinary course
of business and used in connection with the preparation of the public securities
filings of Seller's parent, and, together with Schedule 4(b)(2), present fairly
----------------
in all material respects the EBITDA of the Business before corporate overhead as
of the respective dates and for the respective periods covered thereby.
(c) Title to Tangible Assets Other than Real Property Interests.
-----------------------------------------------------------
Seller has good title to, or has valid leasehold interests in or valid rights
under contract to use, all the
-16-
<PAGE>
material tangible assets included in the Assets, except those sold or otherwise
disposed of in the ordinary course of business in accordance with this Agreement
free and clear of all Liens, except (i) such as are disclosed on Schedule 4(c)
-------------
attached hereto, (ii) mechanics', carriers', workmen's, repairmen's or other
like liens arising or incurred in the ordinary course of business, liens arising
under original purchase price conditional sales contracts and equipment leases
with third parties entered into in the ordinary course of business, liens for
taxes and other governmental charges which are not due and payable or which may
thereafter be paid without penalty, and (iii) other imperfections of title,
restrictions or encumbrances, if any, which imperfections of title, restrictions
or encumbrances do not, individually or in the aggregate, impair the continued
use and operation of the Assets to which they relate in the operation of the
Business as currently conducted (collectively, the "Permitted Liens"). The
---------------
material equipment and machinery included in the Assets are in good working
order in all material respects, ordinary wear and tear excepted. This Section
-------
4(c) does not relate to real property or interests in real property, such items
- ----
being the subject of Section 4(d).
------------
(d) Title to Real Property. All real property and interests in real
----------------------
property that are leased by Seller as of the date hereof and included in the
Assets are described on Schedule 4(d) attached hereto and referred to herein as
-------------
"Leased Property." Seller holds, as a tenant, and is in peaceful, undisturbed
---------------
possession of, the leasehold estates in all Leased Property. Seller owns fee
simple title to all Owned Property subject only to, to Seller's knowledge, the
Title Exceptions (each Owned Property or Leased Property being sometimes
referred to herein individually as a "Property" and collectively as the
--------
"Properties"). To Seller's knowledge, the use of the Property and the structures
----------
thereon are in material compliance with applicable zoning laws, except where the
failure to be in compliance with such zoning laws would not materially impair
the continued use and operation of the Business as currently conducted on the
Property to which they relate.
(e) Condition of Assets.
-------------------
(i) All material buildings, structures, fixtures, systems and other
improvements on the Owned Property used in the Business as of the Closing
Date are in good condition and adequate to conduct the Business on the
Owned Property in substantially the same manner as currently conducted;
(ii) To the knowledge of Seller, there is no pending (x) changes of
zoning, building or other similar laws, ordinances or regulations adversely
affecting the Owned Property which would cause Buyer to be unable to
conduct the Business on the Owned Property in substantially the same manner
as currently conducted or (y) condemnation of the Owned Property.
(iii) Except as set forth in Schedule 4(e), the software and
-------------
hardware owned by Seller and set forth on Schedule 1(b)(v) is Year 2000
----------------
Compliant, except for software and hardware the failure of which to be Year
2000 Compliant would not individually or in the aggregate, have a Material
Adverse Effect. As used herein, "Year 2000 Compliant" or "Year 2000
Compliance" means that the software and hardware, when used in accordance
with associated documentation, is capable of correctly transmitting,
processing, providing and/or receiving date data within and between the
twentieth and twenty-first centuries, provided that all products (for
example, hardware, programs and firmware), services and
-17-
<PAGE>
applications used with or using the software and hardware properly exchange
date data with it. Seller is not responsible and makes no representations
or warranties with respect to Year 2000 Compliance of software and hardware
owned by third parties, even where the third party has represented to
Seller that such software and hardware is Year 2000 Compliant.
(f) Intellectual Property. (i) Schedule 1(b)(iv) sets forth a
--------------------- -----------------
complete and accurate list of:
(A) all (1) registered trademarks and trade names owned by Seller
in the United States and Canada and (2) pending applications for
registration of trademarks and trade names filed in the United States
or Canada on behalf of Seller or its affiliates in each case that (i)
contain the "Lender's" name or (ii) relate exclusively to the
Business; and
(B) all patents issued in the United States to Seller and its
affiliates that are used exclusively in connection with the Business
and all pending patent applications filed in the United States by or
on behalf of Seller or its affiliates that relate exclusively to the
Business.
(ii) Except as disclosed on Schedule 4(f) attached hereto, Seller
-------------
owns or has the right to use without payment to any other party, the
Intellectual Property, other than the Intellectual Property listed on
Schedule 4(f) attached hereto (the "Other Intellectual Property"). Except
------------- ---------------------------
as set forth on Schedule 4(f), the Intellectual Property is free and clear
-------------
of any Liens. Except as set forth on Schedule 4(f) attached hereto, to
-------------
Seller's knowledge, no material claims are pending in writing or threatened
in writing against Seller by any Person with respect to the ownership or
use or any of the Intellectual Property. Except as set forth on Schedule
--------
4(f) attached hereto, no licenses, sublicenses or agreements pertaining to
----
any of the Intellectual Property (other than the Other Intellectual
Property) have been granted or entered into by Seller nor is Seller
obligated to grant any licenses, sublicense or agreements, other than any
intercompany licenses which shall be terminated as of the Closing Date.
Each of the trademarks set forth on Schedule 1(b)(iv) List A and included
------------------------
in the Intellectual Property (other than the Other Intellectual Property)
is valid, subsisting and enforceable. Except as set forth on Schedule
--------
4(f), Seller has not received any notices of any infringement by any third
----
party with respect to the trademarks included in the Intellectual Property.
For purposes of clarity, with respect to the trademarks set forth on
Schedule 1(b)(iv) List A and included in the Intellectual Property: (w)
------------------------
Kellogg Company owns all right, title and interest to such trademarks, free
and clear of any Liens, (x) such trademarks are validly registered (and
Seller has filed Section 8 and Section 15 affidavits with the United States
Trademark Office to the extent such affidavits are required to have been
filed) and do not infringe the rights of any third party, (y) no claims are
pending or to the knowledge of Seller threatened against Seller or its
affiliates regarding the use of such trademarks, and (z) no action is
currently being asserted against a third party regarding infringement of
Seller's rights in and to such trademarks.
-18-
<PAGE>
(iii) Except for the Other Intellectual Property or as set forth in
Schedule 4(f) or Schedule 1(b)(iv), each other item of Intellectual
------------- -----------------
Property, including without limitation all trade secrets and know-how, are
owned by Seller or its affiliates, as applicable and, to Seller's
knowledge, such other items of Intellectual Property do not conflict with
or infringe on the rights others. Except as set forth in Schedule 4(f) or
-------------
Schedule 1(b)(iv), Seller has not made any claim of any material violation
-----------------
or material infringement by others of its rights to the Intellectual
Property including, without limitation, the trade secrets and, to Seller's
knowledge, neither Seller nor its Affiliates is aware of any basis for the
making of such claim. Seller has a right or valid license to use any
Intellectual Property that is not owned by Seller, is not in default (and
has not received a notice of default) with respect to any of its licenses
which default would have a material effect on the operation of the
Business, and has the right to sublicense Buyer to use all licensed
Intellectual Property to the extent such sublicense are permitted by law.
No third party will have a right to license or acquire, and no consent of
any third party will be required, to use any of the trademarks set forth on
Schedule 1(b)(iv) List A as a consequence of the consummation of the
-------------------------
transaction contemplated by this Agreement. Although pursuant to this
Agreement Seller is conveying, transferring and assigning to Buyer all of
its right, title and interest in the Other Intellectual Property, Buyer
acknowledges and agrees that, except as specifically set forth herein,
Seller has not made and is not making any representation or warranty,
express or implied, including any implied warranties of noninfringement and
title, as to such Other Intellectual Property. Seller does not own any
copyright or domain name registrations (and had not filed any applications
to register any copyrights or domain names) which are material to the
operation of the Business or which contain the Lender's name.
(g) Contracts. Schedule 1(b)(iii) attached hereto includes a list
--------- ------------------
of the following types of written Business Contracts as of the date hereof:
(i) the CBA;
(ii) all covenants not to compete by Seller or its subsidiaries in
any line of business relating to the Business;
(iii) all leases under which Seller is a lessor or sublessor of, or
makes available for use by any third party, any real property owned or
leased by Seller or any portion of premises otherwise occupied by Seller,
in each case which has future liability in excess of $250,000 per annum and
is not terminable by notice of not more than 60 calendar days for a cost of
less than $250,000;
(iv) all leases under which (A) Seller is lessee of, or holds or
uses, any machinery, equipment, vehicles or other tangible personal
property owned by a third party or (B) Seller is a lessor or sublessor of,
or makes available for use by any third party, any tangible personal
property owned or leased by Seller, in each case which has future liability
in excess of $250,000 per annum and is not terminable by notice of not more
than 60 calendar days for a cost of less than $250,000;
(v) consent decrees;
-19-
<PAGE>
(vi) all agreements for the sale or purchase of any material assets
of or for the Business other than in the ordinary course of business;
(vii) all indentures, mortgages, industrial revenue bond agreements,
notes, loan or credit agreements or other material agreements or
obligations relating to the borrowing of money or to a guaranty or
assumption, directly or indirectly, of obligations of others;
(viii) all material security agreements, pledges, conditional sale
agreements or title retention agreements;
(ix) Contracts with any current or former officer, director,
employee or shareholder or any member of their family or their affiliates;
in each case solely to the extent such Contracts involve payments or have a
value of more than $50,000;
(x) all written employment agreements and severance agreements;
(xi) all agreements with Seller or any of its affiliates related to
the Business that will survive the Closing;
(xii) all other agreements, contracts and leases, in each case not
included in clauses (i) through (xii) above, to which Seller is a party or
by or to which any of its assets is bound or subject, which has future
liability in excess of $250,000 per annum or $1,000,000 in the aggregate
and is not terminable by notice of not more than 60 calendar days for a
cost of less than $250,000 (other than purchase contracts and orders for
inventory in the ordinary course of business); and
(xiii) all agreements for payments based on a percentage of sales or
profits.
Except as disclosed on Schedule 1(b)(iii) attached hereto, each
------------------
material Business Contract is in full force and effect and, to the knowledge of
Seller, is enforceable by Seller in accordance with its terms. To the knowledge
of Seller, Seller has not received any written notice of a breach or material
default under any material Business Contract. The Business Contracts not
specifically set forth on Schedule 1(b)(iii) do not, in the aggregate, have a
Material Adverse Effect on the Business.
(h) Litigation; Decrees. Schedule 4(h) attached hereto sets forth
------------------- -------------
a list, as of the date of this Agreement, of all pending actions, suits or
proceedings relating exclusively to the Business that individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect. To the
knowledge of Seller, Seller is not in default under any material Order
outstanding against the Business or the Assets.
(i) Absence of Changes or Events. Except as set forth on Schedule
---------------------------- --------
4(i) attached hereto or the other Schedules hereto, since April 30, 1999, there
- ----
has been no material adverse change in the financial condition, Assets, Assumed
Liabilities (contingent or otherwise), business or annual results of operations
of the Business taken as a whole, other than changes relating to United States
or foreign economies in general or the Business's industry in general and not
specifically relating to the Business, and other than changes that are the
result of actions
-20-
<PAGE>
taken by Buyer prior to the Closing Date that have an effect on the Business.
Buyer acknowledges that there may be a disruption to the Business as a result of
the announcement by Buyer of its intention to purchase the Business or the
announcement by Seller of its intention to sell the Business to Buyer, and the
consummation of the transactions contemplated hereby, and Buyer agrees that such
disruptions do not and shall not constitute a breach of this Section 4(i).
------------
Except as disclosed in Schedule 4(i) attached hereto or the other Schedules
-------------
attached hereto, since April 30, 1999, Seller has conducted the Business only in
the ordinary course in a manner consistent with past practice and has not with
respect to the Business:
(i) suffered any damage, destruction or loss (whether or not
covered by insurance) which has had a Material Adverse Effect;
(ii) committed to make any capital expenditures or capital additions
or betterments with respects to the Owned Property or the Assets which will
not be paid prior to the Closing Date in excess of $250,000 individually or
$1,000,000 in the aggregate;
(iii) encountered any labor union organizing activity or had any
actual or threatened employee strikes, work stoppages, slow-downs or lock-
outs, or entered into any new collective bargaining agreements;
(iv) instituted any material litigation, action or proceeding before
any Governmental or Regulatory Authority relating to it or its property,
except for litigation, actions or proceedings instituted in the ordinary
course of business and consistent with prior practice;
(v) changed any method of accounting for the Assets or the
Business;
(vi) sold, transferred, assigned or licensed any rights to the use
of any of the registered trademarks listed in Schedule 1(b)(iv);
-----------------
(vi) incurred any liabilities which in the aggregate are material to
the condition of the Business, other than liabilities incurred in the
ordinary course of business; or
(viii) agreed, whether in writing or otherwise, to take any of the
actions set forth in this Section 4(i).
------------
(j) Compliance with Applicable Laws. Except as set forth on Schedule
------------------------------- --------
4(j) attached hereto, the Business is not being conducted in violation of or in
- ----
default under any Law or Order applicable to it (including Environmental Laws)
which, individually or in the aggregate with other such violations and defaults,
could reasonably be expected to have a Material Adverse Effect.
(k) Environmental Laws. Seller has provided Buyer with copies of all
------------------
material environmental reports relating to the Owned Property or Leased
Property, copies of which are attached to or identified on Schedule 4(k)
-------------
attached hereto (the "Environmental Reports"). To the knowledge of Seller, there
---------------------
are no material Environmental Liabilities that have
-21-
<PAGE>
not been disclosed in the Environmental Reports. As used in this Agreement, the
term "Environmental Laws" means any material federal or state statute, law,
------------------
regulation, ordinance, rule, regulation or court order to which the Business is
subject relating to pollution or protection of the environment, including the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), the Resource Conservation and Recovery Act, as amended ("RCRA"), the
------ ----
Clean Water Act, as amended, the Clean Air Act, as amended, and the Toxic
Substances Control Act, as amended. Seller is not party to any remedial action
or proceeding with respect to the Business under CERCLA, RCRA or any similar
state statute.
(l) Permits. Schedule 4(l) attached hereto sets forth all material
------- -------------
federal, state, local and foreign governmental permits, licenses and other
authorizations ("Permits") held by Seller in connection with the Business (the
-------
"Existing Permits"). To the knowledge of Seller, the Existing Permits constitute
----------------
all material Permits that are required under any federal, state, local and
foreign laws, (including Permits required under Environmental Laws) to own, use
and operate the Assets located at the Properties in connection with the
Business. Except as set forth on Schedule 4(l), to the knowledge of Seller, all
-------------
such Permits are in effect, no appeal or other action is pending to revoke any
such Permit, Seller is in compliance in all material respects with all terms and
conditions of all such Permits and all of such Permits are transferable to Buyer
or reissuable to Buyer subject in each case to appropriate governmental consents
or approvals.
(m) Asset Sufficiency. Except for the Excluded Assets, the Assets
-----------------
include all of the material tangible assets and all of the material intangible
assets, including trade secrets, know-how, patents, trademarks, recipes, product
formulations and finished product specifications currently owned and used by
Seller that, together with Buyer's rights under Section 8(b) and under the
------------
Transition Services Agreement, are necessary for the conduct of the Business in
substantially the same manner as the Business was conducted by Seller
immediately prior to the date hereof.
(n) Inventory. Except as set forth in Schedule 4(n), and except as
--------- -------------
could not reasonably be expected to result in a material loss to the Business,
the Inventory shall, on the Closing Date, consist of items that will not be
adulterated, misbranded, mispackaged or mislabeled within the meaning of, or in
violation of, any applicable local, state or federal food and drug laws or
regulations. Except as set forth in Schedule 4(n), and except as could not
-------------
reasonably be expected to result in a material loss to the Business, the
products sold or delivered by the Business prior to the date hereof and the
products to be sold between the date hereof and the Closing were, or will be,
usable or saleable in the normal and ordinary course of the Business and were
not and will not be, as the case may be, adulterated, misbranded, mispackaged,
or mislabeled within the meaning of, or in violation of, any applicable local,
state or federal food and drug laws or regulations.
(o) Insurance. Seller has provided Buyer with a list of all property
---------
damage and personal injury claims against it with respect to the Business and
the Assets in the last two years involving any claim in excess of $1,000,000.
Between the date of this Agreement and the Closing Date, Seller shall provide or
make available to Buyer all information pertaining to the Assets and the
Business as reasonably requested by Buyer or Buyer's brokers or insurers to
obtain insurance on the Assets and the Business at the Closing Date.
-22-
<PAGE>
(p) Labor Matters. With respect to the Business, except as disclosed
-------------
in Schedule 4(p), Seller has not, in the two-year period next preceding the date
-------------
of this Agreement, experienced a labor strike.
(q) ERISA. (i) Schedule 4(q) contains statements, which to Seller's
-----
knowledge on the date hereof, are materially correct of, (1) any and all post-
retirement medial liabilities in accordance with FAS 106 with respect to the
Offered Collectively Bargained Employees (as defined in Section 8(j)), and (2)
any and all severance liabilities in accordance with FAS 112 with respect to the
Offered Non-Collectively Bargained Employees.
(r) Recipes; Ingredients. The recipes included in the Assets are all
--------------------
the recipes necessary to conduct the Business substantially in the manner
currently conducted. After the Closing Date, no ingredient (including without
limitation any flavor) used in the recipes of the Business will need to be
procured exclusively from or through Seller or Seller's affiliates.
(s) Brokers. Except for Goldman, Sachs & Co., whose fees,
-------
commissions and expenses are the sole responsibility of Seller, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried out by Seller directly with Buyer without the intervention of any Person
on behalf of Seller in such manner as to give rise to any valid claim by any
Person against Buyer for a finder's fee, brokerage commission or similar
payment.
5. Covenants of Seller. Seller covenants and agrees as follows:
-------------------
(a) Access. For the period from the date hereof through the Closing,
------
Seller shall grant to Buyer or cause to be granted to Buyer and its
representatives, employees, counsel, financial advisors and accountants
reasonable access, during normal business hours and upon reasonable notice, to
the personnel, Properties, books and records of Seller relating to the
transition of the Business to Buyer; provided, however, that such access does
-------- -------
not unreasonably interfere with the normal operations of Seller or the Business;
and provided further, that all requests for access shall be directed to Mr.
-------- -------
Michael J. Libbing, or such other person as Seller may designate from time to
time. Until the Closing Date, Buyer shall not contact or communicate about the
Business with any customers, suppliers or distributors of the Business without
the prior written consent of Seller, not to be unreasonably withheld.
(b) Ordinary Conduct. Except as permitted by the terms of this
----------------
Agreement or as set forth on Schedule 5(b) attached hereto, from the date
-------------
hereof until the Closing Date, Seller shall cause the Business to be conducted
in the ordinary course and shall use commercially reasonable efforts consistent
with past practices to preserve its relationships with customers and suppliers
with whom Seller deals in connection with the Business. Except as provided in
this Agreement or Schedule 5(b), from the date hereof until the Closing Date,
-------------
Seller shall not do any of the following without the prior written consent of
Buyer:
(i) make any material change in the conduct of the Business, other
than a sale of Excluded Assets that does not adversely affect the Business
in a material manner or materially impair Seller's obligations under the
Transition Services Agreement;
-23-
<PAGE>
(ii) sell, lease, license or otherwise dispose of, or agree to sell,
lease, license or otherwise dispose of, any interest in (A) any of the
Assets that have a book value in excess of $500,000 on an individual basis
or $2,000,000 on an aggregate basis, except for sales of inventory in the
ordinary course of business or (B) any registered trademarks listed in
Schedule 1(b)(iv); or
-----------------
(iii) subject any of the Assets or any part thereof to any Lien or
suffer such to be imposed, except for Permitted Liens.
(c) Confidentiality. Seller agrees to use all reasonable efforts
---------------
after the Closing Date to cause its directors, officers, employees, advisors and
affiliates to keep the Information confidential following the Closing Date,
except that any Information required by law or legal or administrative process
to be disclosed may be disclosed without violating the provisions of this
Section 5(c), and except that any Information may be used and disclosed (i) in
- ------------
connection with the performance by Seller of its obligations under the
Transition Services Agreement and (ii) in connection with the Excluded Assets.
For purposes hereof, the term "Information" means all information exclusively
-----------
concerning the Business, the Assets and the Assumed Liabilities, other than any
such information that is available to the public on the Closing Date, or
thereafter becomes available to the public other than as a result of a breach of
this Section 5(c) or is developed independently by Seller or its affiliates or
------------
is obtained from third parties.
(d) Covenant Not To Compete. Seller agrees that for a period of 3
-----------------------
years following the Closing Date, Seller shall not, either for itself or for any
other Person controlled by it, without the prior written consent of Buyer,
engage in the Business anywhere in the United States and Canada (the "Restricted
----------
Business"); provided that, notwithstanding the foregoing, Seller may (i)
- -------- -------- ----
hereafter purchase, or otherwise become affiliated with or participate in, any
enterprise engaged in the Restricted Business if less than 20% of the aggregate
gross revenues of such enterprise for its most recently completed fiscal year
were derived from the Restricted Business (and Seller may hereafter acquire a
controlling interest in any enterprise that is engaged in the Restricted
Business, even if more than 20% of the aggregate gross revenues of such
enterprise for its most recently completed fiscal year were derived from the
Restricted Business, so long as Seller shall use reasonable efforts to divest,
as soon as reasonably practicable, a portion of its interest in such enterprise
relating to the Restricted Business such that the 20% gross revenues test set
forth above would not be exceeded after giving effect to such divestiture), (ii)
hereafter own, operate, acquire or otherwise become affiliated with or
participate in any wholesale or retail grocery business, any grocery
distribution business or any foodservice distribution business which is not
engaged in the manufacture of bagels, (iii) engage in any joint marketing,
promotion or in-store merchandizing program for any of Seller's products or any
products produced by or for any Person, and (iv) perform its obligations under
the Transition Services Agreement. Notwithstanding the foregoing, nothing in
this Section 5(d) shall be deemed to prohibit Seller from leasing, renting,
------------
selling or otherwise disposing of any Excluded Assets.
(e) Nonsolicitation. Seller agrees that for a period of twelve (12)
---------------
months following the Closing Date, Seller shall not, without Buyer's written
consent, directly solicit for
-24-
<PAGE>
employment any of the Transferred Employees. Notwithstanding the foregoing,
nothing in this Section 5(e) shall prohibit Seller from contacting or
------------
communicating with or hiring any Transferred Employee who voluntarily resigns
his or her employment with Buyer or is terminated by Buyer.
(f) No Shop. From the date hereof until the earlier of (i) the
-------
termination of this Agreement and (ii) the Closing Date, Seller shall not, and
shall cause its subsidiaries, affiliates, agents, representatives, and any other
Person acting on its behalf not to, directly or indirectly solicit, negotiate
with respect to, actively facilitate or accept any offers for the purchase or
sale of or otherwise transfer the Business, or otherwise effect any transaction
inconsistent with the transactions contemplated herein or agree to do any of the
foregoing, and Seller shall terminate any existing activities or discussions
with any party other than Buyer and its representatives. Notwithstanding the
foregoing, nothing in this Section 5(f) shall be deemed to prohibit Seller from
------------
leasing, renting, selling or otherwise disposing of any Excluded Asset.
(g) Delivery of Financial Information. (i) Seller shall use its best
---------------------------------
efforts to cause PriceWaterhouseCoopers to prepare and deliver to Buyer as
promptly as practicable, at Buyer's expense, the SEC Financial Information. In
no event shall the SEC Financial Information be delivered later than the 45th
day following the Closing Date. "SEC Financial Information" means:
-------------------------
(A) an Audited Statement of Operations for the year ended
December 31, 1998 and an unaudited statement of operations for the
nine months ended September 30, 1999 (including net sales, cost of
sales including depreciation, gross profit, marketing, promotional,
selling, administrative, corporate allocation and other expenses); and
(B) an Audited Statement of Transferred Assets and Liabilities as of
December 31, 1998 in accordance with the Agreement and an unaudited
Statement of Transferred Assets and Liabilities in accordance with the
Agreement as of September 30, 1999; in each case sufficient to meet
SEC filing requirements.
(ii) Seller shall provide and shall cause its accountants to provide
to Buyer and its accountants reasonable access to such information, data
and books and records of Seller as Buyer may reasonably request in order
for Buyer to be able to timely file such audited and unaudited financial
information relating to the Business as Buyer is required to file under the
federal securities laws. In addition, Seller will, upon reasonable request
and reasonable notice, use its commercially reasonable efforts to (A) cause
Seller's accountants to cooperate with Buyer in providing appropriate
consents and comfort letters with respect to such required financial
information; and (B) for a reasonable period after the Closing Date,
provide Seller's accountants with Seller's customary management
representation letters and other information to induce Seller's accountants
to provide such required financial information.
(h) Use of Technology. To the extent that Buyer is operating the
-----------------
Business subsequent to the Closing Date using the same know-how, patented and
unpatented formulas (including without limitation current and discontinued
flavors and products, recipes and mixing instructions), improvements, trade
secrets, research and results thereof, inventions, data,
-25-
<PAGE>
methods, processes, instructions, drawings, and specifications
that Seller used in operating the Business prior to the Closing Date, Seller
hereby waives any right, remedy or cause of action it might have against Buyer
arising out of or related to such use (other than rights, remedies or causes of
action that arise prior to the Closing Date), regardless of whether such know-
how, patented and unpatented formulas (including without limitation current and
discontinued flavors and products, recipes and mixing instructions),
improvements, trade secrets, research and results thereof, inventions, data,
methods, processes, instructions, drawings, and specifications constitute
Intellectual Property transferred to Buyer under this Agreement.
(i) Surveys. Seller shall cooperate with Buyer in permitting Buyer
-------
to obtain a current survey of each parcel of Owned Property (each a "Survey"
------
and, collectively, the "Surveys") at Buyer's expense, in each case prepared in
-------
insurable form in accordance with standards applicable to registered and
licensed land surveyors making surveys in the localities in which such parcels
are located.
(j) West Haven Equipment. Within 60 days following completion of the
--------------------
services required to be performed by Seller in the West Haven, Connecticut
facility under the Transition Services Agreement, Buyer shall remove, prepare
for shipment and ship, at its expense, the bagellette line located at such
facility used in the production of bagellettes and Seller shall cooperate with
Buyer with respect thereto.
(k) Customer Deductions. (i) Following the Closing, Seller shall
-------------------
reimburse Buyer for all deductions taken to the extent relating to the
businesses of Seller other than the Business, or made by customers or other
third parties against any accounts receivable or invoices of Buyer and its
affiliates or otherwise charged to the account of Buyer or its affiliates;
including any of the foregoing which arise out of any trade promotion or trade
allowance programs or consumer promotion programs (including free-standing
inserts) relating to such other businesses.
(ii) Each party shall comply with the following procedures in dealing
with such deductions and other charges to the account of Buyer or its
affiliates for which Buyer seeks reimbursement from Seller:
(A) Buyer shall give written notice (the "Deduction Notice") to
----------------
Seller of any such deductions and other charges to the account of
Buyer or its affiliates within 180 days of receipt of the customer
deduction together with reasonable supporting documentation in
connection therewith; and
(B) Within 45 business days following delivery of a Deduction
Notice, Seller shall tender to Buyer a check or wire transfer in the
aggregate amount of such deductions or other charges to the account of
Buyer or its affiliates that are set forth therein. Late payments of
any such amounts shall bear interest at the Applicable Rate.
(iii) Nothing in this Section 5(k) shall restrict Seller from
------------
contesting any deductions or charges that a customer or third party has
taken or made; provided that Seller reimburses Buyer for the deductions or
--------
charges so made or taken and seeks to
-26-
<PAGE>
recover the alleged wrongful deductions or charges directly from the
customer or third party.
(iv) Buyer's rights under this Section 5(k) shall terminate with
------------
respect to any claim for reimbursement not evidenced by a Deduction Notice
on or prior to the first anniversary of the Closing Date.
6. Representations and Warranties of Buyer. Buyer hereby represents
---------------------------------------
and warrants to Seller as follows:
(a) Authority; No Conflicts. (i) Buyer is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite corporate power and authority to enter into
this Agreement and the Transition Services Agreement and to consummate the
transactions contemplated hereby and thereby. All corporate acts and other
proceedings required to be taken by Buyer to authorize the execution, delivery
and performance of this Agreement and the Transition Services Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
and properly taken. This Agreement has been duly and validly executed and
delivered by Buyer and constitutes, and upon the execution and delivery by Buyer
of the Transition Services Agreement, the Transition Services Agreement will
constitute, legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with their terms.
(ii) The execution and delivery by Buyer of this Agreement do not, and
the execution and delivery by Buyer of the Transition Services Agreement,
the performance by Buyer of its obligations under this Agreement and the
Transition Services Agreement and the consummation of the transactions
contemplated hereby and thereby will not:
(A) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of
incorporation or by-laws of Buyer;
(B) conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to Buyer or any of its
assets and properties (other than such conflicts, violations or
breaches which could not in the aggregate reasonably be expected to
adversely affect the validity or enforceability of this Agreement or
the Transition Services Agreement); or
(C) except as could not, individually or in the aggregate,
reasonably be expected to adversely affect the ability of Buyer to
consummate the transactions contemplated hereby or by the Transition
Services Agreement or to perform its obligations hereunder or
thereunder, (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a
default under, or (iii) except as set forth in Section 6(c) below,
------------
require Buyer to obtain any consent, approval or action of, make any
filing (other than HSR) with or give any notice to any Person as a
result or under the terms of, any contract to which Buyer is a party
or by which any of its assets and properties is bound.
-27-
<PAGE>
(b) Actions and Proceedings, etc. There are no (i) outstanding Orders
-----------------------------
of any Governmental or Regulatory Authority against Buyer which have or could
have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby or (ii) actions, suits, claims or legal,
administrative or arbitration proceedings or investigations pending or, to the
knowledge of Buyer, threatened against Buyer, which have or could have a
material adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby.
(c) Availability of Funds. Buyer has obtained a commitment letter (the
---------------------
"Commitment Letter") from financial institutions (true and correct copies of
-----------------
which have been delivered to Seller), to enable Buyer to pay the Purchase Price
and to make all other necessary payments of fees and expenses in connection with
the transactions contemplated by this Agreement and the Transition Services
Agreement. Buyer represents that (A) the consent of not more than 51% of the
lenders by class party to the Fourth Amended and Restated Agreement dated as of
March 31, 1999 with Buyer is required in order to enter into the Amendment (as
defined in the Commitment Letter) and (B) such consent is the only consent or
approval required in connection with the borrowing of funds as contemplated by
the Commitment Letter.
(d) Brokers. All negotiations relative to this Agreement and the
-------
transactions contemplated hereby have been carried out by Buyer directly with
Seller without the intervention of any Person on behalf of Buyer in such manner
as to give rise to any valid claim by any Person against Seller for a finder's
fee, brokerage commission or similar payment.
7. Covenants of Buyer. Buyer covenants as follows:
------------------
(a) Confidentiality. (i) Buyer acknowledges that all information
---------------
provided to it and any of its affiliates, agents and representatives by Seller
and its affiliates, agents and representatives is subject to the terms of a
confidentiality agreement between or on behalf of Seller and Buyer or one or
more of its affiliates or other beneficial owners (the "Confidentiality
---------------
Agreement"), the terms of which are hereby incorporated herein by reference.
- ---------
Effective upon, and only upon, the Closing, the Confidentiality Agreement shall
terminate; provided, however, that Buyer acknowledges that the Confidentiality
-------- -------
Agreement shall terminate only with respect to information provided to Buyer and
its affiliates, agents or representatives that relates exclusively to the
Business, the Assets and the Assumed Liabilities; and provided further, however,
-------- ------- -------
that Buyer acknowledges that any and all information provided or made available
to it and its affiliates, agents and representatives by or on behalf of Seller
concerning Seller or its affiliates (other than information relating exclusively
to the Business, the Assets and the Assumed Liabilities) shall remain subject to
the terms and conditions of the Confidentiality Agreement after the Closing
Date.
(ii) Buyer agrees that, after the Closing Date, Buyer shall use all
reasonable efforts to cause its directors, officers, employees, advisors
and affiliates to keep the Seller Information confidential for a period of
five years, except that any such Seller Information required by law or
legal or administrative process to be disclosed may be disclosed without
violating the provisions of this Section (7)(a)(ii). In connection with
------------------
Transferred Employees, Buyer will use reasonable efforts, at Seller's
request and at Buyer's expense, to enforce existing confidentiality
agreements and rights under state law requiring employees to keep trade
secrets confidential. For purposes of this Agreement,
-28-
<PAGE>
the term "Seller Information" shall mean all information concerning Seller,
------------------
other than information that relates primarily to the Business, the Assets
and the Assumed Liabilities and other than any such information that is
available to the public on the Closing Date, or thereafter becomes
available to the public other than as a result of a breach of this Section
-------
7(a)(ii).
--------
(b) Accounts Receivables. Following the Closing, any payments received
--------------------
by Buyer with respect to (i) accounts receivable of the Business existing prior
to the Closing Date or (ii) accounts receivable of Seller or its affiliates,
shall be remitted to Seller within five business days following Buyer's receipt
thereof.
(c) Customer Deductions. (i) Following the Closing, Buyer shall
-------------------
reimburse Seller for all deductions to the extent relating to the Business,
taken or made by customers or other third parties against any accounts
receivable or invoices of Seller and its affiliates or otherwise charged to the
account of Seller or its affiliates; including any of the foregoing which arise
out of any trade promotion or trade allowance programs or consumer promotion
programs (including free-standing inserts) relating to the Business.
(ii) Each party shall comply with the following procedures in dealing
with such deductions and other charges to the account of Seller or its
affiliates for which Seller seeks reimbursement from Buyer:
(A) Seller shall give written notice (the "Deduction Notice") to
----------------
Buyer of any such deductions and other charges to the account of Seller
or its affiliates within 180 days of receipt of the customer deduction
together with reasonable supporting documentation in connection
therewith; and
(B) Within 45 business days following delivery of a Deduction
Notice, Buyer shall tender to Seller a check or wire transfer in the
aggregate amount of such deductions or other charges to the account of
Seller or its affiliates that are set forth therein. Late payments of
any such amounts shall bear interest at the Applicable Rate.
(iii) Nothing in this Section 7(c) shall restrict Buyer from contesting
------------
any deductions or charges that a customer or third party has taken or made;
provided that Buyer reimburses Seller for the deductions or charges so
--------
made or taken and seeks to recover the alleged wrongful deductions or
charges directly from the customer or third party.
(iv) Seller's rights under this Section 7(c) shall terminate with
------------
respect to any claim for reimbursement not evidenced by a Deduction Notice
delivered on or prior to the first anniversary of the Closing Date.
(d) Customer and Supplier Notification. Promptly following the Closing,
----------------------------------
Buyer shall notify all customers and suppliers of the Business in writing of the
consummation of the transactions contemplated hereby and request that all such
customers and suppliers change
-29-
<PAGE>
their respective billing and invoicing codes as appropriate to reflect the
change in ownership of the Business.
(e) Use of Seller's Name or Reputation/Packaging Materials. Buyer will
------------------------------------------------------
not operate the Business utilizing, based on or taking advantage of the name,
reputation or corporate goodwill of Seller or Seller's affiliates. Buyer will
cease using packaging, advertising, sales and promotional materials bearing any
of Seller's or its affiliates' corporate names, product identification numbers
or consumer information telephone numbers beginning 6 months after the Closing,
or such shorter period if limited by the requirements of any law or regulation;
provided, however, that Buyer may continue to use the existing UPC codes for the
- -------- -------
Products until Buyer has been able to obtain new UPC codes for such Products, or
36 months after Closing, whichever is earlier. Buyer will maintain quality
standards for products of the Business at least equal to those maintained by
Seller or its affiliates at the time of the Closing for so long as Buyer
continues to use any packaging, advertising, sales or promotional materials
bearing the corporate names, product identification numbers or consumer
information telephone numbers of Seller or its affiliates.
8. Mutual Covenants. Seller and Buyer covenant and agree as follows:
----------------
(a) Consents. Buyer acknowledges that certain consents to the
--------
transactions contemplated by this Agreement may be required from parties to the
Business Contracts and such consents have not been obtained. Buyer agrees that
Seller and its affiliates shall not have any liability whatsoever to Buyer
arising out of or relating to the failure to obtain any such consents that may
have been or may be required in connection with the transactions contemplated by
this Agreement or because of the default, acceleration or termination of any
Business Contract as a result thereof. Buyer further agrees that no
representation, warranty or covenant of Seller contained herein shall be
breached or deemed breached and no condition of Buyer shall be deemed not to be
satisfied as a result of (A) the failure to obtain any such consent or as a
result of any such default, acceleration or termination or (B) any lawsuit,
action, claim, proceeding or investigation commenced or threatened by or on
behalf of any Person arising out of or relating to the failure to obtain any
such consent or any such default, acceleration or termination. Seller shall
cooperate with Buyer in any reasonable manner in connection with Buyer's
obtaining any such consents; provided, however, that such cooperation shall not
-------- -------
include any requirement of Seller to expend money (unless Seller is reimbursed
by Buyer for its out-of-pocket expenses), commence any litigation or offer or
grant any accommodation (financial or otherwise) to any Person.
(b) Cooperation. Buyer and Seller shall cooperate with each other and
-----------
shall cause their respective officers, employees, agents and representatives to
cooperate with each other for a period of twelve (12) months after the Closing
to provide for an orderly transition of the Assets and the Assumed Liabilities
to Buyer and to minimize the disruption to the respective businesses of the
parties hereto resulting from the transactions contemplated hereby. Each party
shall reimburse the other for reasonable out-of-pocket costs and expenses
incurred in assisting the other pursuant to this Section 8(b). No party shall be
------------
required by this Section 8(b) to take any action that would unreasonably
------------
interfere with the conduct of its business.
-30-
<PAGE>
(c) Publicity. At all times at or before the Closing, Seller and Buyer
---------
will not issue or make any reports, statements or releases to the public or
generally to the employees, customers, suppliers or other Persons to whom Seller
sells goods or provides services in connection with the Business or with whom
Seller otherwise has significant business relationships in connection with the
Business with respect to this Agreement or the transactions contemplated hereby
without the consent of the other, which consent shall not be unreasonably
withheld. If either party is unable to obtain the approval of its public report,
statement or release from the other party and such report, statement or release
is, in the opinion of legal counsel to such party, required by Law in order to
discharge such party's disclosure obligations, then such party may make or issue
the legally required report, statement or release and promptly furnish the other
party with a copy thereof. Seller and Buyer will also obtain the other party's
prior approval of any press release to be issued immediately following the
Closing announcing the consummation of the transactions contemplated by this
Agreement.
(d) Best Efforts. Subject to the terms of this Agreement, each party
------------
will use its best efforts to cause the Closing to occur and will take or cause
to be taken all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each condition to the other's
obligations contained in this Agreement and to consummate and make effective the
transactions contemplated by this Agreement, and neither Seller nor Buyer will
take or fail to take any action that could be reasonably expected to result in
(i) the nonfulfillment of any such condition or (ii) a breach of any covenant,
agreement, representation or warranty contained herein.
(e) HSR Act Compliance. Buyer and Seller shall each file or cause to be
------------------
filed with the Federal Trade Commission and the United States Department of
Justice any notifications required to be filed under the HSR Act with respect to
the transactions contemplated hereby, and Buyer and Seller shall bear the costs
and expenses of their respective filings; provided that Buyer and Seller shall
-------- ----
each pay 50% of the filing fee in connection therewith. Buyer and Seller shall
use their respective best efforts to make such filings promptly following the
date hereof (and in any event on or prior to September ___, 1999), to respond to
any requests for additional information made by either of such agencies and to
cause the waiting periods under the HSR Act to terminate or expire at the
earliest possible date and to resist in good faith, at each of their respective
cost and expense (including compliance with a Second Request, but not including
the institution or defense of legal proceedings or disposition of assets), any
assertion that the transactions contemplated hereby constitute a violation of
the antitrust laws, all to the end of expediting consummation of the
transactions contemplated hereby.
(f) Sales and Transfer Taxes. Buyer and Seller shall each be liable and
------------------------
responsible for 50% of all sales, use, excise, value-added, goods and services,
transfer, stamp, recording, documentary, registration, conveyancing or similar
Taxes, duties or expenses that may be imposed as a result of the sale and
transfer of Assets (including any taxes, filing fees or expenses payable in
connection with the sale and transfer of the Intellectual Property and the Other
Intellectual Property, and any stamp, duty or other tax chargeable in respect of
any instrument transferring property), together with any and all penalties,
interests and additions to Tax with respect thereto, and Seller and Buyer shall
cooperate in timely making all filings,
-31-
<PAGE>
returns, reports and forms as may be required to comply with the provisions of
such tax laws. Buyer and Seller shall also cooperate in providing each other
with appropriate resale exemption certifications and other similar tax and fee
documentation.
(g) Delivery of Books and Records, etc. (i) On the Closing Date, Seller
-----------------------------------
will take all commercially reasonable steps to deliver or make available to
Buyer at the locations at which the Business is conducted all of the Books and
Records and such other Assets as are in Seller's possession at other locations,
and if at any time after the Closing Seller discovers in its possession or under
its control any other Books and Records or other Assets, it will forthwith
deliver such Books and Records or other Assets to Buyer.
(ii) Buyer and Seller agree that Seller may maintain copies of any Books
and Records that are included in the Assets and that are delivered to Buyer
hereunder and Seller may prepare a comprehensive index and file plan of
such Books and Records (the "File Plan"). Buyer agrees to retain and
---------
maintain such Books and Records in a manner consistent with the File Plan
for a period of not less than ten years from the Closing Date (plus any
additional time during which a party has been advised that (A) there is an
ongoing tax audit with respect to periods prior to the Closing Date, or (B)
such period is otherwise open to assessment). During such period, Buyer
agrees to give Seller and its representatives reasonable cooperation,
access (including copies) and staff assistance, as needed, during normal
business hours and upon reasonable notice, with respect to the Books and
Records delivered to Buyer hereunder, and Seller agrees to give Buyer and
its representatives reasonable cooperation, access and staff assistance, as
needed, during normal business hours and upon reasonable notice, with
respect to the books and records and other financial data relating to the
Business and retained by Seller, in each case as may be necessary for
general business purposes, including the preparation of tax returns and
financial statements and the management and handling of tax audits;
provided that such cooperation, access and assistance does not unreasonably
-------- ----
disrupt the normal operations of Buyer or Seller. Buyer shall not destroy
or otherwise dispose of the Books and Records for the period set forth in
the immediately preceding sentence without written consent of Seller, and
thereafter Buyer shall, prior to any proposed destruction or other
disposition of any of the Books and Records, provide Seller reasonable
written notice of such proposed destruction or other disposition, and
permit Seller, at its option, to take possession of such Books and Records.
(h) Transition of Business. Seller and Buyer shall cooperate with each
----------------------
other to create an orderly transition of the Business including in the areas
described in the Transition Services Agreement in the form attached hereto as
Exhibit A (the "Transition Services Agreement") by providing or causing its
- ---------
affiliates to provide to Buyer certain transition services for certain periods
as set forth in the Transition Services Agreement. Pursuant to the Transition
Services Agreement, Buyer will pay Seller certain fees as an inducement to Buyer
to terminate its use of Seller's services thereunder. At the Closing, Buyer and
Seller shall execute and deliver the Transition Services Agreement. Promptly
following the execution of this Agreement, representatives of Buyer and Seller
shall meet to develop a transition plan which will identify services, service
periods and service charges to be provided pursuant to the Transition Service
Agreement and which will be completed prior to the Closing.
-32-
<PAGE>
(i) Tax Controversies. Seller shall have the sole right to represent
-----------------
the interests of the Business in any Tax audit or administrative or court
proceeding relating to Taxes that are not an Assumed Liability; provided,
--------
however, that Buyer shall have the right to participate in any such audit or
- -------
proceeding only to the extent that (i) such audit or proceeding involves a Tax
(other than an income, franchise, value-added, single business, or similar tax),
a real or personal property tax, or a sales or use tax that is attributable to
any of the Assets and (ii) there is a reasonable possibility that a settlement
reached or final determination made with respect to such audit or proceeding
would have a direct and materially adverse impact on the liability of Buyer for
Taxes imposed on the Business in taxable periods (or partial periods) ending
after the Closing Date.
(j) Employees. (i)(A) Non-Collectively Bargained Employees. Buyer shall
--------- ------------------------------------
offer to employ those non-collectively bargained employees of Seller who are
employed on the Closing Date at the Owned Property, who are employed on or about
September 10, 1999 (the "Schedule Date") and are listed on Schedule 8(j)
attached hereto (all such employees, including any employees hired by Seller for
employment at the Owned Property after the Schedule Date, being referred to
herein as the "Offered Non-Collectively Bargained Employees" and all such
--------------------------------------------
employees, including any such employees hired by Seller after the Schedule Date,
who accept such offer of employment being referred to herein as the "Transferred
-----------
Non-Collectively Bargained Employees") effective on the Closing Date (or, in the
- ------------------------------------
case of Transferred Non-Collectively Bargained Employees who are on disability
leave or authorized leave of absence, as soon as they return from such leave, in
either case, within 26 weeks after the commencement of any disability leave or
other authorized leave) at salaries and wages that are substantially the same in
the aggregate, as the salaries and wages in effect on the date hereof, and at
benefits as provided by Buyer to similarly situated non-collectively bargained
employees of Buyer's frozen foods division on the date hereof. Buyer shall
maintain such salaries, wages and benefits for at least 12 months following the
Closing Date, provided, that Buyer shall employ such Transferred Non-
Collectively Bargained Employees at will.
(B) Collectively Bargained Employees. Buyer shall offer to
--------------------------------
employ those employees of Seller who are employed on the Closing Date
at Seller's West Seneca, New York facility, whose employment is
governed by the CBA and who, for those employees employed as of the
Schedule Date, are listed on Schedule 8(j) attached hereto, (all such
employees, including any employees hired by Seller after the Schedule
Date, being referred to herein as the "Offered Collectively Bargained
Employees" and all such employees, including any employees hired by
Seller after the Schedule Date, who accept such offer of employment
being referred to herein as the "Transferred Collectively Bargained
Employees") effective on the Closing Date (or, in the case of
Transferred Collectively Bargained Employees who are on disability
leave or authorized leave of absence, as soon as they return from such
leave, in either case, within 26 weeks after the commencement of any
disability leave or other authorized leave) in accordance with the
terms of the CBA as in effect as of the date hereof.
-33-
<PAGE>
(ii) Seller shall terminate employment of all Transferred Non-
Collectively Bargained Employees and all Transferred Collectively Bargained
Employees (collectively, "Transferred Employees") effective as of the
Closing Date.
(iii) Buyer agrees to maintain a defined benefit pension plan as of
the Closing Date which shall be intended to be qualified under Section
401(a) of the Code and a trust which shall be intended to be exempt from
tax under Section 501(a) of the Code (the "Pension Plan"). The Pension
Plan shall cover the Transferred Collectively Bargained Employees from and
after the Closing Date in accordance with the CBA.
(iv) With respect to each Transferred Employee:
(A) Buyer shall waive pre-existing condition requirements,
evidence of insurability provisions, waiting period requirements or any
similar provisions under any group health or life insurance plan
maintained or sponsored by or contributed to by Buyer for such
Transferred Employees after the Closing Date.
(B) Buyer shall apply toward any deductible requirements and out-
of-pocket maximum limits under its employee welfare benefit plans any
amounts paid (or accrued) by each Transferred Employee under Seller's
welfare benefit plans during the current plan year.
(C) Seller's plans shall be responsible for health and accident
claims covered by Seller's medical plans; provided that such expenses
were incurred prior to the Closing Date. Buyer's plans shall be
responsible for all health and accident claims covered by Buyer's
medical plans relating to Transferred Employees that may be incurred on
or after the Closing Date. For purposes of this Section 8(j), a health
or accident claim shall be deemed to have been incurred when the
services relating to the event or condition that is the subject to the
claims are performed or the supplies relating to any such event are
furnished.
(D) Buyer shall recognize for purposes of eligibility to
participate and vesting (but not for purposes of benefit accrual) under
its employee benefit plans, the service of any Transferred Non-
Collectively Bargained Employee and to the extent required by the CBA,
any Transferred Collectively Bargained Employee, with Seller, Kraft
Foods, Inc. or any of their respective affiliates prior to the Closing
Date.
(E) Seller shall be responsible for satisfying obligations under
Section 601 et seq. of ERISA and Section 4980B of the Code, to provide
continuation coverage to or with respect to any Offered Non-Collectively
Bargained Employee and Offered Collectively Bargained Employee in
accordance with law with respect to any "qualifying event" occurring on
or prior to the Closing Date. Buyer shall be responsible for satisfying
obligations under Section 601 et seq. of ERISA and Section 4980B of the
Code, to provide continuation coverage to or with respect to any
Transferred Employee in accordance with law with respect to any
"qualifying event" which occurs after the Closing Date.
-34-
<PAGE>
(F) Buyer shall be responsible for all workers' compensation
benefits payable to Transferred Employees with respect to work related
injuries of Transferred Employees that occur on or after the Closing
Date. Seller shall be responsible for all worker's compensation benefits
payable to Transferred Employees and employees of Seller who do not
become Transferred Employees with respect to work related injuries
occurring prior to the Closing Date.
(G) Seller and Buyer agree that the responsibility for the
reporting of payroll taxes with respect to Transferred Employees shall
be assigned under the Alternative Procedure described in Section 5 of
Rev. Proc. 96-60.
(H) Except for any liabilities retained or assumed by Kraft Foods,
Inc. or its affiliates under the CBA, Seller shall as of the Closing
Date assign, and Buyer agrees to assume, perform and discharge the
rights and obligations under the CBA, including, but not limited to, all
liabilities in respect of severance and retiree health benefits for
Transferred Collectively Bargained Employees. Seller shall indemnify
Buyer against any monetary damages incurred by Buyer under the CBA
arising out of any acts or omissions of Seller occurring prior to the
Closing Date; provided, however, that Buyer shall afford the Seller the
-------- -------
opportunity to defend any action or claim which could result in such
monetary damages and shall reasonably cooperate with Seller in defending
any such action or claim.
(I) Buyer shall be responsible for all vacation earned but not
taken by Transferred Employees as of the Closing Date and for which
appropriate accrual has been reflected on the Closing Working Capital
Statement.
(J) Buyer represents that it does not currently contemplate a plant
closing or mass layoff of Transferred Employees, or any terminations
that, in the aggregate, would constitute a mass layoff of Transferred
Employees, within one year following the Closing Date.
(K) Seller shall retain liabilities with respect to retiree
healthcare for Transferred Non-Collectively Bargained Employees who are
eligible to retire and receive retiree medical benefits under Seller's
welfare benefit plans; provided, however, that during the period such
employees are employed by Buyer and its affiliates, Buyer shall provide
health coverage to such employees, and Seller shall commence providing
retiree health insurance coverage upon the termination of employment of
such employees with Buyer and its affiliates. With respect to
Transferred Non-Collectively Bargained Employees who, on the Closing
Date, are not eligible to retire and receive retiree medical benefits
but would, if they remained employed until the second anniversary of the
Closing Date, become so eligible, the Buyer and Seller shall cooperate
in determining the amount of a special payment, which shall be paid to
each such employee within 90 days following the Closing Date by Seller
with one-half of such payment being the responsibility of each of Buyer
and Seller. Buyer shall, within 15 days of receipt of notice from
Seller, reimburse Seller for such special payments made to such
-35-
<PAGE>
employees. With respect to any Transferred Non-Collectively Bargained
Employee not mentioned above in this Section (K), such employees shall
not, subject to the terms of the Seller's welfare benefit plans
providing retiree medical benefits, have any entitlement to receive any
retiree medical benefits and neither Seller nor Buyer shall have any
obligation to provide any such benefits.
(v) If Buyer terminates any Transferred Non-Collectively Bargained
Employee, other than for cause (as used in Buyer's policies, practices or
procedures), disability, death or sale of Owned Property where comparable
employment is obtained, within one year following the Closing Date, or if
any Offered Non-Collectively Bargained Employee declines an offer of
employment which would require him or her to relocate to a job site more
than 50 miles from such employee's job site immediately prior to the
Closing Date, Buyer shall pay to such employee severance benefits in an
amount equal to one week of base pay for each year of service with Buyer,
Seller, Kraft Foods, Inc. and any of their respective affiliates, and, if
the employee releases all claims against Buyer, Seller and their
affiliates, an additional 12 weeks of base pay.
9. Further Assurances. From time to time, as and when requested by any
------------------
party hereto, the other party hereto shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions (subject to the limitations
set forth in Section 8(a) and Section 8(b)), as such other party may reasonably
------------ -------------
deem necessary or desirable to consummate the transactions contemplated by this
Agreement.
10. Indemnification.
---------------
(a) Indemnification by Seller. Subject to paragraphs (c)-(f) of this
-------------------------
Section 10, Seller shall indemnify Buyer and its officers, directors, employees
- ----------
and affiliates (the "Buyer Indemnified Parties") in respect of, and hold each of
-------------------------
them harmless from and against, any loss, liability, damage, judgment, cost or
expense, on an after-tax basis ("Losses") suffered, incurred or sustained by any
of them or to which any of them becomes subject, resulting from or caused by (i)
any breach of representation or warranty, except for those representations and
warranties contained in Section 4(d) hereof, (ii) nonfulfillment of or failure
to perform any covenant or agreement on the part of Seller contained in this
Agreement, (iii) an Excluded Liability (other than Excluded Liabilities that are
Environmental Liabilities relating to the disposal or arranging for disposal of
Hazardous Substances by prior owners or operators of the Owned Property and
Leased Property at off-site locations) or (iv) any violation by Seller of or
failure by Seller to comply with the bulk transfer laws of any state or the
fraudulent conveyance or preferential transfer laws of the United States or any
state.
-36-
<PAGE>
(b) Indemnification by Buyer. Subject to paragraphs (c)-(f) of this
------------------------
Section 10, Buyer shall indemnify Seller and its officers, directors, employees
- ----------
and affiliates (the "Seller Indemnified Parties") in respect of, and hold each
--------------------------
of them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting from
or caused by (i) any breach of representation or warranty, (ii) nonfulfillment
of or failure to perform any covenant or agreement on the part of Buyer
contained in this Agreement, or (iii) an Assumed Liability.
(c) Limitations on Indemnity. Notwithstanding anything to the
------------------------
contrary contained in this Agreement, no amounts of indemnity shall be payable
as a result of any claim in respect of a Loss arising under clause (a)(i) or
(b)(i) of this Section 10:
----------
(i) (A) unless, until and then only to the extent that the
Indemnified Parties have suffered, incurred, sustained or become subject to
Losses referred to in such paragraph in excess of $2,000,000 in the
aggregate; and (B) to the extent that such Loss, individually or in the
aggregate with all other Losses referred to in such paragraph, exceeds 20%
of the Final Purchase Price; or
(ii) to the extent that the Indemnified Party had a reasonable
opportunity, but failed, in good faith to mitigate the Loss, including but
not limited to the failure to use commercially reasonable efforts to
recover under a policy of insurance or under a contractual right of set-off
or indemnity.
(d) Exclusive Remedy. Each party hereto acknowledges and agrees that,
----------------
except with respect to Section 5(c), (d), (e), (g) and (j) and Section 7(a),
----------------------------------- -------------
from and after the Closing, its (and the Buyer Indemnified Parties') sole and
exclusive remedy with respect to any and all claims relating to the subject
matter of this Agreement and the other agreements contemplated hereby shall be
pursuant to the indemnification provisions set forth in this Section 10. In
----------
furtherance of the foregoing, each party hereto waives, from and after the
Closing, to the fullest extent permitted under applicable law, any and all other
rights, claims and causes of action (other than tort claims of, or causes of
action arising from, fraudulent misrepresentation) it may have against the other
relating to the subject matter of this Agreement and the other agreements
contemplated hereby arising under or based upon any federal, state, local or
foreign statute, law, ordinance, rule or regulation or otherwise. Buyer further
acknowledges and agrees that, (i) other than the representations and warranties
of Seller specifically contained in this Agreement, the Schedules and the
Transition Services Agreement, there are no representations or warranties of
Seller or its representatives or any other Person either express or implied with
respect to the Business, the Assets or the Assumed Liabilities and (ii) it shall
have no claim or right to indemnification with respect to any information,
documents or materials furnished by Seller or its representatives or any other
Person or any of their officers, directors, employees, agents or advisors,
including the Offering Memorandum and any information, documents or material
made available to Buyer in certain "data rooms," management presentations or any
other form in expectation of the transactions contemplated by this Agreement.
(e) Termination of Indemnification. The obligations to indemnify and
------------------------------
hold harmless a Person pursuant to Sections 10(a)(i) and 10(b)(i) shall
----------------- --------
terminate when the applicable representation or warranty terminates pursuant to
Section 14; provided, however, that such
- ---------- -------- -------
-37-
<PAGE>
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the Person to be indemnified or the related party thereto
shall have, prior to the expiration of the applicable period, previously made a
claim by delivering a written notice (stating in reasonable detail the nature
of, and factual and legal basis for, any such claim for indemnification, and the
provisions of this Agreement upon which such claim for indemnification is made)
to the indemnifying party. The obligation to indemnify and hold harmless any
Person pursuant to the other clauses of Sections 10(a) and 10(b) shall not
-------------- -----
terminate.
(f) Procedures Relating to Indemnification. (i) In order for a Person
--------------------------------------
(the "Indemnified Party") to be entitled to any indemnification provided for
-----------------
under this Agreement in respect of, arising out of or involving a claim or
demand made by any Person against the Indemnified Party (a "Third Party Claim"),
-----------------
such Indemnified Party must notify the indemnifying party in writing, and in
reasonable detail, of the Third Party Claim as promptly as reasonably possible
after receipt by such Indemnified Party of notice of the Third Party Claim;
provided, however, that failure to give such notification on a timely basis
- -------- -------
shall not affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually and materially prejudiced as a
result of such failure. Thereafter, the Indemnified Party shall deliver to the
indemnifying party, within five business days after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim; provided,
--------
however, that failure to deliver such copies on a timely basis shall not affect
- -------
the indemnification provided hereunder except to the extent the Indemnifying
Party shall have been actually and materially prejudiced as a result of such
failure.
(ii) If a Third Party Claim is made against an Indemnified Party, the
indemnifying party shall be entitled to participate in the defense thereof
and, if it so chooses, to assume the defense thereof with counsel selected
by the indemnifying party. Should the indemnifying party so elect to assume
the defense of a Third Party Claim, (A) it shall defend such Third Party
Claim by all appropriate proceedings, which proceedings will be vigorously
and diligently prosecuted by the indemnifying party to a final conclusion
or will be settled at the discretion of the indemnifying party and (B) the
indemnifying party shall not be liable to the Indemnified Party for legal
expenses subsequently incurred by the indemnified party in connection with
the defense thereof. If the Indemnifying Party assumes such defense, the
indemnified party shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the
counsel employed by the indemnifying party, it being understood, however,
that the indemnifying party shall control such defense. If the Indemnifying
Party chooses to defend any Third Party Claim, all the parties hereto shall
cooperate in the defense or prosecution of such Third Party Claim. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
which are reasonably relevant to such Third Party Claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
(g) (i) Seller shall indemnify the Buyer Indemnified Parties in
respect of and hold each of them harmless from and against Environmental Costs:
-38-
<PAGE>
(A) that arise from actual or potential non-compliance with
Environmental Law or Environmental Conditions that, in each case, are
disclosed in the Environmental Reports on the Disclosure Schedules or
in Item 17 of Schedule 4(k) at a rate of 100%; and
(B) that do not arise from actual or potential non-compliance or
Environmental Conditions that, in each case, are disclosed in the
Environmental Reports on the Disclosure Schedules or in Item 17 of
Schedule 4(k), at a rate of (x) 50% for Environmental Costs that in
the aggregate are equal to or less than $1,000,000 and (y) 100% for
Environmental Costs that exceed $1,000,000;
that, in both (A) or (B), arise pursuant to an Order of a Governmental or
Regulatory Authority or Environmental Law after the Closing and before the third
anniversary of the Closing Date regardless of when Environmental Costs related
to such requirements are incurred by Buyer (so long as, prior to the expiration
of such period, Buyer has delivered written notice to Seller describing in
reasonable detail the nature of, and factual and legal basis for, any claim for
reimbursement) provided that Seller shall have the right to approve in advance
all Environmental Costs for remediation, which approval will not be unreasonably
withheld or delayed.
Notwithstanding the foregoing, if on or before the third anniversary
of the Closing Date Buyer notifies Seller of an Environmental Condition (a
"Specified Environmental Condition") caused by Seller during the period of its
ownership of the Owned Property or its lease of the Leased Property, as the case
may be, and if Seller declines to provide the indemnification set forth in this
Section (g)(i) with respect to such Specified Environmental Condition because an
Order does not yet exist relating thereto, then this Section (g)(i) shall
continue to apply to such Specified Environmental Condition until the third
anniversary of the date Seller declined to provide such indemnification. Buyer
agrees that it shall not make any disclosure of filings with any Governmental or
Regulatory Authority relating to any Environmental Condition, except as may be
required by Law.
(ii) Seller shall indemnify Buyer Indemnified Parties in respect of
and hold each of them harmless from and against all costs relating to the
disposal or arrangement for disposal, or alleged disposal or alleged
arrangement for disposal by Seller or of Hazardous Substances at any off-
site disposal facility or location;
(iii) "Environmental Costs" means any and all cleanup costs,
-------------------
remediation, removal, or other response costs (which without limitation
shall include costs to cause the Business to come into compliance with
Environmental Laws), investigation costs (including without limitation fees
of consultants, counsel, and other experts in connection with any
environmental investigation, testing, audits or studies required to be
conducted under Environmental Laws), losses, liabilities or obligations,
payments, damages (including without limitation any actual, punitive or
consequential damages under any statutory laws, common law cause of action
or contractual obligations or otherwise, including without limitation
damages (x) of third parties for property damage, or (y) to natural
resources), civil or criminal fines or penalties, judgments, or amounts
paid in settlement (net of recovery actually received from third parties
including insurance recovery, net of collection costs, and excluding
Buyer's internal administrative and
-39-
<PAGE>
personnel costs) reasonably and necessarily incurred as a result of (x)
remediation to the extent required under Environmental Law of any
Environmental Condition and (y) correction of Seller's noncompliance with
Environmental Laws, in each case, existing as of the Closing Date.
"Environmental Condition" means the presence or likely presence of
Hazardous Substances on a property under conditions that indicate an
existing release (as such term is defined in CERCLA), a past release, or a
material threat of a release of Hazardous Substances.
"Environmental Liability" shall mean any liability for an
Environmental Condition arising under Environmental Laws or relating to a
failure to comply with Environmental Laws, including any liability imposed
by Environmental Laws for the investigation and cleanup of the release,
disposal, discharge or presence of pollutants, contaminants and hazardous
or toxic wastes, substances and materials.
As used in this Agreement, the term "Hazardous Substances" means any
substance: (i) the presence of which requires or may require investigation
or remediation of any kind under any Environmental Laws; (ii) which is or
becomes defined as "hazardous waste", hazardous material", hazardous
substance", "asbestos", "industrial waste", "radioactive material",
"radioactive waste", "low-level radioactive waste", "oil", "petroleum",
"petroleum products", "polychlorinated biphenyls", "pollutant", or
"contaminant" under any Environmental Law, including, without limitation,
CERCLA and RCRA; or (iii) that is regulated by, or may not or in the future
form the basis of liability under, any Environmental Laws.
11. Assignment. Except as set forth below, this Agreement and any
----------
rights and obligations hereunder shall not be assignable or transferable by
Buyer or Seller (except by operation of law in connection with a merger or sale
of stock, or sale of substantially all the assets, of Buyer or Seller) without
the prior written consent of the other party and any purported assignment
without such consent shall be void and without effect; provided, however, that
-------- -------
without the consent of Seller, Buyer may assign its rights and obligations
hereunder to a wholly-owned subsidiary or as security to its lenders upon
written notice of such assignment to Seller (it being understood, however, that
no such assignment shall limit or otherwise affect Buyer's obligations
hereunder).
12. No Third-Party Beneficiaries. This Agreement is for the sole
----------------------------
benefit of the parties hereto and their permitted assigns and nothing herein
express or implied (including Section 10) shall give or be construed to give to
----------
any Person, other than the parties hereto and such permitted assigns, any legal
or equitable rights hereunder. Notwithstanding the foregoing, each of Buyer and
Seller shall be entitled to make indemnification claims for and on behalf of the
indemnified parties described in Section 10(a) and Section 10(b), respectively.
------------- -------------
13. Termination. This Agreement may be terminated, and the
-----------
transactions contemplated hereby may be abandoned:
(i) at any time before the Closing, by mutual written agreement of
Seller and Buyer;
-40-
<PAGE>
(ii) at any time before the Closing, by Seller or Buyer, in the event
that any Order or Law becomes effective restraining, enjoining, or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement, upon notification of the non-
terminating party by the terminating party; or
(iii) at any time after March 31, 2000 by Seller or Buyer upon
notification of the non-terminating party by the terminating party if the
Closing shall not have occurred on or before such date and such failure to
consummate is not caused by a material breach of this Agreement by the
terminating party.
(b) In the event of termination by Seller or Buyer pursuant to this
Section 13, written notice thereof shall forthwith be given to the other party
- ----------
and the transactions contemplated by this Agreement shall be terminated, without
further action by any party. If the transactions contemplated by this Agreement
are terminated as provided herein:
(i) Buyer shall return all documents and copies and other materials
received from or on behalf of Seller relating to the transactions
contemplated hereby, whether so obtained before or after the execution
hereof, to Seller; and
(ii) all confidential information received by Buyer with respect to
the Assets, the Assumed Liabilities and the Business shall be treated in
accordance with the Confidentiality Agreement, which shall remain in full
force and effect in accordance with its terms notwithstanding the
termination of this Agreement.
(c) If this Agreement is terminated and the transactions contemplated
hereby are abandoned as described in this Section 13, this Agreement shall
----------
become void and of no further force and effect, except for the provisions of (i)
Section 7(a) relating to the obligation of Buyer to keep confidential certain
- ------------
information and data obtained by it, (ii) Section 8(c) relating to publicity,
------------
(iii) Section 15 relating to certain expenses and (iv) this Section 13. Nothing
---------- ----------
in this Section 13 shall be deemed to release any party from any liability for
----------
any breach by such party of the terms and provisions of this Agreement or to
impair the right of any party to compel specific performance by another party of
its obligations under this Agreement.
14. Survival of Representations; No Other Representations. (a) The
-----------------------------------------------------
representations and warranties in this Agreement and in any other document
delivered in connection herewith shall survive the Closing solely for purposes
of Sections 10(a) and 10(b) and shall terminate at the close of business
-------------- -----
eighteen (18) months following the Closing Date. Notwithstanding the foregoing,
with respect to any Owned Property insured by a Policy, the representations and
warranties continued in Section 4(d) hereof shall terminate and not survive the
Closing Date.
(b) Notwithstanding anything to the contrary contained in this
Agreement, it is the explicit intent of each party hereto that Seller is making
no representation or warranty whatsoever, express or implied, including but not
limited to any implied representation or warranty as to condition,
merchantability or suitability as to any of the Assets or other properties of
the Business, except those representations and warranties contained in Section 4
---------
or the Schedules hereto. It is understood that, except to the extent otherwise
expressly provided herein,
-41-
<PAGE>
Buyer takes the Assets "as is" and "where is". In particular, Seller makes no
representation or warranty to Buyer with respect to (i) the information set
forth in the Offering Memorandum, dated June 1999, delivered by Goldman, Sachs &
Co. to Buyer, (ii) any information, document or material made available to Buyer
in certain "data rooms" or copies thereof provided directly to Buyer, or (iii)
any financial projection or forecast relating to the Business. With respect to
any such projection or forecast delivered by or on behalf of Seller to Buyer,
Buyer acknowledges that (i) there are uncertainties inherent in attempting to
make such projections and forecasts, (ii) it is familiar with such
uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts
furnished to it (including the reasonableness of the assumptions underlying such
projections or forecasts) and (iv) it shall have no claim against Seller with
respect thereto.
15. Expenses. Whether or not the transactions contemplated hereby
--------
are consummated, and except as otherwise specifically provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
16. Amendment and Waiver. This Agreement may be amended, or any
--------------------
provision of this Agreement may be waived; provided that any such amendment or
-------- ----
waiver shall be binding upon Seller only if set forth in a writing executed by
Seller and referring specifically to the provision alleged to have been amended
or waived, and any such amendment or waiver shall be binding upon Buyer only if
set forth in a writing executed by Buyer and referring specifically to the
provision alleged to have been amended or waived. No course of dealing between
or among any Persons having any interest in this Agreement shall be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any Person under or by reason of this Agreement. No waiver by
any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or be construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion.
17. Notices. All notices or other communications required or
-------
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy, or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
shall be deemed given when so delivered by hand, telexed, cabled or telecopied,
or if mailed, three days after mailing (one business day in the case of express
mail or overnight courier service), as follows:
(i) if to Seller,
The Eggo Company
c/o Kellogg Company
One Kellogg Square
P.O. Box 3599
Battle Creek, Michigan 49106-3599
Telecopy No.: (616) 961-3276
Attention: General Counsel
-42-
<PAGE>
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Telecopy No.: (212) 530-5219
Attention: Howard S. Kelberg, Esq.
(ii) if to Buyer,
Aurora Foods Inc.
456 Montgomery St.
Suite 2200
San Francisco, CA 94104
Telecopy No. 415-982-3023
Attention: James B. Ardrey, Vice Chairman
with a copy to:
Richards & O'Neil, LLP
885 Third Avenue
New York, NY 10022
Telecopy No. (212) 750-9022
Attention: Craigh Leonard, Esq.
18. Interpretation. The headings and captions contained in this
--------------
Agreement, in any Exhibit or Schedule hereto and in the table of contents to
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any capitalized terms used in
any Schedule or Exhibit and not otherwise defined therein shall have the
meanings set forth in this Agreement. The use of the word "including" herein
shall mean "including without limitation."
19. No Strict Construction. Notwithstanding the fact that this
----------------------
Agreement has been drafted or prepared by one of the parties, Buyer and Seller
confirm that both they and their respective counsel have reviewed, negotiated
and adopted this Agreement as the joint agreement and understanding of the
parties, and the language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any Person.
20. Counterparts. This Agreement may be executed in one or more
------------
counterparts (including by means of telecopied signature pages), all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties and
delivered to the other party.
21. Entire Agreement. This Agreement and the other agreements
----------------
referred to herein (including the Confidentiality Agreement), together with that
certain letter agreement, dated the date hereof, between Buyer and Seller,
contain the entire agreement and understanding
-43-
<PAGE>
between the parties hereto with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, whether written or oral,
relating to such subject matter.
22. Schedules. The disclosures in the Schedules hereto are to be
---------
taken as relating to the representations and warranties of Seller as a whole.
The inclusion of information in the Schedules hereto shall not be construed as
an admission that such information is material to the Assets, the Business or
Seller. In addition, matters reflected in the Schedules are not necessarily
limited to matters required by this Agreement to be reflected in such Schedules.
Such additional matters are set forth for informational purposes only and do not
necessarily include other matters of a similar nature.
23. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be valid and effective under
applicable law, but if any provision of this Agreement or the application of any
such provision to any Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
24. Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
------------------
the provisions of any so-called bulk transfer laws of any jurisdiction in
connection with the sale of the Assets.
25. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
law principles thereof.
26. Exhibits and Schedules. All Exhibits and Schedules annexed hereto
----------------------
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein.
27. Assignment; Guarantee. Kellogg Company agrees to assign, transfer
---------------------
and set over to Buyer its entire right, title and interest in the trademarks set
forth in Schedule 1(b)(iv), together with any good will of the Business
-----------------
connected thereto; and Kellogg Company hereby unconditionally, guarantees the
due and punctual performance of all of Seller's obligations under this
Agreement.
-44-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
THE EGGO COMPANY
By: ____________________________
Name:_______________________
Title:______________________
AURORA FOODS INC.
By: ____________________________
Name:_______________________
Title:______________________
With respect to Section 27 only:
KELLOGG COMPANY
By: ____________________________
Name:_______________________
Title:______________________
-45-
<PAGE>
Exhibit 10.1
AURORA FOODS INC.
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
This FIFTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
November 1, 1999 and entered into by and among AURORA FOODS INC., a Delaware
corporation ("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), THE CHASE MANHATTAN BANK, as administrative agent
for Lenders (in such capacity, "Administrative Agent"), NATIONAL WESTMINSTER
BANK PLC, as syndication agent (in such capacity, "Syndication Agent") and UBS
AG, Stamford Branch, as documentation agent (in such capacity, "Documentation
Agent").
R E C I T A L S
---------------
WHEREAS, Company, certain financial institutions (the "Existing
Lenders"), The Chase Manhattan Bank, as administrative agent, National
Westminster Bank Plc, as syndication agent, and UBS AG, Stamford Branch, as
documentation agent, are parties to the Fourth Amended and Restated Credit
Agreement, dated as of March 31, 1999 (the "Existing Credit Agreement"),
pursuant to which the Existing Lenders provided term loan facilities in an
aggregate principal amount of $325,000,000 (the "Existing Term Loan Facilities")
and a revolving credit facility in an aggregate principal amount of $175,000,000
(the "Revolving Credit Facility").
WHEREAS, Company desires that the Existing Lenders and the New Lenders
(capitalized terms used in these recitals without definition shall have the
respective meanings assigned in subsection 1.1 hereof) amend and restate the
Existing Credit Agreement to provide Additional Tranche B Term Loans in an
aggregate principal amount of $275,000,000 which will be used to finance the
Lender's Bagels Acquisition and to pay related fees and expenses.
WHEREAS, Company desires that all of its future Subsidiaries guaranty
all of the obligations of Company with respect to the credit facilities provided
by Lenders.
WHEREAS, Company desires to secure all of the Obligations and desires
that all of its future Subsidiaries secure their respective obligations under
the Subsidiary Guaranty, by granting to Administrative Agent, for the benefit of
Agents and Lenders, (i) a first priority Lien on substantially all of their
respective real and personal property and (ii) a first priority pledge of all of
the capital stock of their respective direct Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree to
amend and restate the Existing Credit Agreement as follows:
<PAGE>
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"Acquisition" means the transactions contemplated by the Acquisition
Agreement.
"Additional Tranche B Term Loan Commitment" means the commitment of a
Lender to make an Additional Tranche B Term Loan to Company pursuant to
subsection 2.1A(iii), and "Additional Tranche B Term Loan Commitments" means
such commitments of all Lenders in the aggregate.
"Additional Tranche B Term Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the funding of the
Additional Tranche B Term Loans, that Lender's Additional Tranche B Term Loan
Commitment and (ii) after the funding of the Additional Tranche B Term Loans,
the outstanding principal amount of the Additional Tranche B Term Loan of that
Lender.
"Additional Tranche B Term Loans" means the Loans made by the Lenders to
the Company pursuant to subsection 2.1A(iii).
"Acquisition Agreement" means that certain Asset Purchase Agreement dated
as of December 18, 1996, by and between Company and Seller, as in effect on the
Closing Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date,
the rate per annum obtained by dividing (i) the London Interbank offered rate
--------
for deposits in U.S. Dollars for maturities comparable to the Interest Period
for which such Adjusted Eurodollar Rate will apply as of approximately 11:00
A.M. (London time) on such Interest Rate Determination Date as set forth on
Telerate Page 3750 by (ii) a percentage equal to 100% minus the stated maximum
-----
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable on such Interest
Rate Determination Date to any member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Adjustment Date" means the first Business Day following receipt by the
Administrative Agent of both (i) the financial statements required to be
delivered pursuant to subsection 6.1(ii) or 6.1(iii), as the case may be, for
the most recently completed fiscal period and (ii) the certificate required to
be delivered pursuant to subsection 6.1(iv) with respect to such fiscal period.
2
<PAGE>
"Administrative Agent" means Chase, in its capacity as Administrative
Agent, and any successor to Chase in such capacity appointed pursuant to
subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in subsection 2.6C.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means, individually, each of Administrative Agent, the Syndication
Agent and the Documentation Agent, and "Agents" means Administrative Agent, the
Syndication Agent and the Documentation Agent, collectively.
"Aggregate Amounts Due" has the meaning assigned to that term in subsection
10.5.
"Agreement" means this Fifth Amended and Restated Credit Agreement dated as
of November 1, 1999, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"Applicable Margin" means the Applicable Margin set forth on Annex A hereto
-------
opposite the level for which the ratio of Consolidated Total Debt to
Consolidated EBITDA so determined satisfies the corresponding criteria set forth
under the heading "Ratio of Consolidated Total Debt to Consolidated EBITDA",
which Applicable Margin shall be adjusted on each Adjustment Date; provided that
--------
in the event that the financial statements required to be delivered pursuant to
subsection 6.1(ii) and (iii), as applicable, and the related certificate
required pursuant to subsection 6.1(iv), are not delivered when due, then if
such financial statements are not delivered prior to the date upon which the
resultant Potential Event of Default shall become an Event of Default, then,
effective upon such Potential Event of Default becoming an Event of Default,
during the period from the date upon which such financial statements were
required to be delivered until one Business Day following the date upon which
they actually are delivered, the Applicable Margin (x) with respect to Revolving
Loan and Tranche A Term Loans shall be 1.50% if such Loans are Base Rate Loans
and 2.50% if such Loans are Eurodollar Rate Loans, (y) with respect to Tranche B
Term Loans shall be 2.00% if such Loans are Base Rate Loans and 3.00% if such
Loans are Eurodollar Rate Loans, and (z) with respect to the Commitment Fee
shall be 0.50%; and provided further that for the period from the
-------- -------
3
<PAGE>
Effective Date to the next Adjustment Date, the Applicable Margin shall be
deemed to correspond to Level 4 set forth on Annex A hereto.
-------
"Applied Amount" has the meaning assigned to that term in subsection
2.4C(ii).
"Approved Fund" means, with respect to a Lender that is a fund that invests
in loans, any other fund that invests in loans and has the same investment
advisor as such Lender or is managed by an Affiliate of such investment advisor.
"Asset Sale" means the sale (including in any sale-leaseback transaction)
by Company or any of its Subsidiaries to any Person (other than Company or any
of its Wholly Owned Subsidiaries) of (i) any of the stock of any of Company's
Subsidiaries, (ii) all or substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any other
assets other than sales of assets (including without limitation inventory) in
the ordinary course of business and sales of obsolete equipment, excluding any
---------
such other assets to the extent that the aggregate value of such assets sold in
any single transaction or transactions is equal to $5,000,000 or less in any one
Fiscal Year.
"Assignment Agreement" means an assignment agreement in substantially the
form of Exhibit XVII annexed hereto or in such other form as may be approved by
------------
Administrative Agent.
"Assumption Agreement" means that certain Assignment and Assumption
Agreement dated as of December 31, 1996, by and between Seller and Company, as
in effect on the Closing Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate, (y) the
rate which is 2 of 1% in excess of the Federal Funds Effective Rate or (z) the
secondary market rate for certificates of deposit (grossed up for maximum
statutory reserve requirements) plus 1.00%.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"Business" means the assets and liabilities of Company relating to the
manufacture and sale of pancake syrup and pancake and waffle mix marketed under
the Mrs. Butterworth's and Country Crock brand names, as set forth in the
Acquisition Agreement.
4
<PAGE>
"Business Day" means (i) for all purposes other than as covered by clause
(ii) below, any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices,
determinations, fundings, issuances and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also (a) a day for trading by and
between banks in Dollar deposits in the London interbank market and (b) a day on
which banking institutions are open for business in London.
"CALPERS" means the California Public Employees Retirement System.
"Capital Lease" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means (i) marketable securities issued or directly and
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S & P or Moody's Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 from
S&P or at least P-1 from Moody's; (iv) certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition thereof and,
at the time of acquisition, having a rating of at least A-1 from S&P or at least
P-1 from Moody's, issued by any Lender or any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia having unimpaired capital and surplus of not less than $250,000,000
(each Lender and each such commercial bank being herein called a "Cash
Equivalent Bank"); and (v) Eurodollar time deposits having a maturity of less
than one year purchased directly from any Cash Equivalent Bank (provided such
deposit is with such Cash Equivalent Bank or any other Cash Equivalent Bank).
"Cash Proceeds" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received by Company or any of its Subsidiaries from such Asset Sale.
5
<PAGE>
"Certificate re Non-Bank Status" means a certificate substantially in the
form of Exhibit XIX annexed hereto delivered by a Lender to Administrative Agent
-----------
pursuant to subsection 2.7B(iii).
"Chase" means The Chase Manhattan Bank and its successors, including,
without limitation, its successors by merger.
"Closing Date" means December 31, 1996.
"Collateral" means all of the properties and assets (including capital
stock) in which Liens are purported to be granted by the Collateral Documents.
"Collateral Access Agreement" means any landlord waiver, mortgagee waiver,
bailee letter or any similar acknowledgment or agreement of any landlord or
mortgagee in respect of any Real Property Asset where any Collateral is located
or any warehouseman or processor in possession of any Inventory of any Loan
Party, substantially in the form of Exhibit XXI annexed hereto with such changes
-----------
thereto as may be agreed to by Administrative Agent in the reasonable exercise
of its discretion.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account Agreement
executed and delivered by Company and Administrative Agent on or prior to the
Effective Date, substantially in the form of Exhibit XX annexed hereto, pursuant
----------
to which Company may pledge cash to Administrative Agent to secure the
obligations of Company to reimburse Issuing Lenders for payments made under one
or more Letters of Credit as such Collateral Account Agreement may hereafter be
amended, restated, supplemented or otherwise modified from time to time.
"Collateral Documents" means the Pledge Agreement, the Security Agreement,
the Patent and Trademark Security Agreement, the Log Cabin Patent and Trademark
Security Agreement, the Duncan Hines Patent and Trademark Security Agreement,
the Van de Kamp's Patent and Trademark Agreement, the Sea Coast Patent and
Trademark Agreement, the Lender's Bagels Patent and Trademark Agreement, the
Collateral Account Agreement, the Mortgages and any other documents, instruments
or agreements delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant or perfect liens on any assets of
such Loan Party as security for the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
6
<PAGE>
"Commitment Fee" and "Commitment Fees" have the meanings assigned to such
terms in subsection 2.3A.
"Commitments" means the commitments of Lenders to make Loans as set forth
in subsection 2.1A.
"Company" has the meaning assigned to that term in the introduction to this
Agreement.
"Company Common Stock" means the common stock of Company, par value $0.01
per share.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit XIII annexed hereto delivered to Administrative Agent by Company
- ------------
pursuant to subsection 6.1(iv).
"Condemnation Proceeds" has the meaning assigned to that term in subsection
2.4B(iii)(d).
"Conforming Leasehold Interest" means any Recorded Leasehold Interest as to
which the lessor has agreed in writing for the benefit of Administrative Agent
(which writing has been delivered to Administrative Agent), whether under the
terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"Consolidated Capital Expenditures" means, for any period, the aggregate
amount paid or accrued by Company and its Subsidiaries for the rental, lease,
purchase (including by way of the acquisition of Securities of a Person),
construction or use of any property during such period, the value or cost of
which, in conformity with GAAP, would appear on the consolidated balance sheet
of Company and its Subsidiaries in the category of "purchases of property, plant
or equipment" at the end of such period, excluding any such expenditure made to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with insurance proceeds or
condemnation awards relating to any such damage, loss, destruction or
condemnation; provided, however, that Consolidated Capital Expenditures shall
-------- -------
not include expenditures up to an aggregate amount equal to the portion of the
purchase price for any Permitted Acquisition made pursuant to subsection 7.7(vi)
that would otherwise be treated as a Consolidated Capital Expenditure.
"Consolidated Cash Interest Coverage Ratio" means, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Cash
Interest Expense for such period.
7
<PAGE>
"Consolidated Cash Interest Expense" means, for any period, Consolidated
Interest Expense payable in Cash during such period.
"Consolidated Current Assets" means, as at any date of determination, the
total assets of Company and its Subsidiaries on a consolidated basis which may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents and any current tax asset.
"Consolidated Current Liabilities" means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
which may properly be classified as current liabilities in conformity with GAAP,
but excluding all short-term Indebtedness for borrowed money and the current
portion of any long-term Indebtedness of the Company, in each case to the extent
included therein, and any current taxes payable and the current portion of any
deferred taxes.
"Consolidated EBITDA" means, for any period, (i) the sum of the amounts for
such period of (a) Consolidated Net Income, plus (b) to the extent deducted in
----
determining such Consolidated Net Income, (1) Consolidated Interest Expense, (2)
depreciation, (3) depletion, (4) amortization, (5) all federal, state, local and
foreign income taxes, (6) transaction fees paid to the MDC Entities and/or
Dartford and/or Fenway in connection with acquisitions made after July 1, 1998,
so long as such transaction fees are paid in accordance with the terms of the
MDC Advisory Services Agreement, the Dartford Management Agreement and the
Fenway Advisory Agreement, (7) non-recurring charges incurred prior to December
31, 2000 related to the Lender's Bagels Business, with respect to relocation of
Company's assets from the West Haven, Connecticut facility and transition
related expenses in connection with the foregoing, but only to the extent that
such non-recurring charges, together with all expenditures excluded from
Consolidated Capital Expenditures under clause (iii)(a) of the definition of
Consolidated Fixed Charges do not exceed $7,500,000 in the aggregate, (8) non-
recurring charges incurred prior to June 30, 1999 with respect to relocation of
the Company's assets related to the Duncan Hines Business and transition related
expenses in connection therewith, but only to the extent that such non-recurring
charges, together with all expenditures excluded from Consolidated Capital
Expenditures under clause (iii)(b) of the definition of Consolidated Fixed
Charges do not exceed $15,000,000 in the aggregate, (9) manufacturing overhead
costs related to the Duncan Hines Transitional Supply Agreement not to exceed
$8,200,000 per year as long as the Duncan Hines Transitional Supply Agreement is
in effect, (10) costs related to the Lender's Bagels Transition Agreement not to
exceed $2,500,000 per year as long as the Lender's Bagels Transition Agreement
is in effect, (11) all other non-cash items reducing Consolidated Net Income and
(12) any extraordinary and unusual losses, minus (ii) the sum of the amounts for
-----
such period of (a) all other non-cash items increasing Consolidated Net Income,
plus (b) any extraordinary and unusual gains, all of the foregoing as determined
on a consolidated basis for Company and its Subsidiaries in conformity with GAAP
and calculated in accordance with subsection 7.6E, if applicable.
8
<PAGE>
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA, (b) to the extent deducted from Consolidated
EBITDA by virtue of clause (ii)(b) of the definition thereof, extraordinary and
unusual cash gains, and (c) the Consolidated Working Capital Adjustment minus
-----
(ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled cash repayments of Consolidated Total Debt (excluding
repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) expenditures made in connection with any
Permitted Acquisition pursuant to subsection 7.7(vi) (net of any proceeds of any
related financings with respect to such acquisitions), including without
limitation transaction fees paid in cash to the MDC Entities and/or Dartford
and/or Fenway in connection with such acquisitions, so long as such transaction
fees are paid in accordance with the terms of the MDC Advisory Services
Agreement, the Dartford Management Agreement and the Fenway Agreement, (d)
Consolidated Interest Expense, (e) to the extent added back to Consolidated
EBITDA by virtue of clause (i)(b)(12) of the definition thereof, extraordinary
and unusual cash losses, (f) to the extent added back to Consolidated EBITDA by
virtue of clauses (i)(b)(7) or (i)(b)(8) of the definition thereof, non-
recurring charges paid in cash, (g) to the extent added back to Consolidated
EBITDA by virtue of clause (i)(b)(9) of the definition thereof, manufacturing
overhead costs related to the Duncan Hines Transitional Supply Agreement, (h) to
the extent added back Consolidated EBITDA by virtue of clause (i)(b)(10) of the
definition thereof, costs related to the Lender's Bagels Transition Agreement
not to exceed $2,500,000, and (i) the provision for current taxes based on
income of Company and its Subsidiaries and payable in cash with respect to such
period.
"Consolidated Fixed Charges" means, for any period, an amount equal to the
sum of the amounts for such period of (i) scheduled amortization of Indebtedness
of Company and its Subsidiaries (as reduced by prepayments previously made), and
discount or premium relating to any such Indebtedness for such period, whether
expensed or capitalized, (ii) Consolidated Cash Interest Expense, (iii)
Consolidated Capital Expenditures (excluding (a) expenditures which would
otherwise be included in Consolidated Capital Expenditures incurred prior to
December 31, 2000 related to the Lender's Bagels Business, with respect to (1)
relocation of Company's assets and (2) transition related expenses in connection
with the foregoing, but only to the extent that such expenditures, together with
all non-recurring charges added back to Consolidated EBITDA by virtue of clause
(i)(b)(7) of the definition thereof, do not exceed $7,500,000 in the aggregate
and (b) expenditures which would otherwise be included in Consolidated Capital
Expenditures incurred prior to June 30, 1999 with respect to relocation of the
Company's assets related to the Duncan Hines Business and transition related
expenses in connection therewith, but only to the extent that such expenditures,
together with all non-recurring charges added back to Consolidated EBITDA by
virtue of clause (i)(b)(8) of the definition thereof, do not exceed $15,000,000
in the aggregate), and (iv) taxes actually paid in cash by Company or any of its
Subsidiaries.
9
<PAGE>
"Consolidated Interest Expense" means, for any period, the net interest
expense of Company and its Subsidiaries for such period (net of any interest
income of Company and its Subsidiaries during such period) as determined on a
consolidated basis in conformity with GAAP.
"Consolidated Net Income" means, for any period, the net income (or loss)
of Company and its Subsidiaries on a consolidated basis for such period taken as
a single accounting period determined in conformity with GAAP; provided that
--------
there shall be excluded (i) the income (or loss) of any Person in which any
other Person (other than Company or any of the Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid in cash to Company or any of its Subsidiaries by such Person
during such period and (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or the date such Person's assets are
acquired by Company or any of its Subsidiaries.
"Consolidated Total Debt" means, as at any date of determination, all
outstanding Indebtedness of Company and its Subsidiaries as determined on a
consolidated basis in conformity with GAAP.
"Consolidated Total Senior Debt" means, as at any date of determination,
all outstanding Indebtedness of Company and its Subsidiaries other than
Subordinated Indebtedness, as determined on a consolidated basis in conformity
with GAAP.
"Consolidated Working Capital" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Interest Rate Agreements. Contingent Obligations shall include, without
limitation, (a) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), comaking, discounting
with recourse or sale with recourse by such
10
<PAGE>
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (x) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (x) or (y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation" means, as applied to any Person, any provision of
any Security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"CSI" means Chase Securities Inc. and its successors and assigns,
including, without limitation, its successors by merger.
"Dartford" means Dartford Partnership L.L.C., a limited liability company
organized under the laws of the State of Delaware.
"Dartford Advisory Agreement" means that certain Advisory Agreement dated
as of April 8, 1998, by and between Company and Dartford, as in effect on the
Effective Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"Dartford Expense Agreement" means that certain Expense Agreement dated as
of July 1, 1998, by and between Company and Dartford, as in effect on the
Effective Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
11
<PAGE>
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Duncan Hines Acquisition" means the transactions contemplated by the
Duncan Hines Acquisition Agreement.
"Duncan Hines Acquisition Agreement" means that certain Asset Sale and
Purchase Agreement, dated as of November 26, 1997, by and between MBW LLC and
P&G, which agreement was assigned to the Company.
"Duncan Hines Assumption Agreement" means that certain Assumption Agreement
dated as of January 16, 1998, by and between P&G and Company.
"Duncan Hines Business" means the retail baking mix business purchased from
P&G pursuant to the Duncan Hines Acquisition Agreement.
"Duncan Hines Patent and Trademark Security Agreement" means that certain
Patent and Trademark Security Agreement dated as of January 16, 1998, by and
between Company and Chase, as in effect on the Effective Date and as such
agreement may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsections 7.12A.
"Duncan Hines Patent License Agreement" means that certain Patent License
Agreement dated as of January 16, 1998, by and between P&G and Company, as in
effect on the Effective Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"Duncan Hines Related Agreements" means the Duncan Hines Acquisition
Agreement, the Duncan Hines Assumption Agreement and the Duncan Hines Transition
Agreements.
"Duncan Hines Technology License Agreement" means the Technology
License Agreement dated as of January 16, 1998, by and between P&G and the
Company as in effect on the Effective Date and as such agreement may thereafter
be amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under Section 7.12A.
"Duncan Hines Transition Agreements" means, collectively, (i) the Duncan
Hines Transitional Supply Agreement, (ii) the Duncan Hines Transition Services
Agreement, (iii) the Duncan Hines Technology License Agreement and (iv) the
Duncan Hines Patent License Agreement.
"Duncan Hines Transition Services Agreement" means the Transitional
Services Agreement, dated as of January 16, 1998, by and between P&G and Company
as in effect on the Effective Date and as such agreement may thereafter be
amended, restated,
12
<PAGE>
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"Duncan Hines Transitional Supply Agreement" means the Transitional Supply
Agreement, dated as of January 16, 1998, by and between P&G and the Company as
in effect on the Effective Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"Effective Date" means the date (on or before November 15, 1999) on which
the conditions precedent set forth in subsection 4.1 shall be satisfied or
waived.
"Eligible Assignee" means (i) (a) a commercial bank organized under the
laws of the United States or any state thereof; (b) a commercial bank organized
under the laws of any other country or a political subdivision thereof; provided
--------
that (x) such bank is acting through a branch or agency located in the United
States or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; (c) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses including, but not
limited to, insurance companies, funds and lease financing companies; and (d)
any other financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and has
combined capital and surplus or net assets of at least $100,000,000, in each
case (under clauses (a) through (d) above) that is reasonably acceptable to
Administrative Agent; and (ii) any Lender, any Affiliate of any Lender, and any
Approved Fund; provided that no Affiliate of Company shall be an Eligible
--------
Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is subject to ERISA and which is maintained or
contributed to by Company or any of its ERISA Affiliates.
"Environmental Claim" means any written accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates that are directly or
indirectly controlled by Company, or any Facility.
13
<PAGE>
"Environmental Laws" means all laws, statutes, ordinances, orders, rules,
regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, public health and
safety, industrial hygiene or protection of wetlands, in any manner applicable
to Company or any of its Subsidiaries or any of their respective properties,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the Hazardous
-- ---
Materials Transportation Act (49 U.S.C. (S) 1801 et seq.,), the Resource
-- ---
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal Water
-- ---
Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42
-- ---
U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 2601
-- ---
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S)
- -- ---
136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
-- --- --
seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. (S)
- ---
11001 et seq.), each as amended or supplemented, and any analogous future or
-- ---
present local, state and federal statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"Equity Proceeds" means the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) from the
issuance of any equity Securities of Company after July 1, 1998.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
solely for purposes of obligations under Section 412 of the Internal Revenue
Code or under the applicable sections set forth in Section 414(t)(2) of the
Internal Revenue Code, any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event" within the meaning of Section
4043(c) of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation or with respect to which no penalty will be
assessed by the PBGC for failure to satisfy such notice requirements); (ii) the
failure to meet the minimum funding standard of Section 412 of the Internal
Revenue Code with respect to any Pension Plan
14
<PAGE>
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company or any of its ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting, in
either case, in liability pursuant to Section 4063 or 4064 of ERISA,
respectively; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan pursuant to Section 4042 of ERISA; (vi) the imposition of liability
on Company or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by Company or any of its ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan resulting in withdrawal liability pursuant to Section 4201 of
ERISA, or the receipt by Company or any of its ERISA Affiliates of written
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4042 of ERISA or under Section 4041A of ERISA if
such termination would result in liability to Company or any of its ERISA
Affiliates; (viii) the imposition on Company or any of its ERISA Affiliates of
fines, penalties or taxes under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates determined by
reference to the Adjusted Eurodollar Rate as provided in subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Existing Credit Agreement" has the meaning assigned to that term in the
Recitals to this Agreement.
"Existing Lenders" has the meaning assigned to that term in the Recitals to
this Agreement.
15
<PAGE>
"Existing Subordinated Note Documents" means the Existing Subordinated Note
Indentures, the Existing Subordinated Notes and each other document executed in
connection with the Existing Subordinated Notes, as each such document may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 7.12B.
"Existing Subordinated Note Indentures" means the indentures pursuant to
which the Existing Subordinated Notes are issued, in a form delivered to Agents
and Lenders on or prior to the Effective Date, with such changes thereto as are
permitted under subsection 7.12B and as such indentures may thereafter be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 7.12B.
"Existing Subordinated Notes" means (a) the 9-7/8% Series B Senior
Subordinated Notes of Company due 2007 issued on February 10, 1997, (b) the 9-
7/8% Series D Senior Subordinated Notes of the Company due 2007 issued on July
1, 1997 and (c) the 8-3/4% Senior Subordinated Notes of the Company due 2008
issued on July 1, 1998 pursuant to the Existing Subordinated Note Indentures in
the form delivered to Agents and Lenders on or prior to the Effective Date with
such changes thereto as are permitted under subsection 7.12B and as such notes
may thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12B.
"Existing Term Loan Facilities" has the meaning assigned to that term in
the Recitals to this Agreement.
"Existing Tranche B Term Loan Commitment" means the commitment of a Lender
to make an Existing Tranche B Term Loan to Company pursuant to subsection
2.1A(ii), and "Existing Tranche B Term Loan Commitments" means such commitments
of all Lenders in the aggregate.
"Existing Tranche B Term Loan Exposure" means, with respect to any Lender as
of any date of determination (i) prior to the funding of the Existing Tranche B
Term Loans, that Lender's Existing Tranche B Term Loan Commitment and (ii) after
the funding of the Existing Tranche B Term Loans, the outstanding principal
amount of the Existing Tranche B Term Loan of that Lender.
"Existing Tranche B Term Loans" means the Loans made by the Lenders to the
Company pursuant to subsection 2.1A(ii).
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Company or any of its
Subsidiaries (but only as to portions of buildings actually leased or used) or
any of their respective predecessors or any of their respective Affiliates that
are directly or indirectly controlled by Company.
16
<PAGE>
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Fenway" means Fenway Partners Capital Fund, L.P., a Delaware limited
partnership.
"Fenway Advisory Agreement" means that certain Advisory Agreement dated as
of April 8, 1998, by and between Company and Fenway, as in effect on the
Effective Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"FFDC Act" means the Federal Food, Drug and Cosmetic Act, as amended from
time to time, and any successor statute.
"First Priority" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that (i) such Lien has
priority over any other Lien on such Collateral and (ii) such Lien is the only
Lien (other than Permitted Encumbrances and Liens permitted pursuant to
subsection 7.2A) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries ending
on December 31 of each calendar year.
"Fixed Charge Component" has the meaning assigned to that term in
subsection 7.6E(i).
"Flavor Supply Agreement" means that certain Flavor Supply Agreement dated
as of December 31, 1996, by and between Company and Quest, as in effect on the
Effective Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12A.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Funding and Payment Office" means the office of Administrative Agent and
Swing Line Lender located at One Chase Manhattan Plaza, 8th Floor, New York, New
17
<PAGE>
York 10081 or such offices of Administrative Agent or any successor
Administrative Agent specified by Administrative Agent or such successor
Administrative Agent in a written notice to Loan Parties and Lenders.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination and specifically, terms used herein applicable to
Company and its Subsidiaries defined by reference to GAAP shall give effect to
the subtraction of minority interests.
"Gilster Co-Pack Agreement" means the Production Agreement, dated as of
June 4, 1998, by and between the Company and Gilster-Mary Lee Corporation, as in
effect on the Effective Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"Governmental Acts" has the meaning assigned to that term in subsection
3.5.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Guaranty" means, individually, each of the Subsidiary Guaranty and any
other guaranty of the Obligations, and "Guaranties" means the Subsidiary
Guaranty and each other guaranty of the Obligations, collectively.
"Guarantors" means the Subsidiary Guarantors.
"Hazardous Materials" means (i) any chemical, material or substance defined
as or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted hazardous
waste", "infectious waste", "toxic substances" or any other formulations
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity," or "EP toxicity" or words of
similar import under any applicable Environmental Laws; (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii)
18
<PAGE>
urea formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority.
"Immaterial Subsidiaries" means, with respect to any Person, any Subsidiary
or Subsidiaries of such Person the assets of which constitute, individually or
in the aggregate, less than 5% of the total assets of such Person and its
Subsidiaries.
"Indebtedness" means, as applied to any Person, (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money (other than accounts
payable incurred in the ordinary course of business and accrued expenses
incurred in the ordinary course of business), (iv) any obligation owed for all
or any part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA), which purchase price is (a) due more
than six months from the date of incurrence of the obligation in respect thereof
or (b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements constitute Contingent Obligations and
not Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Initial Public Offering" has the meaning assigned to that term in the
Recitals to this Agreement.
"Insurance Proceeds" has the meaning assigned to that term in subsection
2.4B(iii)(d).
"Intellectual Property" means collectively the MBW Intellectual Property,
the Log Cabin Intellectual Property, the Duncan Hines Intellectual Property, the
Van de Kamp's Intellectual Property, the Sea Coast Intellectual Property and the
Lender's Bagels Intellectual Property, each as defined in subsections 5.5B,
5.5C, 5.5D, 5.5E, 5.5F and 5.5G, respectively.
"Interest Payment Date" means (i) with respect to any Base Rate Loan, the
last Business Day of each March, June, September and December of each year and
(ii) with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months,
19
<PAGE>
"Interest Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to hedge Company or any of its Subsidiaries against
fluctuations in interest rates.
"Interest Rate Determination Date" means each date for calculating the
Adjusted Eurodollar Rate, for purposes of determining the interest rate in
respect of an Interest Period. The Interest Rate Determination Date in respect
of calculating the Adjusted Eurodollar Rate shall be the second Business Day
prior to the first day of the related Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Company or any of its Subsidiaries of, or of a beneficial interest in, stock
or other Securities of any other Person (other than a Person that, prior to such
purchase or acquisition, was a Wholly Owned Subsidiary of Company), or (ii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person other than a Wholly Owned Subsidiary of
Company, including all Indebtedness and accounts receivable acquired from that
other Person that are not current assets or did not arise from sales to that
other Person in the ordinary course of business; provided, however, that the
-------- -------
term "Investment" shall not include (a) current trade and customer accounts
receivable for goods furnished or services rendered in the ordinary course of
business and payable in accordance with customary trade terms, (b) advances and
prepayments to suppliers for goods and services in the ordinary course of
business, (c) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to Company or
any of its Subsidiaries or as security for any such Indebtedness or claims, (d)
Cash held in Deposit Accounts with banks and trust companies (other than
Lenders) not exceeding $5,000,000 in aggregate amount, (e) Cash held in any
Deposit Account with a Lender and (f) shares in a mutual fund that invests
solely in Cash Equivalents. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
20
<PAGE>
"IP Collateral" means the Collateral under the Patent and Trademark
Security Agreement, the Log Cabin Patent and Trademark Security Agreement, the
Duncan Hines Patent and Trademark Security Agreement, the Van de Kamp's Patent
and Trademark Security Agreement, the Sea Coast Patent and Trademark Security
Agreement and the Lender's Bagels Patent and Trademark Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the Lender
which agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
--------
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Kraft" means Kraft Foods, Inc., a Delaware corporation.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that without any further consent of such lessor or any further action
on the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Administrative Agent notice of such default and
at least 30 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) to the matters contained in a Collateral
Access Agreement, and (iv) to such other matters relating to such Leasehold
Property as Administrative Agent may reasonably request.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and listed
on the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires, provided that
--------
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
21
<PAGE>
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any Loans (including any Revolving
Loans made to pay Refunded Swing Line Loans or to reimburse drawings under
Letters of Credit) in accordance with subsection 2.1A(v) or its portion of any
unreimbursed drawing or payment under a Letter of Credit in accordance with
subsection 3.3C or (ii) a Lender having notified Company and/or Administrative
Agent in writing that it does not intend to comply with its obligations under
subsection 2.1 or subsections 3.1C, 3.3B or 3.3C.
"Lender's Bagels Acquisition" means the acquisition of the Lender's Bagels
Business pursuant to the terms of the Lender's Bagels Acquisition Agreement.
"Lender's Bagels Acquisition Agreement" means that certain Asset Purchase
Agreement, dated as of September 24, 1999, by and between The Eggo Company and
Company.
"Lender's Bagels Business" means the assets of the business conducted by
The Eggo Company and its affiliates relating to the manufacture, packaging,
marketing, distribution and/or sale of frozen, refrigerated and fresh bagels in
the United States and Canada.
"Lender's Bagels Patent and Trademark Security Agreement" means the Patent
and Trademark Security Agreement entered into by and among Company, the
Subsidiary Guarantors and Administrative Agent dated as of the Effective Date,
as such Lender's Bagels Patent and Trademark Security Agreement may thereafter
be amended, restated, supplemented or otherwise modified from time to time.
"Lender's Bagels Transition Agreement" means the Transition Services
Agreement, dated as of November 1, 1999, by and between The Eggo Company and
Company, as in effect on the Effective Date and as such agreement may thereafter
by amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Lending Office" means, as to any Lender, the office or offices of such
Lender specified as the "Lending Office" on Schedule 2.1, or such other office
------------
or offices as such Lender may from time to time notify Company and
Administrative Agent.
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding (whether or
not the conditions to drawing thereunder have been met) plus (ii) the aggregate
----
amount of all drawings under
22
<PAGE>
Letters of Credit honored by Issuing Lenders and not theretofore reimbursed by
Company (including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"Leverage Ratio" means, as of any date of determination, the ratio of
Consolidated Total Debt, as of the date of determination, to Consolidated
EBITDA, for the twelve-month period ending on the date of determination, in each
case calculated for Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
fixed or floating charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means, as the context requires, one or more of the Term
Loans, Revolving Loans and Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by Company in favor of an Issuing Lender relating to, the
Letters of Credit), the Subsidiary Guaranty, the Collateral Documents and any
Interest Rate Agreement entered into by Company with a Lender or an Affiliate of
any Lender.
"Loan Party" means, individually, each of Company and any Subsidiary
Guarantor, and "Loan Parties" means Company and each Subsidiary Guarantor,
collectively.
"Log Cabin Acquisition" means the acquisition of the Log Cabin Business
pursuant to the terms of the Log Cabin Acquisition Agreement.
"Log Cabin Acquisition Agreement" means that certain Asset Purchase
Agreement dated as of May 7, 1997 between the Company and Kraft.
"Log Cabin Assumption Agreement" means that certain Assumption Agreement
dated as of July 1, 1997, by and between Kraft and Company.
"Log Cabin Business" means the assets of the retail syrup business marketed
under the Log Cabin and Country Kitchen trademarks and the foodservice business
marketed under the Log Cabin, Log Cabin Lite and Wigwam trademarks and under
private label arrangements.
"Log Cabin Patent and Trademark Security Agreement" means the Log Cabin
Patent and Trademark Security Agreement entered into by and among Company, the
Subsidiary Guarantors and the Administrative Agent dated as of July 1, 1997 as
in effect
23
<PAGE>
on the Effective Date, as such Log Cabin Patent and Trademark Security Agreement
may thereafter be amended, restated, supplemented or otherwise modified from
time to time.
"Log Cabin Patent License Agreement" means that certain Patent and Know-How
License Agreement dated as of July 1, 1997, by and between Kraft and Company, as
in effect on the Effective Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"Log Cabin Transition Agreements" means the Log Cabin Patent License
Agreement.
"Management Fees" means the fees payable by Company pursuant to the MDC
Advisory Agreement, the Dartford Advisory Agreement and the Fenway Advisory
Agreement.
"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries, taken as a whole, (ii) the material
impairment of the ability of any Loan Party to perform the Obligations and (iii)
a material adverse effect upon the legality, validity, binding effect or
enforceability against a Loan Party of a Loan Document to which it is a party.
"Material Contract" means any of the Employment Agreements or any other
contract or other arrangement to which Company or any of its Subsidiaries is a
party (other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could have a Material Adverse Effect.
"Maximum Consolidated Capital Expenditures Amount" has the meaning assigned
to that term in subsection 7.6D.
"MBW LLC" means MBW Investors LLC, a Delaware limited liability company.
"MDC Advisory Agreement" means that certain Advisory Agreement dated as of
April 8, 1998, by and between Company and MDC Management Company III, L.P., as
in effect on the Effective Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"MDC Entities" means McCown De Leeuw & Co. III, L.P., a California limited
partnership, McCown De Leeuw & Co. Offshore (Europe) III, L.P., a Bermuda
limited partnership, McCown De Leeuw & Co. III (Asia), L.P., a Bermuda limited
partnership,
24
<PAGE>
Gamma Fund LLC, a California limited liability company, McCown De Leeuw & Co.
IV, L.P., a California limited partnership, McCown De Leeuw & Co. IV Associates,
L.P., a California limited partnership, and Delta Fund LLC, a California limited
liability company.
"Mortgage" means any mortgage or legal charge (whether designated as a deed
of trust or a mortgage or by any similar title) granted by Company or any of its
Subsidiaries (or, at Administrative Agent's option, an amendment to an existing
Mortgage, in form satisfactory to Administrative Agent, adding such Mortgaged
Property to the Real Property Assets encumbered by an existing Mortgage) in any
Real Property Asset to secure the Obligations, as such mortgage or legal charge
may be amended, restated, supplemented or otherwise modified from time to time
substantially in the form of Exhibit XXII annexed hereto, and "Mortgages" means
------------
all such instruments collectively.
"Mortgage Policy" has the meaning assigned to that term in subsection
6.10B(iv).
"Mortgaged Property" has the meaning assigned to that term in subsection
6.10B.
"Multiemployer Plan" means a Amultiemployer plan", as defined in Section
4001(a)(3) of ERISA which is subject to Title IV of ERISA, to which Company or
any of its ERISA Affiliates is contributing or to which Company or any of its
ERISA Affiliates has an obligation to contribute.
"NatWest" means National Westminster Bank PLC and its successors,
including, without limitation, its successors by merger.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash Proceeds of
such Asset Sale net of bona fide direct costs of sale including, without
limitation, (i) income taxes reasonably estimated to be actually payable as a
result of such Asset Sale within one year of the date of receipt of such Cash
Proceeds, (ii) transfer, sales, use and other taxes payable in connection with
such Asset Sale, (iii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans) that
is secured by a Lien on the stock or assets in question and that is required to
be repaid under the terms thereof as a result of such Asset Sale, and (iv)
broker's commissions and reasonable fees and expenses of counsel, accountants
and other professional advisors in connection with such Asset Sale.
"New Lender" means any Lender which is a party to this Agreement on the
Effective Date which is not an Existing Lender.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Non-US Lenders" has the meaning assigned to that term in subsection
2.7B(iii).
25
<PAGE>
"Notes" means one or more of the Tranche A Term Notes, Tranche B Term
Notes, Revolving Notes or Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice in the form of Exhibit I annexed
---------
hereto delivered by Company to Administrative Agent pursuant to subsection 2.1B
with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in the
form of Exhibit II annexed hereto delivered by Company to Administrative Agent
----------
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the form of
Exhibit III annexed hereto delivered by Company to Administrative Agent pursuant
- -----------
to subsection 3.1B(i) with respect to the proposed issuance of a Letter of
Credit.
"Obligations" means all obligations of every nature of each Loan Party from
time to time owed to Agents, Lenders or any of them under the Loan Documents,
whether for principal, interest, reimbursement of amounts drawn under Letters of
Credit or payments for early termination of Interest Rate Agreements, fees,
expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a certificate
executed on behalf of such corporation by its chairman of the board (if an
officer), its president, its chief financial officer or a vice president;
provided that every Officer's Certificate with respect to the compliance with a
- --------
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer making or giving such Officer's Certificate has read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the signer
he or she has made or has caused to be made such examination or investigation as
is necessary to enable him or her to express an informed opinion as to whether
or not such condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signer, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"P&G" means The Procter & Gamble Company, an Ohio corporation.
"Patent and Trademark Security Agreement" means the Patent and Trademark
Security Agreement entered into by and among Company, the Subsidiary Guarantors
and Administrative Agent dated as of the Closing Date, as such Patent and
Trademark
26
<PAGE>
Security Agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Patent License Agreement" means that certain Patent License Agreement
dated as of December 31, 1996, by and among Seller, Unilever PLC and Company, as
in effect on the Closing Date and as such agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Title IV of ERISA.
"Permitted Acquisition" means an acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(vi).
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA) incurred in the ordinary course
of business for sums not yet delinquent or being contested in good faith,
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries;
27
<PAGE>
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under
any Capital Lease permitted by subsection 7.1(iii) or any Operating Lease
not prohibited by this Agreement, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with
the importation of goods;
(x) deposits in the ordinary course of business to secure
liabilities to insurance carriers, lessors, utilities and other service
providers; and
(xi) bankers liens and rights of setoff with respect to
customary depository arrangements entered into in the ordinary course of
business.
"Permitted Seller Note" means a promissory note substantially in the form
of Exhibit XVIII annexed hereto representing any Indebtedness of Company
-------------
incurred in connection with any Permitted Acquisition payable to the seller in
connection therewith, as such note may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under subsection
7.12B; provided that no Permitted Seller Note
--------
shall (i) be guarantied by any Subsidiary of Company or secured by any property
of Company or any of its Subsidiaries or (ii) bear cash interest at a rate in
excess of 12% per annum; and provided further, that no Permitted Seller Note
-------- -------
shall provide for any prepayment or repayment of all or any portion of the
principal thereof prior to the date of the final scheduled installment of
principal of any of the Loans.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Pledge Agreement" means that certain Fifth Amended and Restated Pledge
Agreement by and among Company, the Subsidiary Guarantors and Administrative
Agent dated as of the Effective Date and substantially in the form of Exhibit X
---------
annexed
28
<PAGE>
hereto, as such Pledge Agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"Pledged Collateral" means the "Pledged Collateral" as defined in the
Pledge Agreement.
"Potential Event of Default" means a condition or event that, after notice
or after any applicable grace period has lapsed, or both, would constitute an
Event of Default.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by Chase as its prime commercial lending rate in effect at its
principal office in New York City. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. Chase or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"Proceedings" has the meaning assigned to that term in subsection 6.1(x).
"Pro Forma Calculation Period" has the meaning assigned to that term in
subsection 7.6E(i).
"Pro Rata Share" means with respect to each Lender, the Revolving Loan Pro
Rata Share, Tranche A Term Loan Pro Rata Share and Tranche B Term Loan Pro Rata
Share of such Lender; in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1. The initial Pro
Rata Share of each Lender is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
- ------------
"PTO" means the United States Patent and Trademark Office or any successor
or substitute office in which filings are necessary or, in the opinion of
Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Pure Food and Drug Laws" means the FFDC Act and the pure food and drug
laws of each of the states of the United States into which products of the
Business, the Log Cabin Business and the Duncan Hines Business are or have been
shipped.
"Quest" means Quest International Flavors & Food Ingredients Company.
"Quest Agreements" means, collectively, (i) that certain Flavor Escrow
Agreement dated as of December 31, 1996, by and among Quest, the escrow agent
named therein and Company, as in effect on the Closing Date and as such
agreement may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12A, and
(ii) the Flavor Supply Agreement.
"Real Property Asset" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
29
<PAGE>
"Recorded Leasehold Interest" means a Leasehold Property with respect to
which a Record Document (as hereinafter defined) has been recorded in all places
necessary or desirable, in Administrative Agent's reasonable judgment, to give
constructive notice of such Leasehold Property to third-party purchasers and
encumbrances of the affected real property. For purposes of this definition, the
term "Record Document" means, with respect to any Leasehold Property, (a) the
lease evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (b) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"Red Wing" means The Red Wing Company, Inc., a Delaware corporation.
"Red Wing Co-Pack Agreement" means each of the First Amended and Restated
Production Agreement, dated as of November 19, 1997, by and between Red Wing and
Company and the Production Agreement, dated as of November 19, 1997, by and
between Red Wing and the Company (collectively, the "Red Wing Co-Pack
Agreements") as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from time to
time to the extent permitted under subsection 7.12A.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(v).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulatory Shares" means, with respect to any Person, shares of such
Person required to be issued as qualifying shares to directors or persons
similarly situated or shares issued to Persons other than Company or a Wholly
Owned Subsidiary of Company in response to regulatory requirements of foreign
jurisdictions pursuant to a resolution of the Board of Directors of such Person,
so long as such shares do not exceed one percent of the total outstanding shares
of equity such Person and any owners of such shares irrevocably covenant with
Company to remit to Company or waive any dividends or distributions paid or
payable in respect of such shares.
"Reimbursement Date" has the meaning assigned to that term in subsection
3.3B.
"Related Agreements" means the Subordinated Note Indentures, the
Subordinated Notes, the other Subordinated Note Documents, the Acquisition
Agreement, the Log Cabin Acquisition Agreement, the Duncan Hines Acquisition
Agreement, the Sea Coast
30
<PAGE>
Acquisition Agreement, the Assumption Agreement, the Log Cabin Assumption
Agreement, the Duncan Hines Assumption Agreement, the Lender's Bagels
Acquisition Agreement, the MDC Advisory Agreement, the Dartford Advisory
Agreement, the Fenway Advisory Agreement, the Transition Agreements, the
Log Cabin Transition Agreements, the Red Wing Co-Pack Agreements, the
Dartford Expense Agreement, the Gilster Co-Pack Agreement and the Duncan
Hines Transition Agreements and the Lender's Bagels Transition Agreement.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing
any Hazardous Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Requisite Lenders" means Non-Defaulting Lenders having or holding not
less than 51% of the sum of the aggregate Term Loan Exposure of all Non-
Defaulting Lenders plus the aggregate Revolving Loan Exposure of all Non-
----
Defaulting Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii)
any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class
of stock of Company now or hereafter outstanding other than stock
repurchases for Company's 1998 Employee Stock Purchase Program, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock
of Company now or hereafter outstanding, and (iv) any payment or prepayment
of principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iv) and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means June 30, 2005 or
any earlier date of termination of the Revolving Loan Commitments pursuant
to this Agreement.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the
31
<PAGE>
Revolving Loans of that Lender plus (b) in the event that Lender is an
----
Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (net of any participations
purchased by other Lenders in such Letters of Credit) plus (c) the
----
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any
Letters of Credit plus (d) the aggregate amount of all participations
----
purchased by that Lender in any outstanding Swing Line Loans plus (e) in
----
the case of Swing Line Lender, the sum of the aggregate outstanding
principal amount of all Swing Line Loans (in each case net of any
participations therein purchased by other Lenders).
"Revolving Loan Pro Rata Share" means with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or
Lender or any participations purchased by any Lender therein or in any
Swing Line Loans, the percentage obtained by dividing (i) the Revolving
--------
Loan Exposure of that Lender by (ii) the aggregate Revolving Loan Exposure
--
of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1.
"Revolving Loans" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(iv).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(d) on July 1, 1998 and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitment
and Revolving Loans of any Lender, in each case substantially in the form
of Exhibit VII annexed hereto, as they may be amended, restated,
-----------
supplemented or otherwise modified from time to time.
"S&P" means Standard & Poor's Ratings Service, or any successor
thereto.
"Sea Coast" means Sea Coast Foods, Inc., a Washington corporation.
"Sea Coast Acquisition" means the acquisition of all the capital stock
of Sea Coast pursuant to terms of the Sea Coast Acquisition Agreement, for
a purchase price, excluding fees and expenses, not to exceed $50,000,000,
plus an "earn out" payment as described in the Sea Coast Acquisition
Agreement.
"Sea Coast Acquisition Agreement" means that certain Stock Purchase
Agreement dated as of March 10, 1999 between the Company, Sea Coast,
Galando Investments Limited Partnership, Carey-On Limited Partnership,
Joseph A. Galando, Barbara J. Galando, Stanley J. Carey and Mary K. Carey.
"Sea Coast Patent and Trademark Security Agreement" means the Sea
Coast Patent and Trademark Security Agreement entered into by and among
Company, the Subsidiary Guarantors and the Administrative Agent dated as of
March 31, 1999, as in
32
<PAGE>
effect on the Effective Date, as such Sea Coast Patent and Trademark
Security Agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" means the Fifth Amended and Restated Security
Agreement entered into by and among Company, the Subsidiary Guarantors and
Administrative Agent dated as of the Effective Date and substantially in
the form of Exhibit XI annexed hereto, as such Security Agreement may be
----------
amended, restated, supplemented or otherwise modified from time to time.
"Seller" means Conopco, Inc., a New York corporation, doing business
as Van den Bergh Foods Company.
"Senior Leverage Ratio" means, as of any date of determination, the
ratio of Consolidated Total Senior Debt, as of the date of determination,
to Consolidated EBITDA, for the twelve-month period ending on the date of
determination, in each case calculated for Company and its Subsidiaries on
a consolidated basis in accordance with GAAP.
"Shared Technology License Agreement" means that certain Shared
Technology License Agreement dated as of December 31, 1996, by and between
Seller and Company, as in effect on the Effective Date and as such
agreement may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12A
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's then
existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and
(c) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts
33
<PAGE>
as they become due; and (ii) such Person is "solvent" within the meaning
given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Company or any of its Subsidiaries, (ii) the
obligations of third party insurers of Company or any of its Subsidiaries
arising virtue of the laws of any jurisdiction requiring third party
insurers, (iii) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (iv) such other obligations of Company and its
Subsidiaries as may be reasonably acceptable to Administrative Agent;
provided that Standby Letters of Credit may not be issued for the purpose
--------
of supporting (a) trade payables or (b) Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy
Code).
"Subordinated Note Documents" means collectively the Existing
Subordinated Note Documents.
"Subordinated Note Indentures" means collectively the Existing
Subordinated Note Indentures.
"Subordinated Notes" means collectively the Existing Subordinated
Notes.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
under the Subordinated Note Documents, (ii) any Indebtedness permitted
under subsection 7.1(vi), (iii) the Indebtedness of Company evidenced by
any Permitted Seller Notes, and (iv) any other Indebtedness of Company or
any of its Subsidiaries subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to Administrative Agent and
Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
34
<PAGE>
"Subsidiary Guarantor" means Sea Coast and any Subsidiary of Company
that becomes party to the Subsidiary Guaranty at any time after the
Effective Date pursuant to subsection 6.9.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty,
substantially in the form of Exhibit IX annexed hereto, executed and
----------
delivered by Sea Coast on March 31, 1999 and to be executed and delivered
by each Subsidiary Guarantor from time to time pursuant to subsection 6.9,
as such Subsidiary Guaranty may be amended, restated, supplemented or
otherwise modified from time to time.
"Subsidiary Security Agreements" has the meaning assigned to that term
in subsection 6.9.
"Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 9.1B.
"Swing Line Lender" means Chase, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(v).
"Swing Line Loans" means the Loans made by Swing Line Lender pursuant
to subsection 2.1A(v).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) on July 1, 1998 and (ii) any promissory
note issued by Company to any successor Administrative Agent and Swing Line
Lender pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit VIII annexed hereto, as it may be
------------
amended, restated, supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "Tax on the overall net income" of a Person
--------
shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person's principal office (and/or, in the case of a Lender, its
relevant Lending Office) is located or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of that
Person (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
35
<PAGE>
"Term Loan Commitment" means the aggregate commitment of a Lender to
make Tranche A Term Loans, Existing Tranche B Term Loans and Additional
Tranche B Term Loans to Company pursuant to subsections 2.1A(i), 2.1A(ii)
and 2.1A(iii), respectively, and "Term Loan Commitments" means such
commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the Term Loans, that Lender's
Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
"Term Loans" means the Tranche A Term Loans, Existing Tranche B Term
Loans and Additional Tranche B Term Loans made by Lenders to Company
pursuant to subsection 2.1A(i), 2.1A(ii) and 2.1A(iii), respectively.
"Term Notes" means one or more of the Tranche A Term Notes and Tranche
B Term Notes or any combination thereof.
"Tiger" means Gloriande (Luxembourg) SarL, a corporation organized
under the laws of Luxembourg and an affiliate of Tiger Oats.
"Title Company" means one or more title insurance companies reasonably
satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and
"Tranche A Term Loan Commitments" means such commitments of all Lenders in
the aggregate.
"Tranche A Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche A Term
Loans, that Lender's Tranche A Term Loan Commitment and (ii) after the
funding of the Tranche A Term Loans, the outstanding principal amount of
the Tranche A Term Loan of that Lender.
"Tranche A Term Loan Pro Rata Share" means with respect to all
payments, computations and other matters relating to the Tranche A Term
Loan Commitment or the Tranche A Term Loan of any Lender, the percentage
obtained by dividing (i) the Tranche A Term Loan Exposure of that Lender by
-------- --
(ii) the aggregate Tranche A Term Loan
36
<PAGE>
Exposure of all Lenders, in any such case as the applicable percentage may
be adjusted by assignments permitted pursuant to subsection 10.1.
"Tranche A Term Loans" means the Loans made by the Lenders to the
Company pursuant to subsection 2.1A(i).
"Tranche A Term Notes" means (i) any promissory notes of Company
issued pursuant to subsection 2.1E(i)(a) on July 1, 1998 and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Tranche A Term
Loan Commitments or Tranche A Term Loans of any Lenders, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be
----------
amended, restated, supplemented or otherwise modified from time to time.
"Tranche B Term Loan Commitment" means, collectively, the Existing
Tranche B Term Loan Commitments and the Additional Tranche B Term Loan
Commitments.
"Tranche B Term Loan Exposure" means, with respect to any Lender, the
Existing Tranche B Term Loan Exposure of such Lender plus the Additional
Tranche B Term Loan Exposure of such Lender.
"Tranche B Term Loan Pro Rata Share" means with respect to all
payments, computations and other matters relating to the Tranche B Term
Loan Commitment or the Tranche B Term Loan of any Lender, the percentage
obtained by dividing (i) the Tranche B Term Loan Exposure of that Lender by
-------- --
(ii) the aggregate Tranche B Term Loan Exposure of all Lenders, in any such
case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1.
"Tranche B Term Loans" means, collectively, the Existing Tranche B
Term Loans and the Additional Tranche B Term Loans.
"Tranche B Term Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i)(b) and (ii) any promissory notes
issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Tranche B Term Loan Commitments or
Tranche B Term Loans of any Lenders, in each case substantially in the form
of Exhibit V annexed hereto, as they may be amended, restated, supplemented
---------
or otherwise modified from time to time.
"Transition Agreements" means, collectively, (i) that certain License
Agreement dated as of December 31, 1996, by and between Seller and Company,
as in effect on the Closing Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A; (ii) the Shared Technology
License Agreement; (iii) the Patent License Agreement; and (iv) the Quest
Agreements.
"UBS" means UBS Capital LLC, a New York limited liability company.
37
<PAGE>
"UBS AG" means UBS AG, Stamford Branch and its successors, including,
without limitation, any successors by merger.
"Unfunded Current Liability" means, with respect to any Pension Plan,
the amount, if any, by which the actuarial present value of the accumulated
plan benefits under such Pension Plan as of the close of its most recent
plan year exceeds the fair market value of the assets allocable thereto,
each determined in accordance with Statement of Financial Accounting
Standards No. 35, based upon the actuarial assumptions used by such Pension
Plan's actuary in the most recent annual valuation of such Pension Plan.
"Van de Kamp's" means Van de Kamp's, Inc., a Delaware corporation.
"Van de Kamp's Patent and Trademark Security Agreement" means the Van
de Kamp's Patent and Trademark Security Agreement entered into by and among
Company, the Subsidiary Guarantors and the Administrative Agent dated as of
July 1, 1998, as such Van de Kamp's Patent and Trademark Security Agreement
may thereafter be amended, restated, supplemented or otherwise modified
from time to time.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than Regulatory Shares) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person or by such Person and one or more Wholly Owned Subsidiaries of
such Person.
1.2 Accounting Terms Utilization of GAAP for Purposes of
Calculations Under Agreement.
----------------------------------------------------
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP
(except, with respect to interim financial statements, normal year end audit
adjustments and the absence of explanatory footnotes) as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 6.1(v)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3A.
38
<PAGE>
1.3 Other Definitional Provisions.
-----------------------------
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes", "including" and similar terms used in any Loan
Document shall be construed as if followed by the words "without limitation".
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
------------------
A. Commitments. Subject to the terms and conditions of this
-----------
Agreement and in reliance upon the representations and warranties of Loan
Parties set forth herein and in the other Loan Documents, each Lender hereby
severally agrees to make the applicable Loans described in subsections 2.1A(i),
2.1A(ii), 2.1A(iii) and 2.1A(iv) and Swing Line Lender hereby agrees to make the
Swing Line Loans as described in subsection 2.1A(v).
(i) Tranche A Term Loans. Each Lender with a Tranche A Term
--------------------
Loan Commitment severally agrees to lend to Company on July 1, 1998 an amount
not exceeding its Pro Rata Share of the aggregate amount of the Tranche A Term
Loan Commitments. The amount of each Lender's Tranche A Term Loan Commitment is
set forth opposite its name on Schedule 2.1 annexed hereto and the aggregate
------------
amount of the Tranche A Term Loan Commitments is $225,000,000; provided that the
--------
Tranche A Term Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Tranche A Term Loan Commitments pursuant to subsection
10.1B. Company may make only one borrowing under the Tranche A Term Loan
Commitments. Amounts borrowed under this subsection 2.1A(i) and subsequently
repaid or prepaid may not be reborrowed.
(ii) Existing Tranche B Term Loans. Each Lender with an
-----------------------------
Existing Tranche B Term Loan Commitment severally agrees to lend to Company on
March 31, 1999 an amount not exceeding its Pro Rata Share of the aggregate
amount of the Existing Tranche B Term Loan Commitments. The amount of each
Lender's Existing Tranche B Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the Tranche B Term
------------
Loan Commitments is $100,000,000; provided that the Existing Tranche B Term Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Existing Tranche B Term Loan Commitments pursuant to subsection 10.1B.
Company may make only one borrowing under the Existing Tranche B Term Loan
Commitments. Amounts borrowed under this subsection 2.1A(ii) and subsequently
repaid or prepaid may not be reborrowed.
(iii) Additional Tranche B Term Loans. Each Lender with an
-------------------------------
Additional Tranche B Term Loan Commitment severally agrees to lend to Company on
the Effective Date an amount not exceeding its Pro Rata Share of the aggregate
amount of the Additional Tranche B Term Loan Commitments to be used for the
purposes identified in
39
<PAGE>
subsection 2.5A. The amount of each Lender's Additional Tranche B Term Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto and the
------------
aggregate amount of the Additional Tranche B Term Loan Commitments is
$275,000,000; provided that the Additional Tranche B Term Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Additional Tranche B Term Loan Commitments pursuant to subsection 10.1B.
Company may make only one borrowing under the Additional Tranche B Term Loan
Commitments. Amounts borrowed under this subsection 2.1A(iii) and subsequently
repaid or prepaid may not be reborrowed. From and after the Effective Date, the
Existing Tranche B Term Loans and the Additional Tranche B Term Loans of each
Lender shall be treated as one Tranche B Term Loan for purposes of this
Agreement.
(iv) Revolving Loans. Each Lender with a Revolving Loan
---------------
Commitment severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Revolving Loans permitted to be outstanding
from time to time, to maintain such existing Revolving Loans and to lend to
Company from time to time during the period from July 1, 1998 to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount which shall
not exceed its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments, to be used for the purposes identified in subsection 2.5B. The
original amount of each Lender's Revolving Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate original amount of the
------------
Revolving Loan Commitments is $175,000,000; provided that the Revolving Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Revolving Loan Commitments pursuant to subsection 10.1B; provided further,
-------- -------
that the amount of the Revolving Loan Commitments shall be reduced from time to
time by the amount of any reductions thereto made pursuant to subsection 2.4B.
Each Lender's Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan Commitments
shall be paid in full no later than that date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the Revolving
Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, in no event
shall the Total Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect.
(v) Swing Line Loans. Swing Line Lender hereby agrees,
----------------
subject to the limitations set forth below with respect to the maximum aggregate
amount of all Swing Line Loans outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time during
the period from July 1, 1998 to but excluding the Revolving Loan Commitment
Termination Date by making Base Rate Loans as Swing Line Loans to Company in an
aggregate amount not to exceed the amount of the Swing Line Loan Commitment, to
be used for the purposes identified in subsection 2.5B, notwithstanding the fact
that such Swing Line Loans, when aggregated with the sum of Swing Line Lender's
outstanding Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter
of Credit Usage then in effect, may exceed Swing Line Lender's Revolving Loan
Commitment. The original amount of the Swing Line Loan Commitment is
$10,000,000; provided that the amounts of the Swing Line
--------
40
<PAGE>
Loan Commitment are subject to reduction as provided in clause (b) of the next
paragraph. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts owed
hereunder with respect to the Swing Line Loans shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(v) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, the Swing
Line Loans, and the Swing Line Loan Commitment shall be subject to the following
limitations in the amounts indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect;
(b) any reduction of the Revolving Loan Commitments made pursuant to
subsection 2.4B which reduces the aggregate Revolving Loan Commitments to
an amount less than the then current sum of the Swing Line Loan Commitment
shall result in an automatic corresponding pro rata reduction of the Swing
Line Loan Commitment such that the sum thereof equals the amount of the
Revolving Loan Commitments, as so reduced, without any further action on
the part of Company, Administrative Agent or Swing Line Lender.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may, at any
time in its sole and absolute discretion, deliver to Administrative Agent (with
a copy to Company), no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company) requesting Lenders to make
Revolving Loans that are Base Rate Loans to Company on such Funding Date in an
amount equal to the amount of such Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given which Swing Line Lender
requests Lenders to prepay. Anything contained in this Agreement to the
contrary notwithstanding, (i) the proceeds of such Revolving Loans made by
Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and applied to
repay a corresponding portion of the Refunded Swing Line Loans and (ii) on the
day such Revolving Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a
Revolving Loan made by Swing Line Lender to Company, and such portion of the
Swing Line Loans deemed to be so paid, shall no longer be outstanding as Swing
Line Loans and shall no longer be due under the Swing Line Note of Swing Line
Lender but shall instead constitute part of Swing Line Lender's outstanding
Revolving Loans to Company and shall be due under the Revolving Note issued by
Company to Swing Line Lender. Company hereby authorizes each of Administrative
Agent and Swing Line Lender to charge Company's accounts with Administrative
Agent and Swing Line Lender (up to the amount available in each such account) in
order to immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent the proceeds of such Revolving Loans made by Lenders,
including the Revolving Loan deemed
41
<PAGE>
to be made by Swing Line Lender, are not sufficient to repay in full the
Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to
be paid) to Swing Line Lender should be recovered by or on behalf of Company
from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared among
all Lenders in the manner contemplated by subsection 10.5.
If for any reason Revolving Loans are not made pursuant to this
subsection 2.1A(v) in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans on or before the
third Business Day after demand for payment thereof by Swing Line Lender, each
Lender with a Revolving Loan Commitment shall be deemed to, and hereby agrees
to, have purchased a participation in such outstanding Swing Line Loans, and in
an amount equal to its Pro Rata Share of the applicable unpaid amount together
with accrued interest thereon. Upon one Business Day's notice from Swing Line
Lender, each such Lender shall deliver to Swing Line Lender an amount equal to
its respective participation in the applicable unpaid amount in same day funds
at the Funding and Payment Office. In order to evidence such participation each
such Lender agrees to enter into a participation agreement at the request of
Swing Line Lender in form and substance satisfactory to Swing Line Lender. In
the event any such Lender fails to make available to Swing Line Lender the
amount of such Lender's participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Swing Line Lender
for the correction of errors among banks for three Business Days and thereafter
at the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary, (i) the
obligation of each Lender with a Revolving Loan Commitment to make Revolving
Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each such Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of Default or a
Potential Event of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that no
--------
such Lender shall have any such obligation unless (x) Swing Line Lender believed
in good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were
satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans
were made, or (y) such Lender had actual knowledge, by receipt of any notices
required to be delivered to such Lenders pursuant to subsection 6.1(ix) or
otherwise, that any such condition under Section 4 had not been satisfied and
such Lender failed to notify Swing Line Lender and Administrative Agent in
writing that it had no obligation to make Revolving Loans until such condition
was satisfied (any such notice to be effective as of the date of receipt thereof
by Swing Line Lender and Administrative Agent), or (z) the satisfaction of any
such condition under Section 4 not satisfied
42
<PAGE>
had been waived by Requisite Lenders prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made; and (ii) Swing Line
Lender shall not be obligated to make any Swing Line Loans if it has elected not
to do so after the occurrence and during the continuation of a Potential Event
of Default or Event of Default.
B. Borrowing Mechanics. Term Loans or Revolving Loans (including any
-------------------
such Loans made as Eurodollar Rate Loans with a particular Interest Period) made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(v) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to subsection 3.3B
for the purpose of reimbursing any Issuing Lender for the amount of a drawing or
payment under a Letter of Credit issued by it) shall be in an aggregate minimum
amount of $500,000 and integral multiples of $250,000 in excess of that amount.
Swing Line Loans made on any Funding Date shall be in an aggregate minimum
amount of $250,000 and integral multiples of $100,000 in excess of that amount.
Whenever Company desires that Lenders make Term Loans or Revolving Loans it
shall deliver to Administrative Agent on behalf of Company a Notice of Borrowing
no later than 12:00 Noon (New York time), at least three Business Days in
advance of the proposed Funding Date in the case of a Eurodollar Rate Loan, or
at least one Business Day in advance of the proposed Funding Date in the case of
a Base Rate Loan. Whenever Company desires that Swing Line Lender make a Swing
Line Loan, it shall deliver to Administrative Agent a Notice of Borrowing no
later than 12:00 Noon (New York time) on the proposed Funding Date. The Notice
of Borrowing shall specify (i) the proposed Funding Date (which shall be a
Business Day), (ii) the amount and type of Loans requested, (iii) in the case of
Swing Line Loans, that such Loans shall be Base Rate Loans, (iv) in the case of
any Loans other than Swing Line Loans, whether such Loans shall be Base Rate
Loans or Eurodollar Rate Loans, and (v) in the case of any Loans requested to be
made as Eurodollar Rate Loans, the initial Interest Period requested therefor.
Term Loans and Revolving Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
--------
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing are no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by
43
<PAGE>
Company, as of the applicable Funding Date, as to the matters to which Company
is required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. Disbursement of Funds. All Term Loans and all Revolving Loans
---------------------
under this Agreement shall be made by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing and of the amount of such
Lender's Pro Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 12:00 Noon (New York time) on
the applicable Funding Date, in each case in same day funds, at the Funding and
Payment Office. Except as provided in subsection 2.1A(v) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of an honored drawing or payment
under a Letter of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of Additional
Tranche B Term Loans made on the Effective Date) and 4.2 (in the case of all
Loans), Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders or Swing Line Lender, as the case may be, to be credited to the account
of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three
44
<PAGE>
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate applicable to such Loan. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
------------
(i) Administrative Agent shall maintain, at the address
referred to in subsection 10.8, a register for the recordation of the names
and addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and the outstanding Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
outstanding Loans of each Lender. Any such recordation shall be conclusive
and binding on Company and each Lender, absent manifest error; provided,
--------
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the amount
of each Loan made by it and each payment in respect thereof. Any such
recordation shall be prima facie evidence of the amount of such Loans;
provided that failure to make any such recordation, or any error in such
--------
recordation, shall not affect Company's Obligations in respect of the
applicable Loans; and provided, further that in the event of any
-------- -------
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern, absent manifest error.
(iv) Company, Agents and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof,
and no assignment or transfer of any Commitment or Loan shall be effective,
in each case unless an until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii).
Prior to such recordation, all amounts owed with respect to the applicable
Commitment or Loan shall be owed to the Lender listed in the Register as
the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall
45
<PAGE>
be conclusive and binding on any subsequent holder, assignee or transferee
of the corresponding Commitments or Loans.
(v) Company hereby designates Chase, and any financial
institution serving as a successor Administrative Agent, to serve as
Company's agent solely for purposes of maintaining the Register as provided
in this subsection 2.1D, and Company hereby agrees that, to the extent
Chase serves in such capacity, Chase and its officers, directors,
employees, agents and affiliates shall constitute Indemnities for all
purposes under subsection 10.3.
E. Notes. Company shall execute and deliver on or before the
-----
Effective Date (i) to each requesting Lender (or to Administrative Agent for
that Lender) (a) a Tranche A Term Note substantially in the form of Exhibit IV
----------
annexed hereto, to evidence that Lender's Tranche A Term Loans in the principal
amount of that Lender's Tranche A Term Loans and with other appropriate
insertions, (b) a Tranche B Term Note substantially in the form of Exhibit V
---------
annexed hereto, to evidence that Lender's Tranche B Term Loans in the principal
amount of that Lender's Tranche B Term Loans and with other appropriate
insertions, (c) [Reserved] and (d) a Revolving Note substantially in the form of
Exhibit VII annexed hereto to evidence that Lender's Revolving Loans, in the
- -----------
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (ii) to Swing Line Lender, a Swing Line Note
substantially in the form of Exhibit VIII annexed hereto to evidence Swing Line
------------
Lender's Swing Line Loans, in the principal amount of the Swing Line Commitment
and with other appropriate insertions. The Notes and the Obligations evidenced
thereby shall be governed by, subject to and benefit from all of the terms and
conditions of this Agreement and the other Loan Documents and shall be
guarantied and/or secured by the Collateral as provided in the Loan Documents.
2.2 Interest on the Loans.
---------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6
----------------
and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate, as the case may be, plus the Applicable Margin.
Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate, plus the Applicable Margin. The applicable basis
for determining the rate of interest with respect to any Loan shall be selected
by Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B. The basis for determining the interest
rate with respect to any Term Loan or any Revolving Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day any Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate,
plus the Applicable Margin for Base Rate Loans.
46
<PAGE>
Subject to the provisions of subsections 2.2E and 2.7, the Term Loans
and the Revolving Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Margin for Base Rate Loans; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin for Eurodollar Loans.
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at the sum of the Base Rate plus the
----
Applicable Margin with respect to Base Rate Revolving Loans.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
----------------
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one-, two-, three- or six-month period;
provided that:
- --------
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case of
a Loan initially made as a Eurodollar Rate Loan, or on the date specified
in the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/ Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (iii) of this subsection 2.2B, end on the last
Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond June 30, 2005, no interest period
with respect to any portion of the Tranche B Term Loans shall extend beyond
September 30, 2006, and no Interest Period with respect to any portion of
the Revolving Loans shall extend beyond the Revolving Loan Commitment
Termination Date;
47
<PAGE>
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of such Term Loans unless the sum of (a) the
aggregate principal amount of such Term Loans that are Base Rate Loans plus
----
(b) the aggregate principal amount of such Term Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the Term Loans on such
date;
(vii) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a permanent reduction
of the Revolving Loan Commitments is scheduled to occur unless the sum of
(a) the aggregate principal amount of Revolving Loans that are Base Rate
Loans plus (b) the aggregate principal amount of Revolving Loans that are
----
Eurodollar Rate Loans with Interest Periods expiring on or before such date
plus (c) the excess of the Revolving Loan Commitments then in effect over
----
the aggregate principal amount of Revolving Loans then outstanding equals
or exceeds the permanent reduction of the Revolving Loan Commitments that
is scheduled to occur on such date;
(viii) there shall be no more than ten (10) Interest Periods
outstanding at any time; and
(ix) in the event Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected
an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
-----------------
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event that any Swing Line Loans, any Revolving
--------
Loans or any Term Loans that are Base Rate Loans are prepaid pursuant to
subsection 2.4B(i), interest accrued on such Swing Line Loans, Revolving Loans
or Term Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. Conversion or Continuation. Subject to the provisions of
--------------------------
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $500,000 and
integral multiples of $250,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $500,000 and integral
multiples of $250,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
- -------- -------
Rate Loan on the expiration date of an Interest Period applicable thereto.
48
<PAGE>
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the
---------------------
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code, or other applicable bankruptcy or
insolvency laws) payable upon demand at a rate that is 2% per annum in excess of
the interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Revolving Loans bearing interest at a rate determined by
reference to the Base Rate); provided that, in the case of Eurodollar Rate
--------
Loans, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate equal to 2% per annum in excess of the
49
<PAGE>
interest rate otherwise payable under this Agreement for Base Rate Loans that
are Term Loans or Revolving Loans, as applicable. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of any
Agent or Lender.
F. Computation of Interest. Interest on Loans shall be computed on
-----------------------
the basis of a 360-day year and for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. Company agrees to pay to Administrative Agent,
---------------
for distribution to each Lender having a Revolving Loan Commitment, in
proportion to that Lender's Pro Rata Share of the Revolving Loan Commitments,
commitment fees ("Commitment Fees"; each, a "Commitment Fee") for the period
from and including July 1, 1998 to and excluding the Revolving Loan Commitment
Termination Date equal to (i) the average of the daily excess of the Revolving
Loan Commitments over the sum of (x) the aggregate principal amount of Revolving
Loans outstanding (but not any Swing Line Loans outstanding), and (y) the Letter
of Credit Usage multiplied by (ii) the Applicable Margin for Commitment Fees.
-------------
All such Commitment Fees shall be calculated on the basis of a 360-day year and
the actual number of days elapsed and shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year and on the
Revolving Loan Commitment Termination Date.
B. Other Fees. Company agrees to pay to Agents such other fees in
----------
the amounts and at the times separately agreed upon between Company and the
applicable Agents.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments under Guaranties.
---------------------------------------------------------------------
A. Scheduled Payments of Term Loans and Scheduled Reductions of
Revolving Loan Commitments.
----------------------------------------------------------------
(i) Scheduled Payments of Tranche A Term Loans. Company shall make
------------------------------------------
principal payments on the Tranche A Term Loans in installments on the dates and
in the amounts set forth below:
50
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF TERM LOANS
- ------------------------------------------------------------------------------
<S> <C>
December 31, 1998 $ 5,000,000
- ------------------------------------------------------------------------------
March 31, 1999 $ 5,000,000
June 30, 1999 $ 5,000,000
September 30, 1999 $ 5,000,000
December 31, 1999 $ 5,000,000
- ------------------------------------------------------------------------------
March 31, 2000 $ 5,000,000
June 30, 2000 $ 5,000,000
September 30, 2000 $ 7,500,000
December 31, 2000 $ 7,500,000
- ------------------------------------------------------------------------------
March 31, 2001 $ 7,500,000
June 30, 2001 $ 7,500,000
September 30, 2001 $ 7,500,000
December 31, 2001 $ 7,500,000
- ------------------------------------------------------------------------------
March 31, 2002 $ 7,500,000
June 30, 2002 $ 7,500,000
September 30, 2002 $10,000,000
December 31, 2002 $10,000,000
- ------------------------------------------------------------------------------
March 31, 2003 $10,000,000
June 30, 2003 $10,000,000
September 30, 2003 $10,000,000
December 31, 2003 $10,000,000
- ------------------------------------------------------------------------------
March 31, 2004 $10,000,000
June 30, 2004 $10,000,000
September 30, 2004 $12,500,000
December 31, 2004 $12,500,000
- ------------------------------------------------------------------------------
March 31, 2005 $12,500,000
June 30, 2005 $12,500,000
==============================================================================
</TABLE>
provided that the scheduled installments of principal of the Tranche A Term
- --------
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Tranche A Term Loans in accordance with subsection
2.4C; and provided further, that the final installment payable by Company in
----------------
respect of the Tranche A Term Loans shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche A Term Loans.
51
<PAGE>
(ii) Scheduled Payments of Tranche B Term Loans. Company shall make
------------------------------------------
principal payments on the Tranche B Term Loans in installments on the dates and
in the amounts set forth below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF TERM LOANS
- ------------------------------------------------------------------------------
<S> <C>
June 30, 1999 $125,000
September 30, 1999 $125,000
December 31, 1999 $812,500
- ------------------------------------------------------------------------------
March 31, 2000 $812,500
June 30, 2000 $812,500
September 30, 2000 $812,500
December 31, 2000 $812,500
- ------------------------------------------------------------------------------
March 31, 2001 $812,500
June 30, 2001 $812,500
September 30, 2001 $812,500
December 31, 2001 $812,500
- ------------------------------------------------------------------------------
March 31, 2002 $812,500
June 30, 2002 $812,500
September 30, 2002 $812,500
December 31, 2002 $812,500
- ------------------------------------------------------------------------------
March 31, 2003 $812,500
June 30, 2003 $812,500
September 30, 2003 $812,500
December 31, 2003 $812,500
- ------------------------------------------------------------------------------
March 31, 2004 $812,500
June 30, 2004 $812,500
September 30, 2004 $812,500
December 31, 2004 $812,500
- ------------------------------------------------------------------------------
March 31, 2005 $812,500
June 30, 2005 $812,500
September 30, 2005 $812,500
December 31, 2005 $812,500
- ------------------------------------------------------------------------------
March 31, 2006 $118,145,500
June 30, 2006 $118,145,500
September 30, 2006 $118,146,500
==============================================================================
</TABLE>
provided that the scheduled installments of principal of the Tranche B Term
- --------
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the
52
<PAGE>
Tranche B Term Loans in accordance with subsection 2.4C; and provided further,
----------------
that the final installment payable by Company in respect of the Tranche B Term
Loans shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Company under this Agreement
with respect to the Tranche B Term Loans.
(iii) [Reserved].
(iv) Scheduled Reductions of Revolving Loan Commitments. Except as
--------------------------------------------------
set forth in the following proviso, the Revolving Loan Commitments shall be
permanently reduced on the date and in the amount set forth below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
SCHEDULED REDUCTION
DATE OF REVOLVING LOAN
COMMITMENTS
- ------------------------------------------------------------------------------
<S> <C>
June 30, 2005 $175,000,000
- ------------------------------------------------------------------------------
</TABLE>
and provided further, that the scheduled reductions of the Revolving Loan
----------------
Commitments set forth above shall be reduced in connection with any voluntary or
mandatory reductions of the Revolving Loan Commitments in accordance with
subsection 2.4C.
B. Prepayments and Voluntary Reductions in Revolving Loan
--------------
Commitments.
-----------------
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York time) on the
date of prepayment, which notice, if telephonic, shall be promptly confirmed in
writing, at any time and from time to time prepay, without premium or penalty,
any Swing Line Loan on any Business Day in whole or in part in an aggregate
minimum amount of $250,000 and integral multiples of $100,000 in excess of that
amount. In addition, so long as no Swing Line Loans are then outstanding,
Company may, upon not less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and three Business Days' prior written
or telephonic notice, in the case of Eurodollar Rate Loans, in each case
confirmed in writing to Administrative Agent (which notice Administrative Agent
will promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay, without premium or penalty, the Loans other
than Swing Line Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $250,000 in excess of that
amount; provided, however, that prepayment of a Eurodollar Rate Loan on any day
-------- -------
other than the expiration of the Interest Period applicable thereto shall be
subject to compliance with subsection 2.6D. Notice of prepayment having been
given as aforesaid, the Loans shall become due and payable on the prepayment
date specified in such notice and in the aggregate principal amount specified
therein. Any voluntary prepayments pursuant to this subsection 2.4B(i) shall be
applied as specified in subsection 2.4C.
53
<PAGE>
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
--------------------------------------------------
may, upon not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which notice Administrative Agent
will promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time terminate in whole or permanently reduce in part,
without premium or penalty, the Revolving Loan Commitments in an amount up to
the amount by which the Revolving Loan Commitments exceed the Total Utilization
of Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
--------
Commitments shall be in an aggregate minimum amount of $500,000 and integral
multiples of $250,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be effective on
the date specified in such notice and shall reduce the Revolving Loan Commitment
of each Lender proportionately to its Pro Rata Share. Any such voluntary
reduction of the Revolving Loan Commitments shall be applied as specified in
subsection 2.4C.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
-----------------------------------------------------------
Loan Commitments.
- ----------------
The Loans shall be prepaid and the Revolving Loan Commitments
shall be reduced in the manner provided in subsection 2.4C upon the occurrence
of the following circumstances:
(a) Prepayments and Reductions from Asset Sales. No later than the
-------------------------------------------
second Business Day following the date of receipt by Company or any of its
Subsidiaries of the Net Cash Proceeds of any Asset Sale (other than any
portion of such Net Cash Proceeds that is reinvested (or scheduled for
reinvestment) in assets of the general type used in the business of Company
and its Subsidiaries within 360 days from the date of receipt of such Net
Cash Proceeds (such Net Cash Proceeds that are reinvested or to be
reinvested not to exceed $55,000,000 in aggregate amount in any Fiscal
Year)), Company shall prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) in an aggregate amount equal to such Net Cash
Proceeds; provided, however, that Company may not reinvest (or schedule for
-------- -------
reinvestment) Net Cash Proceeds upon the occurrence and during the
continuation of an Event of Default. Company shall, no later than 360 days
after receipt of any such Net Cash Proceeds that have not theretofore been
applied to the Obligations, make an additional prepayment of the Loans
(and/or the Revolving Loan Commitments shall be reduced) in the full amount
of all such proceeds that have not therefore been so reinvested.
Concurrently with any prepayment of the Loans and/or reduction of the
Commitments pursuant to this subsection 2.4B(iii)(a), Company shall deliver
to Administrative Agent an Officer's Certificate demonstrating the
derivation of the Net Cash Proceeds of the correlative Asset Sale from the
gross sales price thereof. In the event that Company shall, at any time
after receipt of Net Cash Proceeds of any Asset Sale requiring a prepayment
or a reduction of the Revolving Loan Commitments pursuant to this
subsection 2.4B(iii)(a), determine that the prepayments and/or reductions
of the Revolving Loan Commitments previously made in respect of such Asset
Sale were in an
54
<PAGE>
aggregate amount less than that required by the terms of this subsection
2.4B(iii)(a), Company shall promptly cause to be made an additional
prepayment of the Loans (and/or reduction in the Revolving Loan
Commitments) in an amount equal to the amount of any such deficit, and
Company shall concurrently therewith deliver to Administrative Agent an
Officer's Certificate demonstrating the derivation of the additional Net
Cash Proceeds resulting in such deficit.
(b) Prepayments and Reductions Due to Issuance of Debt. On or prior
--------------------------------------------------
to the first Business Day after receipt by Company or any of its
Subsidiaries of any proceeds of any Indebtedness (other than the Loans and
any other Indebtedness permitted under subsection 7.1(i), (ii), (iii),
(iv), (v), (vii) or (viii)), Company shall prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) in an amount equal to the
amount of such proceeds; provided, however, that such proceeds from
-------- -------
Indebtedness permitted under subsection 7.1(vi) shall not be applied to
prepay Loans pursuant to this subsection if and to the extent such proceeds
are applied by Company to repay the Indebtedness with respect to the
Subordinated Notes; and provided further, that payment or acceptance of the
-------- -------
amounts provided for in this subsection 2.4B(iii)(b) shall not constitute a
waiver of any Event of Default resulting from the incurrence of such
Indebtedness or otherwise prejudice any rights or remedies of Agents or
Lenders.
(c) Prepayments and Reductions Due to Issuance of Equity Securities.
---------------------------------------------------------------
At any time the Leverage Ratio is greater than 3.25:1.00, on or prior to
the first Business Day after receipt by Company or any of its Subsidiaries
of any Equity Proceeds after the Effective Date, Company shall prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) in an amount
equal to 50% of such Equity Proceeds; provided, however, that such Equity
-------- -------
Proceeds shall not be applied to prepay Loans pursuant to this subsection
if and to the extent such Equity Proceeds were derived (x) directly or
indirectly from a sale of Securities to employees or directors of Company
and its Subsidiaries pursuant to any employee stock option or stock
purchase plan or other employee benefit plan, and (y) from sales of
Securities to management officers and directors after July 1, 1998 to the
extent the consideration paid therefor does not exceed $5,000,000.
(d) Prepayments and Reductions from Insurance and Condemnation
----------------------------------------------------------
Proceeds. No later than the second Business Day following the date of
--------
receipt by Company or any of its Subsidiaries of any cash payments under
any of the casualty insurance policies covering damage to or loss of
property maintained pursuant to subsection 6.4 resulting from damage to or
loss of all or any portion of the Collateral or any other tangible asset
(net of actual and documented reasonable costs incurred by Company or any
of its Subsidiaries in connection with adjustment and settlement thereof,
"Insurance Proceeds") or any proceeds resulting from the taking of assets
by the power of eminent domain, condemnation or otherwise (net of actual
and documented reasonable costs incurred by Company or any of its
Subsidiaries in connection with adjustment and settlement thereof,
"Condemnation Proceeds") (other than, if no Event of Default shall have
occurred and be continuing or shall be caused thereby, any portion of any
such proceeds that is reinvested
55
<PAGE>
(or scheduled for reinvestment) in assets of the general type used in the
business of Company and its Subsidiaries within 360 days from the date of
receipt of such proceeds), Company shall prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) in the amount of such proceeds
not so reinvested (or scheduled for such reinvestment). Company shall, no
later than 360 days after receipt of any such Insurance Proceeds or
Condemnation Proceeds that have not theretofore been applied to the
Obligations, make an additional prepayment of the Loans (and/or the
Revolving Loan Commitments shall be reduced) in the full amount of all such
proceeds that have not therefore been reinvested in such assets.
(e) Prepayments and Reductions from Consolidated Excess Cash Flow.
-------------------------------------------------------------
In the event that there shall be Consolidated Excess Cash Flow for any
Fiscal Year (commencing with the Fiscal Year ending in December 1998),
Company shall, no later than 100 days after the end of such Fiscal Year,
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow
for such Fiscal Year; provided however, that if the Leverage Ratio is less
-------- -------
than or equal to 4.00:1.00, then such prepayment of the Loans and/or
reduction of the Revolving Loan Commitments shall be in an aggregate amount
equal to 25% of such Consolidated Excess Cash Flow for such Fiscal Year.
(f) Prepayments Due to Reductions or Restrictions of Revolving Loan
---------------------------------------------------------------
Commitments. Company shall prepay the Swing Line Loans and/or the
-----------
Revolving Loans from time to time to the extent necessary so that (y) the
Total Utilization of Revolving Loan Commitments shall not at any time
exceed the Revolving Loan Commitments then in effect, and (z) the aggregate
principal amount of all outstanding Swing Line Loans shall not at any time
exceed the Swing Line Loan Commitment then in effect. All Swing Line Loans
shall be prepaid in full prior to the prepayment of any Revolving Loans
pursuant to this subsection 2.4B(iii)(f).
C. Application of Prepayments and Unscheduled Reductions of
-------------
Revolving Loan Commitments.
--------------------------
(i) Application of Voluntary Prepayments by Type of Loans. Any
-----------------------------------------------------
voluntary prepayments pursuant to subsection 2.4B(i) shall be applied: first to
-----
repay outstanding Swing Line Loans to the full extent thereof, second to repay
------
outstanding Revolving Loans to the full extent thereof, and third, to repay
-----
outstanding Tranche A Term Loans and Tranche B Term Loans pro rata and shall be
applied to the respective remaining installments thereof on a pro rata basis to
the full extent thereof.
(ii) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "Applied Amount") required to be applied as a mandatory prepayment
of the Loans and/or a reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) shall be applied: first to prepay the Tranche A
-----
Term Loans and Tranche B Term Loans pro rata and shall be applied to the
respective remaining installments thereof on a pro rata basis to the full extent
thereof, second, to the extent of any remaining portion of the Applied Amount,
------
to prepay the
56
<PAGE>
Swing Line Loans to the full extent thereof and to permanently reduce the
Revolving Loan Commitments by the amount of such prepayment, third, to the
-----
extent of any remaining portion of the Applied Amount, to prepay the Revolving
Loans to the full extent thereof and to further permanently reduce the Revolving
Loan Commitments by the amount of such prepayment, and fourth, to the extent of
------
any remaining portion of the Applied Amount, to further permanently reduce the
Revolving Loan Commitments to the full extent thereof; provided however, that so
-------- -------
long as any Tranche A Term Loans are outstanding, each Lender of Tranche B Term
Loans shall have the right to refuse all or any portion of any mandatory
prepayment allocable to it, and the amount so refused shall be applied to prepay
the Tranche A Term Loans. Notwithstanding the foregoing or anything herein to
the contrary, no portion of the proceeds of Indebtedness permitted under
subsection 7.1(vi) which are applied to prepay the Loans shall be applied to
permanently reduce the Revolving Loan Commitments.
(iii) Application of Prepayments of Term Loans to the Scheduled
---------------------------------------------------------
Installments of Principal Thereof. Any prepayments of the Tranche A Term Loans
- ---------------------------------
or Tranche B Term Loans pursuant to subsection 2.4B(i) or 2.4B(iii) shall be
applied to prepay the Tranche A Term Loans or Tranche B Term Loans on a pro rata
basis in accordance with the outstanding principal amounts thereof. Any
mandatory prepayments applied to the Tranche A Term Loans or Tranche B Term
Loans pursuant to this subsection shall be applied on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof) to each
scheduled installment of principal of the Tranche A Term Loans or Tranche B Term
Loans set forth in subsections 2.4A(i) or 2.4A(ii), respectively, that is unpaid
at the time of such prepayment.
(iv) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Considering Term Loans and Revolving Loans being prepaid
- ----------
separately, any prepayment thereof shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be made
by Company pursuant to subsection 2.6D.
(v) Application of Unscheduled Reductions of Revolving Loan
-------------------------------------------------------
Commitments. Any voluntary or mandatory reduction of the Revolving Loan
- -----------
Commitments pursuant to subsection 2.4B(ii) or 2.4B(iii) shall be applied to
reduce the scheduled reductions of the Revolving Loan Commitments set forth in
subsection 2.4A(iv) in reverse chronological order.
D. Application of Proceeds of
Collateral and Payments Under Guaranties.
----------------------------------------
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsection 2.4B(iii)(a) with respect to prepayments from Net Cash Proceeds of
Asset Sales, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for, and/or
(then or at any time thereafter) applied in full or in part by Administrative
Agent against, the applicable Secured Obligations (as defined in such Collateral
Document) in the following order of priority:
57
<PAGE>
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including without limitation reasonable
compensation to Administrative Agent and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such Collateral
Document and all advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of all reasonable
costs and expenses paid or incurred by Administrative Agent in connection
with the exercise of any right or remedy under such Collateral Document,
all in accordance with the terms of this Agreement and such Collateral
Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations for the ratable benefit of
the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments
----------------------------------------
received by Administrative Agent under any Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of priority:
(a) To the payment of the reasonable costs and expenses of any
collection or other realization under such Guaranty, including without
limitation reasonable compensation to Administrative Agent and its agents
and counsel, and all expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, all in accordance with the
terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess of such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess of such payments, to
the payment the applicable Subsidiary Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
E. General Provisions Regarding Payments.
-------------------------------------
(i) Manner and Time of Payment. All payments by Company of
--------------------------
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in same day funds and without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent not
later than 12:00 Noon (New York time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by Company on the
next succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its
58
<PAGE>
accounts with such Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal amount of
any Loan shall include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments (and in any event any payments made in
respect of any Loan on a date when interest is due and payable with respect to
such Loan) shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments shall be apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its applicable
Lending Office specified on Schedule 2.1 or at such other address as such Lender
------------
may request, its Pro Rata Share of all such payments received by Administrative
Agent and the commitment fees of such Lender when received by Administrative
Agent pursuant to subsection 2.3. Notwithstanding the foregoing provisions of
this subsection 2.4E(iii) if, pursuant to the provisions of subsection 2.6C, any
Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and of
the date to which interest thereon has been paid; provided that the failure to
--------
make (or any error in the making of) a notation of any Loan made under such Note
shall not limit or otherwise affect the obligations of Company hereunder or
under such Note with respect to any Loan or any payments of principal or
interest on such Note.
2.5 Use of Proceeds.
---------------
A. Additional Tranche B Term Loans. The proceeds of the Additional
-------------------------------
Tranche B Term Loans shall be applied to (i) finance the Lender's Bagels
Acquisition and (ii) pay related fees and expenses in connection therewith.
B. Revolving Loans; Swing Line Loans. The proceeds of the Revolving
---------------------------------
Loans and any Swing Line Loans have been and shall be applied by Company to
finance
59
<PAGE>
expenditures which are included in the definition of Consolidated
Capital Expenditures and for working capital and general corporate purposes,
including acquisitions in accordance with subsection 7.7(vi), and which may
include the making of intercompany loans to any of Company's Wholly Owned
Subsidiaries, in accordance with subsection 7.1(iv), for their own working
capital and general corporate purposes.
C. Compliance With Laws. Company hereby undertakes that no portion
--------------------
of the proceeds of any Loans or other extensions of credit under this Agreement
shall be used by any Loan Party in any manner which would be illegal under, or
which would cause the invalidity or unenforceability (in each case in whole or
in part) of any Loan Document under, any applicable law.
D. Margin Regulations. Without limiting the generality of subsection
------------------
2.5C, no portion of the proceeds of any borrowing under this Agreement shall be
used by Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
-----------------------------------------
after 11:00 A. M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event
-----------------------------------------------
that Administrative Agent shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that
by reason of circumstances arising after the date of this Agreement affecting
the London interbank market, adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the basis provided
for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on
such date give notice (by telecopy or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Eurodollar Rate Loans, until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist (such notification not to be unreasonably
withheld or delayed) and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect
60
<PAGE>
to the Loans in respect of which such determination was made shall be deemed to
be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
-------------------------------------------------------
event that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telecopy or by telephone confirmed in writing)
to Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans, shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans, as the case may be
(the "Affected Loans"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telecopy or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
-----------------------------------------------------------------
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or reemployment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a
61
<PAGE>
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request for conversion or continuation, (ii) if any prepayment (including
without limitation any prepayment pursuant to subsection 2.4B(i)) or conversion
of any of its Eurodollar Rate Loans occurs on a date that is not the last day of
an Interest Period applicable to that Loan, (iii) if any prepayment of any of
its Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
--------------------------------
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
-------------------------------------------------------
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
-----------------
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
-----------------------------------
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/ Continuation given by Company with
respect to a requested borrowing or conversion/ continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the
------------------------------------------
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any law, treaty or governmental
rule, regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by
62
<PAGE>
any central bank or other governmental or quasigovernmental authority (whether
or not having the force of law):
(i) results in a change in the basis of taxation of such Lender
(or its applicable lending office) (other than a change with respect to any
Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such
Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including, without limitation, any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance
or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of
such Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder, or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Eurodollar Rate Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Lender shall
promptly notify Company and Administrative Agent thereof and Company shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender shall reasonably determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be prima facie evidence of such additional amounts.
B. Withholding of Taxes.
--------------------
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from which a payment is made by or on
behalf of Company.
63
<PAGE>
(ii) Withholding of Taxes. If Company or any other Person is
--------------------
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by Company to Administrative Agent or any Lender
under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on Company) for its own account or (if that liability is imposed
on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction,
withholding or payment, Administrative Agent or such Lender, as the case
may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after the
due date of payment of any Tax which it is required by clause (b) above to
pay, Company shall deliver to Administrative Agent evidence of such
deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
- --------
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof (for purposes of this subsection 2.7B(iii), a "Non-US
Lender") shall deliver to Administrative Agent for transmission to Company,
on or prior to July 1, 1998 (in the case of each Existing Lender), on or
prior to the Effective Date (in the case of each New Lender) or on or prior
to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative Agent (each
in the reasonable exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or
64
<PAGE>
any successor forms), accurately completed and duly executed by such
Lender, together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form 1001
or 4224 (or any successor forms) pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original copies of
Internal Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters pursuant to subsection 2.7B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or inaccurate
in any material respect, such Lender shall (1) deliver to Administrative
Agent for transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224 (or any successor forms), or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8 (or any successor form), as the case may be, accurately
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm or
establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to payments to such Lender
under the Loan Documents or (2) immediately notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other
evidence.
(c) Company shall not be required to pay any additional amount to
any Non-US Lender under clause (c) of subsection 2.7B(ii) in respect of
deductions or withholdings of United States federal income taxes if such
Lender shall have failed to satisfy the requirements of subsection
2.7B(iii)(a) or 2.7B(iii)(b); provided that if such Lender shall have
--------
satisfied such requirements on the date such Lender became a Lender for all
purposes under this Agreement (whether by assignment, amendment, or
otherwise), nothing in this subsection 2.7B(iii)(c) shall relieve Company
of its obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that such Lender
is not subject to withholding as described in subsection 2.7B(iii)(a) or
2.7B(iii)(b).
65
<PAGE>
C. Capital Adequacy Adjustment. If any Lender shall have determined
---------------------------
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by the National Association of Insurance Commissioners,
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of the National
Association of Insurance Commissioners, any such governmental authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender reasonably determines such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time to
time, within fifteen Business Days after receipt by Company from such Lender of
the statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. Substitute Lenders. In the event Company is required under the
------------------
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Company in accordance with
this Agreement, Company may, so long as no Event of Default or Potential Event
of Default shall have occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently with such termination,
--------
(i) Company shall pay that Lender all principal interest and fees and other
amounts (including without limitation amounts, if any, owed under this
subsection 2.7) due to be paid to such Lender with respect to all periods
through such date of termination, (ii) another financial institution
satisfactory to Company and Administrative Agent shall agree, as of such date,
to become a Lender for all purposes under this Agreement (whether by assignment
or amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
-----------------------------------------------------
66
<PAGE>
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
--------
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
---------------------------------------------------------------------
Therein.
- -------
A. Letters of Credit. In addition to Company requesting that Lenders
-----------------
make Tranche A Term Loans pursuant to subsection 2.1A(i), Existing Tranche B
Term Loans pursuant to subsection 2.1A(ii), Additional Tranche B Term Loans
pursuant to subsection 2.1A(iii), Revolving Loans pursuant to subsection
2.1A(iv), and that Swing Line Lender make Swing Line Loans pursuant to
subsection 2.1A(v), Company may request, in accordance with the provisions of
this subsection 3.1, from time to time during the period from July 1, 1998 to
but excluding the Revolving Loan Commitment Termination Date, that one or more
Lenders issue Letters of Credit for the account of Company for the purposes
specified in the definitions of Commercial Letters of Credit and Standby Letters
of Credit. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set forth,
any one or more Lenders may, but (except as provided in subsection 3.1B(ii))
shall not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
--------
any Lender issue (and no Lender shall issue):
67
<PAGE>
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would exceed
the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment Termination
Date and (b) the date which is one year from the date of issuance of such
Standby Letter of Credit; provided that the immediately preceding clause
--------
(b) shall not prevent any Issuing Lender from agreeing that a Standby
Letter of Credit will automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing Lender elects not
to extend for any such additional period; provided further that, unless
-------- -------
Requisite Lenders otherwise consent, such Issuing Lender shall give notice
that it will not extend such Standby Letter of Credit if it has knowledge
that an Event of Default has occurred and is continuing on the last day on
which such Issuing Lender may give notice to the beneficiary that it will
not extend such Standby Letter of Credit;
(iv) any Commercial Letter of Credit (a) having an expiration
date later than the earlier of (X) 30 days prior to the Revolving Loan
Commitment Termination Date and (Y) the date which is 180 days from the
date of issuance of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its reasonable
discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars; or
(vi) any Letter of Credit during any period when a Lender
Default exists, unless each Issuing Lender has entered into arrangements
satisfactory to it and Company to eliminate such Issuing Lender's risk with
respect to the Defaulting Lender, including by cash collateralizing such
Defaulting Lender's Pro Rata Share of the Letter of Credit Usage (after
giving effect to the issuance of the proposed Letter of Credit).
B. Mechanics of Issuance.
---------------------
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent, at the Funding and
Payment Office, a Notice of Issuance of Letter of Credit no later than 12:00
Noon (New York time) at least five Business Days, or such shorter period as may
be agreed to by the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the proposed date of issuance (which shall be a Business Day), (b)
the face amount of or maximum aggregate liability under, as applicable, the
Letter of Credit, (c) the expiration date of the Letter of Credit, (d) the name
and address of the beneficiary, and (e) the verbatim text of the proposed Letter
of Credit or the proposed terms and conditions thereof, including a precise
68
<PAGE>
description of any documents and the verbatim text of any certificates to be
presented by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing Lender to
make payment under the Letter of Credit; provided that the Issuing Lender, in
--------
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents or certificates; provided further that no
-------- -------
Letter of Credit shall require payment against a conforming draft or other
request for payment to be made thereunder on the same Business Day (under the
laws of the jurisdiction in which the office of the Issuing Lender to which such
draft or other request for payment is required to be presented is located) that
such draft or other request for payment is presented if such presentation is
made after 10:00 A.M. (in the time zone of such office of the Issuing Lender) on
such Business Day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of Credit is
no longer true and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit, Company shall be deemed
to have recertified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by
-------------------------------
Administrative Agent of a Notice of Issuance of Letter of Credit pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative Agent
shall promptly so notify Company, and such Administrative Agent shall be the
Issuing Lender with respect thereto. In the event that Administrative Agent, in
its sole discretion, elects not to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, whereupon Company may request any other
Lender to issue such Letter of Credit by delivering to such Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Lender so requested to
issue such Letter of Credit shall promptly notify Company and Administrative
Agent whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue such Letter of
Credit shall be the Issuing Lender with respect thereto. In the event that all
other Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue such
Letter of Credit, Administrative Agent shall be obligated to issue such Letter
of Credit and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the sum of the Letter of Credit Usage with respect to such Letter
of Credit and with respect to all other Letters of Credit issued by
Administrative when aggregated with Administrative Agent's outstanding Revolving
Loans and Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
----------------------------
(in accordance with subsection 10.6) of the conditions set forth in subsection
4.2, the Issuing Lender shall issue the requested Letter of Credit in accordance
with the Issuing Lender's standard operating procedures (any such issuance by
Administrative Agent being effected through the Funding and Payment Office), and
upon its issuance of such Letter of Credit the Issuing Lender shall promptly
69
<PAGE>
notify Administrative Agent and each Lender of such issuance, which notice shall
be accompanied by a copy of such Letter of Credit.
(iv) Reports to Lenders. Within 30 days after the end of each
------------------
calendar quarter ending after the Closing Date, so long as any Letter of Credit
shall have been outstanding during such calendar quarter, each Issuing Lender
shall deliver to Administrative Agent and Administrative Agent shall deliver to
each Lender a report setting forth for such calendar quarter the daily maximum
amount available to be drawn under the Letters of Credit that were outstanding
during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
--------------------------------------------------------
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in such Letter of
Credit and any drawings honored or payments made thereunder in an amount equal
to such Lender's Pro Rata Share (with respect to the Revolving Loan Commitments)
of the maximum amount which is or at any time may become available to be drawn
or required to be paid thereunder.
3.2 Letter of Credit Fees.
---------------------
Company agrees to pay the following amounts to each Issuing Lender
with respect to Letters of Credit issued by it for the account of Company:
(i) with respect to each Letter of Credit, (a) a fronting fee
equal to 1/4 of 1% per annum of the daily maximum amount available to be
drawn under such Letter of Credit and (b) a Letter of Credit fee equal to
the product of (x) the Applicable Margin with respect to Eurodollar Rate
Revolving Loans and (y) the daily maximum amount available to be drawn
under such Letter of Credit, in each case payable in arrears on and to each
March 31, June 30, September 30 and December 31 of each year and computed
on the basis of a 360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder (without duplication
of the fees payable under clause (i) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment, transfer or
drawing, as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender its Pro Rata Share of such amount.
3.3 Drawings and Payments and Reimbursement of Amounts Paid
Under Letters of Credit.
-------------------------------------------------------
70
<PAGE>
A. Responsibility of Issuing Lender With Respect to Requests For
-------------------------------------------------------------
Drawings and Payments. In determining whether to honor any drawing or request
- ---------------------
for payment under any Letter of Credit by the beneficiary thereof, the Issuing
Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit.
----------------------------------------------------------------
In the event an Issuing Lender has determined to honor a drawing or request for
payment under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Company and Administrative Agent, and Company shall reimburse
such Issuing Lender on or before the Business Day immediately following the date
on which such drawing is honored or such payment is made (the applicable
"Reimbursement Date"), in an amount in same day funds equal to the amount of
such drawing; provided that, anything contained in this Agreement to the
--------
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 12:00 Noon (New York time) on the date of
such drawing or request for payment that Company intends to reimburse such
Issuing Lender for the amount of such honored drawing or payment with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans which are Base Rate Loans, on the applicable Reimbursement
Date in an amount equal to the amount of such honored drawing or payment and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Lenders shall, on the applicable Reimbursement Date, make Revolving Loans
and in the amount of such honored drawing or payment, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing or payment; provided further that
-------- -------
if for any reason proceeds of Revolving Loans are not received by such Issuing
Lender on the applicable Reimbursement Date in an amount equal to the amount of
such honored drawing or payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in Dollars and in same day funds equal to the excess of the
amount of such honored drawing or payment over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in this subsection 3.3B
shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Payments Under Letters of
------------------------------------------------------------
Credit.
- ------
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount equal to the amount of any honored drawing or payment made by such
Issuing Lender under a Letter of Credit issued by it, such Issuing Lender shall
promptly notify each other Lender of the unreimbursed amount of such honored
drawing or payment and of such other Lender's respective participation therein
based on such Lender's Pro Rata Share of the Revolving Loan Commitments. Each
Lender shall make available to such Issuing Lender an amount equal to its
respective participation, in same day funds, at the office of such Issuing
Lender specified in such
71
<PAGE>
notice, not later than 12:00 Noon (New York time) on the first Business Day
(under the laws of the jurisdiction in which such office of such Issuing Lender
is located) after the date notified by such Issuing Lender. In the event that
any Lender fails to make available to such Issuing Lender on such Business Day
the amount of such Lender's participation in such Letter of Credit as provided
in this subsection 3.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of errors among banks
for three Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of any Lender to recover
from any Issuing Lender any amounts made available by such Lender to such
Issuing Lender pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent jurisdiction that the
payment with respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
-------------------------------------------------------
Company. In the event any Issuing Lender shall have been reimbursed by other
- -------
Lenders pursuant to subsection 3.3C(i) for all or any portion of any honored
drawing or payment made by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall distribute to each other Lender which has paid
all amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing or payment such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in reimbursement of
such honored drawing or payment when such payments are received. Any such
distribution shall be made to a Lender at its primary address set forth below
its name on the appropriate signature page hereof or at such other address as
such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
------------------------------------------------
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored or payments made under any
Letters of Credit issued by it, interest on the amount paid by such Issuing
Lender in respect of each such drawing or payment from the date such drawing is
honored or payment is made to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B) at a rate equal to (a) for the period from
the date such drawing is honored or payment is made to but excluding the
applicable Reimbursement Date, the Base Rate plus the Applicable Margin with
----
respect to Base Rate Revolving Loans, and (b) thereafter, a rate which is 2% per
annum in excess of the rate of interest described in the foregoing clause (a).
Interest payable pursuant to this subsection 3.3D(i) shall be computed on the
basis of a 360-day year for the actual number of days elapsed in the period
during which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing or payment under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i), (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of the
period from the date of the applicable honored drawing or payment
72
<PAGE>
under a Letter of Credit issued by such Issuing Lender to but excluding the date
on which such Issuing Lender is reimbursed for the amount of such drawing or
payment (including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the Letter of Credit fee that would have been
payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been honored or payment had been made under
such Letter of Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such drawing or payment, such Issuing Lender shall distribute to each
other Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such drawing or payment such other Lender's Pro Rata Share of
any interest received by such Issuing Lender in respect of that portion of such
drawing or payment so reimbursed by other Lenders for the period from the date
on which such Issuing Lender was so reimbursed by other Lenders to and including
the date on which such portion of such drawing or payment is reimbursed by
Company. Any such distribution shall be made to a Lender at its Lending Office
set forth on Schedule 2.1 or at such other address as such Lender may request.
------------
3.4 Obligations Absolute.
--------------------
The obligation of Company to reimburse each Issuing Lender for
drawings honored or payments made under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), any Issuing Lender or other Lender
or any other Person or, in the case of a Lender, against Company whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Company
or one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a demand, draft or certificate or other
document which does not substantially comply with the terms of such Letter
of Credit;
73
<PAGE>
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
- --------
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
---------------
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing or other request for payment under any such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any
---------------------------------
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, such Issuing Lender shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
74
<PAGE>
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing or
payment under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including, without limitation,
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit .
-------------------------------------------------------
In the event that any law, treaty or governmental rule, regulation or
order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by any Issuing Lender or Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not having the
force of law):
(i) results in any change in the basis of taxation of such
Issuing Lender or Lender (or its applicable lending or letter of credit
office) (other than a change with respect to any Tax on the overall net
income of such Issuing Lender or Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or maintaining of
any participations therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered by any particular
Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including, without limitation, any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance
or similar requirement in respect of any Letters of Credit issued by any
Issuing Lender or participations therein purchased by any Lender; or
75
<PAGE>
(iii) imposes any other condition on or affecting such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (reasonably determined by such Issuing Lender or
Lender) as may be necessary to compensate such Issuing Lender or Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Such Issuing Lender or Lender shall deliver to Company a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Issuing Lender or Lender under this subsection 3.6, which
statement shall be prima facie evidence of such additional amounts.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Additional Tranche B Term Loans.
---------------------------------------------
The obligations of Lenders to make the Additional Tranche B Term Loans
are, in addition to the conditions precedent specified in subsection 4.2,
subject to prior or concurrent satisfaction of the following conditions:
A. Company Documents.
-----------------
On or before the Effective Date, Company shall deliver or cause to
be delivered to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Effective Date:
(i) Certified copies of its Certificate of Incorporation, together with a good
standing certificate from the Secretary of State of the State of Delaware and
each other state in which it is qualified as a foreign corporation to do
business, each dated a recent date prior to the Effective Date;
(ii) Copies of its Bylaws, certified as of the Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect without
modification or amendment;
(iii) Resolutions of its Board of Directors approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, certified as
76
<PAGE>
of the Effective Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of its officers executing this
Agreement and the other Loan Documents;
(v) Executed originals of this Agreement, the Subsidiary Guaranty, the
Mortgages, and the other Loan Documents to which it is a party; and
(vi) Such other documents as Agents may reasonably request.
B. No Material Adverse Effect. Since December 31, 1998, no Material
--------------------------
Adverse Effect (in the opinions of Administrative Agent or Lenders) shall have
occurred.
C. No Other Indebtedness Outstanding. Administrative Agent shall
---------------------------------
have received an Officers' Certificate of Company stating that, after giving
effect to the Lender's Bagels Acquisition, Loan Parties shall have no
Indebtedness outstanding other than Indebtedness permitted under the Loan
Documents.
D. Necessary Consents. Company shall have obtained all consents
------------------
necessary or advisable in connection with the Lender's Bagels Acquisition, the
Loan Documents and the continued operation of the business conducted by Company
and its Subsidiaries, and each of the foregoing shall be in full force and
effect and in form and substance satisfactory to Administrative Agent (except as
disclosed to and approved by Administrative Agent).
5. Consummation of Lender's Bagels Acquisition.
-------------------------------------------
(i) Administrative Agent shall have received executed or conformed copies of
the Lender's Bagels Acquisition Agreement and any amendments thereto and
documents executed in connection therewith;
(ii) the Lender's Bagels Acquisition Agreement shall be in full force and
effect and no material term or condition thereof shall have been amended,
modified or waived after the execution thereof except with the prior written
consent of the Administrative Agent;
(iii) the parties to the Lender's Bagels Acquisition Agreement shall not have
failed in any material respect to perform any material obligation or covenant
required by the Lender's Bagels Acquisition Agreement to be performed or
complied with by any of them on or before the Effective Date;
(iv) all conditions to the Lender's Bagels Acquisition set forth in the
Lender's Bagels Acquisition Agreement shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent of
the Administrative Agent;
(v) Administrative Agent shall have received evidence in form and substance
satisfactory to Administrative Agent that the Lender's Bagels Acquisition shall
become effective in accordance
77
<PAGE>
with the terms of the Lender's Bagels Acquisition Agreement immediately upon the
making of the Additional Tranche B Term Loans; and
(vi) Administrative Agent shall have received an Officer's Certificate of
Company to the effect set forth in clauses (i) - (v) above and stating that
Company will proceed to consummate the Lender's Bagels Acquisition immediately
upon the making of the Additional Tranche B Term Loans.
F. Collateral Access Agreements. Administrative Agent shall have
----------------------------
received from Company Collateral Access Agreements in form and substance
satisfactory to Administrative Agent with respect to any facility which
equipment of Company is located on the Effective Date. Company shall not own
interest in any real property on the Effective Date other than the real property
listed on Schedule 4.1F
G. Perfection of Security Interests in Personal Property and Mixed
---------------------------------------------------------------
Collateral. Company shall have taken or caused to be taken such actions in such
- ----------
a manner so that Administrative Agent has, for the benefit of Agents and
Lenders, a valid and perfected First Priority security interest in the entire
personal property and mixed Collateral. Such actions shall include, without
limitation: (i) the delivery pursuant to the applicable Collateral Documents of
(a) certificates (which certificates shall be properly endorsed in blank for
transfer or accompanied by irrevocable undated stock powers duly endorsed in
blank all in form and substance satisfactory to Administrative Agent)
representing all of the shares of capital stock required to be pledged pursuant
to the Collateral Documents, and (b) all promissory notes or other instruments
(duly endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral; (ii) delivery to Agents of (a) the results of
a recent search, by a Person satisfactory to Agents, of all effective Uniform
Commercial Code financing statements and fixture filings and all judgment and
tax lien filings which may have been made with respect to any additional
personal or mixed property of any Loan Party, together with copies of all such
filings disclosed by such search; (iii) the delivery to Administrative Agent of
Uniform Commercial Code financing statements and fixture filings executed by the
applicable Loan Parties as to all such Collateral granted by such Loan Parties
for all jurisdictions as may be necessary or desirable to perfect Administrative
Agent's security interest in such Collateral; (iv) the delivery to
Administrative Agent of all cover sheets or other documents or instruments
required to be filed with the PTO or the United States Copyright Office in order
to create or perfect Liens in respect of any additional IP Collateral or any
additional registered copyrights of Company; and (v) the delivery to
Administrative Agent of evidence reasonably satisfactory to Administrative Agent
that all other filings (including, without limitation, filings of Uniform
Commercial Code termination statements and termination statements with respect
to prior Liens on IP Collateral), recordings and other actions that
Administrative Agent deems necessary or advisable to establish, preserve and
perfect the First Priority Liens granted to Administrative Agent in personal and
mixed property shall have been made.
H. Opinions of Loan Parties' Counsel. Lenders and their respective
---------------------------------
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Richards & O'Neil, LLP, counsel for the Loan
Parties, in form and substance reasonably
78
<PAGE>
satisfactory to Administrative Agent and its counsel, dated as of the Effective
Date and setting forth substantially the matters in the opinion designated in
Exhibit XIV annexed hereto and as to such other matters as Administrative Agent
- -----------
acting on behalf of Lenders may reasonably request, including, without
limitation, as to no breach of any provision of the Subordinated Notes and as to
the Additional Tranche B Term Loans constituting "Senior Indebtedness" under and
as defined in the Subordinated Note Indentures, and (ii) evidence satisfactory
to Administrative Agent that Loan Parties have instructed such counsel to
deliver such opinion to Lenders.
I. Opinions of Agents' Counsel. Lenders shall have received (i)
---------------------------
originally executed copies of one or more favorable written opinions of Simpson
Thacher & Bartlett, counsel to Agents, dated as of the Effective Date,
substantially in the form of Exhibit XV annexed hereto and as to such other
----------
matters as Agents acting on behalf of Lenders may reasonably request and (ii)
originally executed copies of one or more favorable written opinions of Wildman,
Harrold, Allen & Dix, local counsel to the Agents, dated as of the Effective
Date and substantially in the form of Exhibit XVI hereto, as to such matters as
-----------
Agents acting on behalf of Lenders may request.
J. Fees. Company shall have paid to Agents, for distribution (as
----
appropriate) to Agents and Lenders, the fees payable on the Effective Date
referred to in subsection 2.3.
K. Financial Information; Pro Forma Consolidated Balance Sheet. On
-----------------------------------------------------------
or before the Effective Date, the Administrative Agent shall have received from
Company (i) satisfactory audited financial statements of Company for the year
ending December 31, 1998, (ii) a pro forma balance sheet and income statement of
the Company for the fiscal year ended, December 31, 1998 prepared in accordance
with GAAP and reflecting the consummation of the Lender's Bagels Acquisition,
which pro forma balance sheet and income statement shall each be in form and
substance satisfactory to the Administrative Agent and shall each be certified
by the chief financial officer of Company as (a) prepared on good faith
assumptions and on best information available to Company as of the date of
delivery thereof and (b) fairly representing on the pro forma basis the
financial position of the Company as at and for the fiscal year ending December
31, 1998, respectively, as adjusted as described in this clause (i), assuming
that such events had occurred at such date or at the beginning of such period,
respectively; and (iii) audited summary financial information with respect to
Lender's Bagels Business for the fiscal year ended December 31, 1998 and
unaudited summary financial information for the seven month period ended July
31, 1999.
L. Evidence of Insurance. Administrative Agent shall have received
---------------------
satisfactory certificates of insurance with respect to each of the insurance
policies required pursuant to subsection 6.4, and Agents shall be satisfied with
the nature and scope of these insurance policies.
M. Representations and Warranties; Performance of Agreements.
---------------------------------------------------------
Company shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true and correct in
all material respects on and as of the Effective Date to the
79
<PAGE>
same extent as though made on and as of that date and that Company shall have
performed in all material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied by them on or
before the Effective Date, except as otherwise disclosed to and agreed to in
writing by Administrative Agent.
N. Completion of Proceedings. All corporate and other proceedings
-------------------------
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and their counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
O. Evidence of Compliance with Conditions set forth in Section 4.2.
---------------------------------------------------------------
Administrative Agent shall have received satisfactory evidence that the
conditions set forth in Section 4.2 have been satisfied.
P. Real Property. Administrative Agent shall have received in form
-------------
and substance satisfactory to Administrative Agent all lien searches,
appraisals, mortgages and legal opinions that Administrative Agent requests in
connection with any real property acquired pursuant to the Lender's Bagels
Acquisition.
Q. Required Lenders. Administrative Agent shall have received duly
----------------
executed originals of this Agreement from (i) the Requisite Lenders, (ii)
Lenders holding more than 50% of the Tranche A Term Loans and (iii) Lenders
holding more than 50% of the Existing Tranche B Term Loans.
4.2 Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, signed by the chief executive officer, the chief
financial officer or the controller of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all material respects
on and as of that Funding Date to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on
and as of such earlier date;
80
<PAGE>
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such Notice
of Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
and the other Loan Documents provide shall be performed or satisfied by it
on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it, on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that has
not been disclosed by Company in writing and that is required to be so
disclosed pursuant to subsection 5.6 or 6.1(x) prior to the making of the
last preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no development
not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed that, in either event, in the
opinion of Administrative Agent or of Requisite Lenders, would be expected
to have a Material Adverse Effect; and no injunction or other restraining
order shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect to
any action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of,
the transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, signed by the chief executive officer, the chief
81
<PAGE>
financial officer or the controller of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Administrative Agent, together with all other
information specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lender to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date,
and on the date of issuance of each Letter of Credit, that the following
statements are true and correct:
5.1 Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries .
- ------------
A. Organization and Powers. Each Loan Party is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of its state of
incorporation. Each Loan Party has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents and to carry out
the transactions contemplated thereby. Company has all requisite corporate power
and authority to issue and pay the Notes.
B. Qualification and Good Standing. Each Loan Party is qualified to
-------------------------------
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified, authorized or in good
standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged
-------------------
only in the businesses permitted to be engaged in pursuant to subsection 7.11.
D. Company and Subsidiaries. All of the Subsidiaries of Company as
------------------------
of the Effective Date are identified in Schedule 5.1 annexed hereto. The
------------
capital stock of each of the Subsidiaries of Company identified in Schedule 5.1
------------
annexed hereto is duly authorized, validly issued, fully paid and nonassessable
and none of such capital stock constitutes Margin Stock. Company and each of
the Subsidiaries of Company identified in Schedule 5.1 annexed hereto are duly
------------
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or formation set forth therein, have
full corporate power and authority to own their assets and properties and to
operate their business as presently owned and
82
<PAGE>
conducted and as proposed to be conducted, and are qualified to do business and
in good standing in every jurisdiction where their assets are located and
wherever necessary to carry out their business and operations, in each case
except where failure to be so qualified or in good standing or a lack of such
corporate power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1 annexed hereto correctly sets forth the ownership interest
------------
of Company in each of its Subsidiaries identified therein.
E. Acquisitions. Each Loan Party shall have, upon consummation
------------
thereof, all requisite corporate power and authority to consummate, on the terms
set forth in the applicable acquisition agreement and related documents, each
Permitted Acquisition consummated by it pursuant to subsection 7.7(vi). Upon
consummation of any such Permitted Acquisition, such Permitted Acquisition shall
have been duly authorized by all necessary corporate action of such Loan Party.
5.2 Authorization of Borrowing, etc.
--------------------------------
A. Authorization of Borrowing. The execution, delivery and
--------------------------
performance of the Loan Documents and the Related Agreements and the issuance,
delivery and payment of the Notes have been duly authorized by all necessary
corporate or other action on the part of each of the Loan Parties thereto.
B. No Conflict. After giving effect to the consummation of the
-----------
transactions contemplated hereby to occur on the Effective Date, the execution,
delivery and performance by each of the Loan Parties of the Loan Document and
the Related Agreements to which they are parties, the issuance, delivery and
payment of the Notes and the consummation of the transactions contemplated by
the Loan Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of any Loan Party or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on any Loan Party or any of its Subsidiaries, (ii) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of any Loan Party or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of any Loan Party or any of its
Subsidiaries (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or partners or any approval or consent of any Person
under any Contractual Obligation of any Loan Party or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Effective Date.
C. Governmental Consents. The execution, delivery and performance by
---------------------
the Loan Parties of the Loan Documents and Related Agreements to which they are
party, the issuance, delivery and payment of the Notes and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other
83
<PAGE>
governmental authority or regulatory body except for such registrations,
consents, approvals, notices or other actions which will be made, obtained or
taken on or before the Effective Date.
D. Binding Obligation. Each of the Loan Documents and the Related
------------------
Agreements has been duly executed and delivered by each of the Loan Parties
party thereto and is the legally valid and binding obligation of each such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Company Common Stock and Subordinated Notes.
-------------------------------------------------------------
(i) Company Common Stock. The Company Common Stock, when issued and
--------------------
delivered, was duly and validly issued, fully paid and nonassessable. The
issuance and sale of such Company Common Stock either (a) were registered or
qualified under applicable federal and state securities laws or (b) were exempt
therefrom.
(ii) Subordinated Notes. Company had the corporate power and
------------------
authority to issue the Subordinated Notes. The Subordinated Notes are the
legally valid and binding obligations of Company, enforceable against Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Subordinated Note
Indentures, the Subordinated Notes and the other Subordinated Note Documents are
enforceable against the holders of the Subordinated Notes, and the Loans and all
other monetary Obligations hereunder are and will be within the definition of
"Senior Indebtedness" included in such provisions. The issuance and sale of the
Subordinated Notes either (a) were registered or qualified under applicable
federal and state securities laws or (b)were exempt therefrom.
5.3 Financial Condition.
-------------------
84
<PAGE>
A. Financial Statements. Company has heretofore delivered to the
--------------------
Administrative Agent, at Lenders' request, the following financial statements
and information: (i) audited financial statements of the Company for the year
ended December 31, 1998 (ii) satisfactory audited financial information of the
Lender's Bagels Business for the fiscal years ended December 31, 1997 and
December 31, 1998 and unaudited financial information for the Lender's Bagels
Business for the seven month period ended July 31, 1999, and (iii) a pro forma
balance sheet of Company as at, and an income statement of the Company for the
fiscal year ended, December 31, 1998 reflecting the consummation of the Lender's
Bagels Acquisition. All such financial statements have been prepared in
accordance with GAAP consistently applied throughout the period presented. At
the date of the most recent balance sheet referred to above, Company did not
have any material liability or material obligation which would be required to be
included in the financial statements referred to in this subsection in
accordance with GAAP which was not so included. Except as reflected in the
financial statements referred to in this subsection 5.3, except for the Lender's
Bagels Acquisition and the Sea Coast Acquisition and except as set forth on
Schedule 5.3 annexed hereto, during the period from December 31, 1998 to and
- ------------
including the date hereof there has been no sale, transfer or other disposition
by any Loan Party of any material part of its business or property, no material
liabilities were incurred by any Loan Party and there has been no purchase or
other acquisition of any business or property by any Loan Party material in
relation to the financial condition of Company at December 31, 1998.
5.4 No Material Adverse Change; No Restricted Junior Payments.
---------------------------------------------------------
Since December 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Company nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
7.5.
5.5 Title to Properties; Liens; Intellectual Property.
-------------------------------------------------
A. Company and its Subsidiaries have good, sufficient and legal title
to all of their respective properties and assets reflected in the financial
statements referred to in subsection 5.3 or in the most recent financial
statements delivered pursuant to subsection 6.1, except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets
are free and clear of Liens.
B. Company has acquired, pursuant to the Acquisition Agreement, that
which Seller has represented is the ownership of all patents, copyrights
(whether registered or unregistered), trademarks (whether registered or
unregistered), trade names, trade dress, service marks, assumed names and know-
how (such items, together with all applications therefor and all other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, being collectively referred to herein as
"MBW Intellectual Property") relating
85
<PAGE>
exclusively to, or used exclusively in connection with, the Business which (i)
are owned by Seller on December 31, 1996 and (ii) are necessary, together with
the rights licensed to Company under the Shared Technology License Agreement and
the Patent License Agreement, for the operation of the Business as conducted on
the Closing Date, except as set forth on Schedule 5.5B annexed hereto; provided,
------------- ---------
however, that such MBW Intellectual Property does not include any rights to the
- -------
brand name "Country Crock," "Pennant" or "Bakers Source."
C. Company has acquired, pursuant to the Log Cabin Acquisition
Agreement, that which Kraft has represented is the ownership of all patents,
copyrights (whether registered or unregistered), trademarks (whether registered
or unregistered), trade names, trade dress, service marks, assumed names and
know-how (such items, together with all applications therefor and all other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, being collectively referred to herein as
"Log Cabin Intellectual Property") relating exclusively to, or used exclusively
in connection with, the Log Cabin Business which (i) are owned by Kraft on July
1, 1997 and (ii) are necessary, together with the rights licensed to Company
under the Log Cabin Patent License Agreement, for the operation of the Log Cabin
Business as conducted on July 1, 1997, except as set forth on Schedule 5.5C
-------------
annexed hereto.
D. Company has acquired, pursuant to the Duncan Hines Acquisition
Agreement, that which P&G has represented is the ownership of all patents,
copyrights (whether registered or unregistered), trademarks (whether registered
or unregistered), trade names, trade dress, service marks, assumed names and
know-how (such items, together with all applications therefor and all other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, being collectively referred to herein as
"Duncan Hines Intellectual Property") relating exclusively to, or used
exclusively in connection with, the Duncan Hines Business which (i) are owned by
P&G on January 16, 1998 and (ii) are necessary, together with the rights
licensed to Company under the Duncan Hines Patent License Agreement, for the
operation of the Duncan Hines Business as conducted on July 1, 1998, except as
set forth on Schedule 5.5D annexed hereto.
-------------
E. Company has acquired all patents, copyrights (whether registered
or unregistered), trademarks (whether registered or unregistered), trade names,
trade dress, service marks, assumed names and know-how (such items, together
with all applications therefor and all other intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, being collectively referred to as "Van de Kamp's Intellectual
Property") necessary for the operation of Van de Kamp's as conducted on July 1,
1998, except as set forth on Schedule 5.5E annexed hereto.
-------------
F. Company has acquired all patents, copyrights (whether registered
or unregistered), trademarks (whether registered or unregistered), trade names,
trade dress, service marks, assumed names and know-how (such items, together
with all applications therefor and all other intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, being collectively referred to as "Sea Coast Intellectual Property")
necessary for the operation of Sea Coast as conducted on March 31, 1999, except
as set forth on Schedule 5.5F annexed hereto.
-------------
86
<PAGE>
G. Company has acquired all patents, copyrights (whether registered
or unregistered), trademarks (whether registered or unregistered), trade names,
trade dress, service marks, assumed names and know-how (such items, together
with all applications therefor and all other intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, being collectively referred to as "Lender's Bagels Intellectual
Property") necessary for the operation of Lender's Bagels as conducted on the
Effective Date, except as set forth on Schedule 5.5G annexed hereto.
-------------
H. Each Loan Party owns, or is licensed to use, all Intellectual
Property necessary for the operation of its business as conducted except for
Intellectual Property the failure to own or license which could not reasonably
be expected to have a Material Adverse Effect. No claim of which any Loan Party
has been given notice has been asserted and is pending by any Person challenging
or questioning the use by any Loan Party of any such Intellectual Property the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
5.6 Litigation: Adverse Facts.
--------------------------
There is no action, suit, proceeding, arbitration or governmental
investigation (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, either individually or in
the aggregate together with all other such actions, proceedings and
investigations, has had, or could reasonably be expected to result in, a
Material Adverse Effect. Neither Company nor any of its Subsidiaries is or has
been (i) in violation of any applicable law (including any Pure Food and Drug
Laws) that has had, or could reasonably be expected to result in, a Material
Adverse Effect or (ii) subject to or in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that has had, or could
reasonably be expected to result in, a Material Adverse Effect.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3, all material tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all material taxes, assessments, fees and
other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed tax assessment against Company or any of its Subsidiaries other than
those which are being actively contested by Company or such Subsidiary in good
faith and by appropriate proceedings and for which reserves or other appropriate
provisions, if any, as may be required in conformity with GAAP shall have been
made or provided therefor.
87
<PAGE>
5.8 Performance of Agreements; Materially Adverse Agreements; Material
------------------------------------------------------------------
Contracts.
- ---------
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected (based upon
assumptions that are reasonable at the time made) to result in, individually or
in the aggregate, a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
------------
the Material Contracts in effect on the Effective Date. All such Material
Contracts are in full force and effect and no defaults currently exist
thereunder, except where the failure to be in full force and effect, and except
for such defaults which, could not reasonably be expected to have a Material
Adverse Effect.
5.9 Governmental Regulation.
-----------------------
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
---------------------
Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
----------------------
A. Company and each of its ERISA Affiliates are in substantial
compliance with all applicable provisions and requirements of ERISA with respect
to each Employee Benefit Plan, and have substantially performed all their
obligations under each Employee Benefit Plan, except to the extent that any non-
compliance with ERISA or any such failure to perform would not result in
material liability of Company or any of its ERISA Affiliates.
B. No ERISA Event has occurred which has resulted or is reasonably
likely to result in any material liability to the PBGC or to any other Person.
88
<PAGE>
C. Except to the extent required under Section 4980B of the Internal
Revenue Code and/or Section 601 of ERISA, neither Company nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of Company or any of its Subsidiaries, except to the extent that the
provision of such benefits would not have a Material Adverse Effect.
D. No Pension Plan has an Unfunded Current Liability in an amount
that would have a Material Adverse Effect.
5.12 Certain Fees.
------------
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the loan transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13 Environmental Protection.
------------------------
(i) The operations of Company and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all Environmental Laws;
(ii) Company and each of its Subsidiaries have obtained all material
Governmental Authorizations under Environmental Laws necessary to their
respective operations, and all such Governmental Authorizations are in good
standing, and Company and each of its Subsidiaries are in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) Neither Company nor any of its Subsidiaries has received (a)
any notice or claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials or (b) any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ' 9604) or comparable state
laws, and, to the best knowledge of Company, none of the operations of Company
or any of its Subsidiaries is the subject of any federal or state investigation
relating to or in connection with any Hazardous Materials at any Facility or at
any other location;
(iv) None of the operations of Company or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging the violation of
or liability under any Environmental Laws which could reasonably be expected to
have a Material Adverse Effect;
89
<PAGE>
(v) To the knowledge of Company, neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order or agreement with any governmental authority or
private party relating to (a) any Environmental Laws or (b) any Environmental
Claims that could reasonably be expected to have a Material Adverse Effect;
(vi) Neither Company nor any of its Subsidiaries has any material
contingent liability in connection with any Release of any Hazardous Materials
by Company or any of its Subsidiaries;
(vii) Neither Company nor any of its Subsidiaries nor, to the
knowledge of Company, any predecessor of Company or any of its Subsidiaries has
filed any notice under any Environmental Law indicating past or present
treatment or Release of Hazardous Materials at any Facility, and none of
Company's or any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as defined
under 40 C.F.R. Parts 260-270 or any state equivalent;
(viii) To the knowledge of Company, no Hazardous Materials exist on or
under any Facility in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and neither Company
nor any of its Subsidiaries has filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(ix) Neither Company nor any of its Subsidiaries nor, to the
knowledge of Company, any of their respective predecessors has disposed of any
Hazardous Materials in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect;
(x) To the knowledge of Company, no underground storage tanks or
surface impoundments are on or at any Facility; and
(xi) To the knowledge of Company, no Lien in favor of any Person
relating to or in connection with any Environmental Claim has been filed or has
been attached to any Facility.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
--------
Each Loan Party is, and Company and its Subsidiaries, taken as a
whole, are, and, upon the incurrence of any Obligations by any Loan Party on any
date on which this representation is made, will be, Solvent.
90
<PAGE>
5.16 Matters Relating to Collateral.
------------------------------
A. Creation, Perfection and Priority of Liens. The execution and
------------------------------------------
delivery of the Collateral Documents by the Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1, 6.9
and 6.10 and (ii) the delivery to Administrative Agent of any Pledged Collateral
not delivered to Administrative Agent at the time of execution and delivery of
the applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Agents and Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Administrative Agent for filing (but not yet
filed) and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
---------------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been
------------------------------
filed in favor of Administrative Agent as contemplated by subsection 5.16A, (i)
no effective UCC financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO or the United States Copyright Office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant
------------------
to the Collateral Documents does not violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to any
--------------------------------
Agent by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
5.17 Related Agreements.
------------------
Company has delivered to Administrative Agent complete and correct
copies of each Related Agreement and of all exhibits and schedules thereto.
91
<PAGE>
5.18 Disclosure.
----------
The representations of Company and its Subsidiaries contained in the
Loan Documents, the Related Agreements and in any other document, certificate or
written statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, when taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact (known to Company or the
applicable Subsidiary, in the case of any document not furnished by Company or
such Subsidiary) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There is no fact known (or which should upon
the reasonable exercise of diligence be known) to Company (other than matters of
a general economic nature) that has had, or could reasonably be expected to
result in, a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
5.19 Subordination of Seller Notes.
-----------------------------
The subordination provisions of any Permitted Seller Notes, if any,
will be enforceable against the holders thereof, and the Loans and other
monetary obligations hereunder are and will be within the definition of "Senior
Indebtedness" included in such provisions.
5.20 Year 2000 Matters.
-----------------
Any reprogramming required to permit the proper functioning (but only
to the extent that such proper functioning would otherwise be impaired by the
occurrence of the year 2000) in and following the year 2000 of computer systems
and other equipment containing embedded microchips, in either case owned or
operated by Company or any of its Subsidiaries or used or relied upon in the
conduct of their business (including any such systems and other equipment
supplied by others or with which the computer systems of Company or any of its
Subsidiaries interface), and the testing of all such systems and other equipment
as so reprogrammed, was completed by September 30, 1999. The costs to Company
and its Subsidiaries that have not been incurred as of the date hereof for such
reprogramming and testing and for the other reasonably foreseeable consequences
to them of any improper functioning of other computer systems and equipment
containing embedded microchips due to the occurrence of the year 2000 are not
expected to result in a Default or Event of Default or to have a Material
Adverse Effect. Except for any reprogramming referred to above, the computer
systems of Company and its Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement to be, sufficient
for the conduct of their business as currently conducted.
92
<PAGE>
SECTION 6.
AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent (and Administrative
Agent will, after receipt thereof, deliver to each Lender):
(i) Monthly Financials: as soon as available and in any event
------------------
within 30 days after each fiscal month-end (other than March, June,
September and December) thereafter, the consolidated and consolidating
statements of income (through the "Earnings Before Tax" line) of Company
and its Subsidiaries for such fiscal month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the consolidated plan and financial forecast for the current
Fiscal Year delivered pursuant to subsection 6.1(xiii), all in reasonable
detail and certified by the chief financial officer of Company as being
fairly stated in all material respects, subject to changes resulting from
audit and normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any
--------------------
event within 45 days after the end of each Fiscal Quarter, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated and consolidating statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the previous
fiscal year and the corresponding figures from the consolidated plan and
financial forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report describing the
operations of
93
<PAGE>
Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
-------------------
event within 90 days after the end of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for such Fiscal Year, setting forth in each
case in comparative form the corresponding figures for the previous fiscal
year and the corresponding figures from the consolidated plan and financial
forecast delivered pursuant to subsection 6.1(xiii) for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form prepared for presentation to senior management for such Fiscal Year,
and (c) in the case of such consolidated financial statements, a report
thereon of independent certified public accountants of recognized national
standing selected by Company and reasonably satisfactory to Administrative
Agent, which report shall be unqualified as to the ability of Company and
its Subsidiaries to continue as a going concern and as to scope of audit,
and shall state that such consolidated financial statements fairly present,
in all material respects, the consolidated financial position of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;
(iv) Officer's and Compliance Certificates: together with
-------------------------------------
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's Certificate
of Company stating that the signer has reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto; and
(b) a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance
with such restrictions is required to be tested during or at the end of the
applicable accounting period;
94
<PAGE>
(v) Reconciliation Statements: if, as a result of any change
-------------------------
in accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1
will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had
no such change in accounting principles and policies been made, then (a)
together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal
Year in which such change is made, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences which would have resulted
if such financial statements had been prepared without giving effect to
such change;
(vi) Accountants' Certification: together with each delivery
--------------------------
of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon stating whether, in
connection with their audit examination, any condition or event, insofar as
such condition or event relates to the covenants set forth in subsection
7.6, that constitutes an Event of Default or Potential Event of Default has
come to their attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof; provided
--------
that such accountants shall not be liable by reason of any failure to
obtain knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination;
(vii) Accountants' Reports: promptly upon receipt thereof
--------------------
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including, without limitation, any comment letter submitted by such
accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
------------------------------
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by Company to
its security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases
and other statements made available
95
<PAGE>
generally by Company or any of its Subsidiaries to the public concerning
material developments in the business of Company or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
-----------------------
Company obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that is required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
-------------------------------
officer of Company obtaining knowledge of the institution of, or non-
frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against
or affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or Administrative Agent any
material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within 45 days after the end of each Fiscal
Quarter, a schedule of all Proceedings involving an alleged liability of,
or claims against or affecting, Company or any of its Subsidiaries equal to
or greater than $1,000,000 and promptly after request by Administrative
Agent such other information as may be reasonably requested by
Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
96
<PAGE>
(xi) ERISA Events: promptly upon becoming aware of the
------------
occurrence of any ERISA Event that could reasonably be expected to result
in a material liability, a written notice specifying the nature thereof,
what action Company or any of its ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
-------------
(a) all written notices received by Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (b) such
other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as available and in any event
---------------
no later than 90 days after the beginning of Fiscal Year 1999, and
thereafter as soon as practicable and in any event no later than 60 days
after the beginning of each subsequent Fiscal Year, a monthly consolidated
and consolidating plan and financial forecast for such Fiscal Year,
including, without limitation, (a) forecasted consolidated and
consolidating balance sheets and forecasted consolidated and consolidating
statements of income and cash flows of Company and its Subsidiaries for
such Fiscal Year, together with a pro forma Compliance Certificate for such
---------
Fiscal Year and an explanation of the assumptions on which such forecasts
are based, and (b) such other information and projections as Administrative
Agent may reasonably request;
(xiv) Insurance: upon request by Administrative Agent, as soon
---------
as practicable and in any event not less than once each Fiscal Year, a
report in form and substance satisfactory to Administrative Agent outlining
all material insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance coverage planned to
be maintained by Company and its Subsidiaries in the immediately succeeding
Fiscal Year;
(xv) Environmental Audits and Reports: as soon as practicable
--------------------------------
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, with respect to significant environmental matters
at any Facility or which relate to an Environmental Claim which could
result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness, written
------------------
notice of any change in the Board of Directors of Company;
(xvii) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company and
(b) all of the data required to be set forth in Schedule 5.1 annexed hereto
------------
with respect to all Subsidiaries of
97
<PAGE>
Company (it being understood that such written notice shall be deemed to
supplement Schedule 5.1 annexed hereto for all purposes of this Agreement);
------------
and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 Corporate Existence, etc.
-------------------------
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to the
business of Company and its Subsidiaries (on a consolidated basis).
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes and all assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
--------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings timely instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person other than a Subsidiary consolidated with the Company.
6.4 Maintenance of Properties; Insurance.
------------------------------------
Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. Each such
policy of casualty insurance covering damage to or loss of property shall name
Administrative Agent for the benefit of Agents and Lenders as the loss payee
thereunder for all losses, subject to application of proceeds as required by
subsection 2.4B(iii)(d), and shall provide for at least 30
98
<PAGE>
days' prior written notice to Administrative Agent of any modification or
cancellation of such policy.
6.5 Inspection; Lender Meeting.
--------------------------
Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by any Agent or Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
its and their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their officers independent public accountants, all upon reasonable
advance notice and at such reasonable times during normal business hours and as
often as may be reasonably requested. Without in any way limiting the foregoing,
Company will, upon the request of Administrative Agent, participate in a meeting
of Agents and Lenders once during each Fiscal Year to be held at Company's
corporate offices (or such other location as may be agreed to by Company and
Administrative Agent) at such time as may be agreed to by Company and
Administrative Agent.
6.6 Compliance with Laws, etc.
--------------------------
Company shall, and shall cause each of its Subsidiaries to, comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Pure Food and Drug Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect.
6.7 Environmental Disclosure and Inspection.
---------------------------------------
A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply and cause (i) all tenants under
any leases or occupancy agreements affecting any portion of the Facilities and
(ii) all other Persons on or occupying such property, to comply with all
Environmental Laws.
B. Company agrees that Administrative Agent may, from time to time
and in its reasonable discretion, retain, at Company's expense, an independent
professional consultant to review any report relating to Hazardous Materials
prepared by or for Company and to conduct its own investigation of any Facility
currently owned, leased, operated or used by Company or any of its Subsidiaries,
and Company agrees to use all reasonable efforts to obtain permission for
Administrative Agent's professional consultant to conduct its own investigation
of any such Facility previously owned, leased, operated or used by Company or
any of its Subsidiaries. Company shall use its reasonable efforts to obtain for
Administrative Agent and its agents, employees, consultants and contractors the
right, upon reasonable notice to Company, to enter into or on to the Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
to perform such tests on such property as are reasonably necessary to conduct
such a review and/or investigation. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing
99
<PAGE>
operations at any such Facility or to cause any damage or loss to any property
at such Facility. Company and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 6.7B will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees to
deliver a copy of any such report to Company with the understanding that Company
acknowledges and agrees that (i) it will indemnify and hold harmless each Agent
and Lender from any costs, losses or liabilities relating to any Loan Party's
use of or reliance on such report, (ii) no Agent nor any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, no Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
C. Company shall promptly advise Administrative Agent in writing and
in reasonable detail of (i) any Release of any Hazardous Materials required to
be reported to any federal, state, local or foreign governmental or regulatory
agency under any applicable Environmental Laws, (ii) any and all written
communications with respect to any Environmental Claims that have a reasonable
possibility of giving rise to a Material Adverse Effect or with respect to any
Release of Hazardous Materials required to be reported to any federal, state or
local governmental or regulatory agency, (iii) any remedial action taken by
Company or any other Person in response to (x) any Hazardous Materials on, under
or about any Facility, the existence of which has a reasonable possibility of
resulting in an Environmental Claim having a Material Adverse Effect, or (y) any
Environmental Claim that could have a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could cause such Facility or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use thereof under any Environmental Laws, and (v) any request for information
from any governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for a Release
of Hazardous Materials.
D. Company shall promptly notify Administrative Agent of (i) any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Company or any of its
Subsidiaries and (ii) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing, industrial or other similar operations
that could reasonably be expected to subject Company or any of its Subsidiaries
to additional laws, rules or regulations, including, without limitation, laws,
rules and regulations requiring additional environmental permits or licenses.
E. Company shall, at its own expense, provide copies of such
documents or information as Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection 6.7.
100
<PAGE>
6.8 Company's Remedial Action Regarding Hazardous Materials.
-------------------------------------------------------
Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on or under any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations unless the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. In
the event Company or any of its Subsidiaries takes any remedial action with
respect to any Hazardous Materials on or under any Facility, Company or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's or such
Subsidiary's liability for such presence, storage, use, disposal, transportation
or Release of any Hazardous Materials is being contested in good faith by
Company or such Subsidiary.
6.9 Execution of Subsidiary Guaranty and Subsidiary Security Agreements by
----------------------------------------------------------------------
Subsidiaries and Future Subsidiaries.
------------------------------------
In the event that any Person becomes a Subsidiary of Company after the
date hereof, Company will promptly notify Administrative Agent of that fact and
cause each such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty, the Pledge Agreement and the Security
Agreement and a new patent and trademark agreement substantially similar to the
Patent and Trademark Security Agreement, the Log Cabin Patent and Trademark
Security Agreement, the Duncan Hines Patent and Trademark Security Agreement,
the Van de Kamp's Patent and Trademark Security Agreement, the Sea Coast Patent
and Trademark Security Agreement and the Lender's Bagels Patent and Trademark
Security Agreement (collectively, the "Subsidiary Security Agreements"), and to
take all such further actions and execute all such further documents and
instruments as may be required to grant and perfect in favor of Administrative
Agent, for the benefit of Lenders, a First Priority security interest in all of
the personal property assets of such Subsidiary described in the Subsidiary
Security Agreements. Company shall deliver to Administrative Agent, together
with such Loan Documents, (i) certified copies of such Subsidiary's Articles or
Certificate of Incorporation (or comparable constituent documents), together, if
applicable, with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy, if applicable, of such
Subsidiary's Bylaws, certified by its corporate secretary or an assistant
corporate secretary as of a recent date prior to their delivery to
Administrative Agent, (iii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the incumbency and signatures
of the officers of such Subsidiary executing the Subsidiary Guaranty and to
which such Subsidiary is a party and (b) the fact that the attached resolutions
of the Board of Directors of such Subsidiary authorizing the execution, delivery
and performance of the Subsidiary Guaranty and the Subsidiary Security
Agreements to which such Subsidiary is a party are in full force and effect and
have not been modified or rescinded, and (iv) a favorable opinion of counsel to
such Subsidiary, in form and substance satisfactory to Administrative Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of the Subsidiary Guaranty and the Subsidiary Security Agreements to which such
101
<PAGE>
Subsidiary is a party, (c) the enforceability of the Subsidiary Guaranty and the
Subsidiary Security Agreements to which such Subsidiary is a party against such
Subsidiary, and (d) such other matters as Administrative Agent may reasonably
request, all of the foregoing to be reasonably satisfactory in form and
substance to Administrative Agent and its counsel.
6.10 Conforming Leasehold Interests; Matters Relating to Additional Real
-------------------------------------------------------------------
Property Collateral.
- -------------------
A. Conforming Leasehold Interests. If Company or any of its
------------------------------
Subsidiaries acquires any Leasehold Property, Company shall, or shall cause such
Subsidiary to, use its best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
B. Additional Mortgages, etc. From and after the Closing Date, in
--------------------------
the event that (i) Company or any Subsidiary Guarantor acquires any fee interest
in real property or any Leasehold Property (other than a fee interest in a Real
Property Asset or Leasehold Property with a value of $500,000 or less) or (ii)
at the time any Person becomes a Subsidiary Guarantor, such Person owns or holds
any fee interest in real property or any Leasehold Property (other than a fee
interest in a Real Property Asset or Leasehold Property with a value of $500,000
or less), in either case excluding any such Real Property Asset the
encumbrancing of which requires the consent of any applicable lessor or (in the
case of clause (ii) above) then-existing senior lienholder, where Company and
its Subsidiaries are unable to obtain such lessor's or senior lienholder's
consent (any such non-excluded Real Property Asset described in the foregoing
clause (i) or (ii) being a "Mortgaged Property"), Company or such Subsidiary
Guarantor shall deliver to Administrative Agent, as soon as practicable after
such Person acquires such Mortgaged Property or becomes a Subsidiary Guarantor,
as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized
-------------------
Mortgage in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering the interest of such Loan Party in
such Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel
-------------------
to such Loan Party, in form and substance satisfactory to Administrative
Agent and its counsel, as to the due authorization, execution and delivery
by such Loan Party of such Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Mortgaged Property is located with respect to the enforceability of the
form of Mortgage to be recorded in such state and such other matters
(including any matters governed by the laws of such state regarding
personal property security interests in respect of any Collateral) as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent;
102
<PAGE>
(iii) Landlord Consent and Estoppel; Recorded Leasehold
-------------------------------------------------
Interest. In the case of a Mortgaged Property consisting of a Leasehold
--------
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent,
---------------
an ALTA mortgagee title insurance policy or an unconditional commitment
therefor (a "Mortgage Policy") issued by the Title Company with respect to
such Mortgaged Property, in an amount satisfactory to Administrative Agent,
insuring fee simple title to, or a valid leasehold interest in, such
Mortgaged Property vested in such Loan Party and assuring Administrative
Agent that such Mortgage creates a valid and enforceable First Priority
mortgage Lien on such Mortgaged Property, subject only to a standard survey
exception, which Mortgage Policy (1) shall include an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Mortgage Policy and (ii)
paid to the Title Company or to the appropriate governmental authorities
all expenses and premiums of the Title Company in connection with the
issuance of the Mortgage Policy and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Mortgage in the appropriate real estate records;
(v) Title Report. If no Mortgage Policy is required with
------------
respect to such Mortgaged Property, a title report issued by the Title
Company with respect thereto, dated not more than 30 days prior to the date
such Mortgage is to be recorded and satisfactory in form and substance to
Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies
------------------------------------------------
of all recorded documents listed as exceptions to title or otherwise
referred to in the Mortgage Policy or title report delivered pursuant to
clause (v) or (vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Mortgaged Property is a Flood
Hazard Property and (2) if so, whether the community in which such Flood
Hazard Property is located is participating in the National Flood Insurance
Program, (b) if such Mortgaged Property is a Flood Hazard Property, such
Loan Party's written acknowledgment of receipt of written notification from
Administrative Agent (1) that such Mortgaged Property is a Flood Hazard
Property and (2) as to whether the community in which such Flood Hazard
Property is located is participating in the National Flood Insurance
Program, and (c) in the event such Mortgaged Property is a Flood Hazard
Property that is located in a community that participates in the National
Flood Insurance Program, evidence that Company has
103
<PAGE>
obtained flood insurance in respect of such Flood Hazard Property to the
extent required under the applicable regulations of the Board of Governors
of the Federal Reserve System; and
(viii) Environmental Audit. If required by Administrative
-------------------
Agent, reports and other information, in form, scope and substance
satisfactory to Administrative Agent and prepared by environmental
consultants satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Mortgaged Property.
6.11 Interest Rate Protection.
------------------------
Within 180 days after the Effective Date, Company shall enter into one
or more Interest Rate Agreements with respect to the Loans, in an amount of not
less than 50% of the aggregate amount of Consolidated Total Debt, which Interest
Rate Agreements shall have the effect of establishing a maximum interest rate of
not more than 10% per annum with respect to such notional principal amount, each
such Interest Rate Agreement to be in form and substance satisfactory to
Administrative Agent and with a term of not less than three years from the
Effective Date.
6.12 Further Assurances.
------------------
At any time or from time to time upon the request of Administrative
Agent, Company will, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as Administrative Agent
may reasonably request in order to effect fully the purposes of the Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement, the Notes and the other Loan Documents. In furtherance
and not in limitation of the foregoing, Company shall take, and cause each of
its Subsidiaries to take, such actions as Administrative Agent may reasonably
request from time to time (including, without limitation, the execution and
delivery of guaranties, security agreements, pledge agreements, Mortgages, stock
powers, financing statements and other documents, the filing or recording of any
of the foregoing, title insurance with respect to any of the foregoing that
relates to an interest in real property, the delivery of stock certificates and
other collateral with respect to which perfection is obtained by possession, and
the obtaining of Collateral Access Agreements, in form and substance
satisfactory to Administrative Agent, executed by any Person which is party to a
co-packing agreement with Company or any of its Subsidiaries under which
equipment of Company or its Subsidiaries is maintained at a facility of such
Person) to ensure that the Obligations are guarantied by Subsidiary Guarantors
and are secured by substantially all of the assets of Company and its
Subsidiaries and all of the capital stock of Company and Subsidiary Guarantors.
In the event that Company or any of its Subsidiaries creates a new Subsidiary,
all of the capital stock or partnership interests of such new Subsidiary shall
be duly and validly pledged to Administrative Agent for the benefit of Agents
and Lenders pursuant to the Collateral Documents, subject to no other Liens.
SECTION 7.
104
<PAGE>
NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 Indebtedness.
------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished
(other than any such Indebtedness corresponding to extinguished Contingent
Obligations permitted under subsections 7.4(i)(b));
(iii) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness (a) under Capital Leases capitalized on the
consolidated balance sheet of Company as liabilities, (b) in respect of
sale and lease-back transactions expressly permitted under subsection 7.8
and (c) secured by Liens permitted under subsection 7.2A(iii); provided
--------
that the aggregate amount of Indebtedness permitted under this clause (iii)
shall not exceed $15,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its domestic Wholly Owned Subsidiaries, and any
domestic Wholly Owned Subsidiary of Company may become and remain liable
with respect to Indebtedness to Company or any other domestic Wholly Owned
Subsidiary of Company, provided that (a) all such intercompany Indebtedness
--------
shall be evidenced by promissory notes, (b) all such intercompany
Indebtedness owed by Company to any of its respective Subsidiaries shall be
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement, in each case in form and substance satisfactory to
Administrative Agent, and (c) any payment by Company or by any Subsidiary
of Company under any guaranty of the Obligations shall result in a pro
---
tanto reduction of the amount of any intercompany Indebtedness owed by
-----
Company or by such Subsidiary to Company or to any of its Subsidiaries for
whose benefit such payment is made;
105
<PAGE>
(v) Company may become and remain liable with respect to
Indebtedness under the Subordinated Note Documents;
(vi) Company may become and remain liable with respect to
Indebtedness the proceeds of which are applied to refinance all or a
portion of the Term Loans, the Revolving Loans and the Subordinated Notes;
provided, that such Indebtedness shall be subordinated in right of payment
--------
to the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms which taken as a whole are no less
favorable to Company, its Subsidiaries and Lenders than the corresponding
terms of the Subordinated Note Documents, with interest payable thereon in
amounts consistent with the then prevailing rate in the market for
comparable debt Securities;
(vii) Company may become and remain liable with respect to
Permitted Seller Notes; provided that the aggregate principal amount of
--------
such Permitted Seller Notes issued after the Closing Date shall not exceed
$10,000,000; and
(viii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal amount
not to exceed at any time outstanding $25,000,000.
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Company shall not, and shall not permit any
--------------------
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement, or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted by subsection
7.1(iii)(c) incurred (a) to finance the acquisition, construction or
improvement of any tangible personal property assets, provided that (1)
--------
such Liens shall be created within 180 days after the acquisition,
construction or improvement of such assets, and (2) the principal amount of
Indebtedness secured by any such Liens shall at no time exceed 100%, and
the proceeds of such Indebtedness shall be used to provide not less than
80%, of the original purchase price of such asset or the amount expended to
construct or improve such asset, as the case may be; or (b) to renew,
extend or refinance any Indebtedness described in clause (a), provided that
--------
the amount of any such Indebtedness does not exceed the
106
<PAGE>
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; provided, that in the case of clause (a) or (b) such Liens
attach solely the assets financed with such Indebtedness;
(iv) Liens on any asset securing Indebtedness permitted by
Section 7.1(iii)(b); provided that (a) the proceeds of such Indebtedness
--------
shall be at least equal to 80% of the fair market value (as determined in
good faith by the Board of Directors, or any duly authorized committee
thereof, of Company) of such asset and (b) at the time of incurrence of
such Indebtedness, no Event of Default shall have occurred and be
continuing or would result therefrom;
(v) Liens on assets held under Capital Leases permitted under
subsection 7.1(iii)(a); and
(vi) Other Liens on assets of Company and its Subsidiaries
securing Indebtedness in an aggregate amount not to exceed $2,500,000 at
any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of its
----------------------------------
Subsidiaries shall create or assume any consensual Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
--------
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
---------------------------
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien which secures the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
---------------------------------------------------------------
Subsidiaries. Except as provided herein Company will not, and will not permit
- ------------
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
107
<PAGE>
7.3 Investments; Joint Ventures.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.6D;
(iv) Company and its Subsidiaries may make and own Investments
in connection with a Permitted Acquisition;
(v) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $7,500,000.
7.4 Contingent Obligations.
----------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations arising under (a) their respective
Guaranties and (b) guarantees of Indebtedness under the Subordinated Note
Documents or permitted under subsection 7.1(vi);
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements entered into (a) with
Lenders or Affiliates of Lenders with respect to which the aggregate net
amount which Company would be liable to pay to counterparties thereunder in
the event all such Interest Rate Agreements were terminated at the time of
determination shall not exceed $2,500,000 at any time and (b) as required
under subsection 6.11 herein;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in the
ordinary course of business in connection with Asset Sales or other sales
of assets;
108
<PAGE>
(v) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the ordinary
course of business of the obligations of suppliers, landlords, customers,
franchisees and licensees of Company and its Subsidiaries in an aggregate
amount not to exceed at any time $1,000,000;
(vi) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under food product futures
arrangements consistent with past practices of the Business, the Log Cabin
Business, the Duncan Hines Business, Sea Coast, Lender's Bagels Business
and Van de Kamp's and of any business acquired under subsection 7.7(vi) for
the supply of food products used in the business of Company and its
Subsidiaries; and
(vii) Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the maximum
--------
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $1,000,000.
7.5 Restricted Junior Payments.
--------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that (i) Company may make scheduled interest
--------
payments in respect of the Subordinated Notes in accordance with the terms
thereof and of the Subordinated Note Indentures; provided, that to the extent
--------
the Subordinated Note Indentures permit Company to pay interest thereon or
liquidated damages in like-kind instruments in a principal amount equal to the
amount of such interest or liquidated damages, Company shall pay such interest
or liquidated damages in such like-kind instruments; (ii) Company may make
Restricted Junior Payments to the extent necessary to redeem or defease all or
any portion of the Indebtedness under the Subordinated Note Documents with
proceeds from Indebtedness permitted under subsection 7.1(vi); (iii) Company may
make scheduled interest payments in respect of Permitted Seller Notes permitted
under subsection 7.1(vii) in accordance with the terms of such Permitted Seller
Notes; (iv) Company may make regularly scheduled payments of interest in respect
of any Subordinated Indebtedness in accordance with the terms of, and only to
the extent required by, and subject to the subordination provisions contained
in, the indenture or other agreement pursuant to which such Subordinated
Indebtedness was issued, as such indenture or other agreement may be amended
from time to time to the extent permitted under subsection 7.12B; provided, that
--------
to the extent the terms of such Subordinated Indebtedness permit Company to pay
interest or liquidated damages on such Subordinated Indebtedness in like-kind
instruments in a principal amount equal to the amount of such interest or
liquidated damages, Company shall pay such interest or liquidated damages with
such like-kind instruments; (v) Company may make Restricted Junior Payments to
the extent necessary to redeem or defease all or any portion of the Indebtedness
under the Subordinated Note Documents, provided that (a) no Event of Default or
--------
Potential Event of Default shall have occurred and be continuing or shall be
caused thereby, (b) Company shall be in compliance, on a pro forma basis giving
effect thereto, with the covenants set forth in subsection 7.6 hereof, (c) the
Senior Leverage Ratio (calculated on a pro forma basis giving
109
<PAGE>
effect to such redemption or defeasance) shall be less than 3.75:1.00 if such
redemption or defeasance shall occur in 1998 or 1999, less than 3.50:1.00 if
such redemption or defeasance shall occur in 2000 or 2001, and less than 3.25:
1.00 if such redemption or defeasance shall occur thereafter, (d) after giving
effect to any such redemption or defeasance, the sum of (x) the amount of cash
on hand of Company plus (y) the amount by which the Revolving Credit Commitments
----
exceed the Total Utilization of the Revolving Loan Commitments, shall equal or
exceed $40,000,000 (and Company shall have delivered to Administrative Agent an
Officer's Certificate (together with supporting information therefor), in form
and substance reasonably satisfactory to Administrative Agent, certifying to the
effect of clauses (b), (c) and (d)) and (e) and the aggregate amount of such
redemption or defeasance, together with any other such redemption or defeasance
since July 1, 1998, shall not exceed $100,000,000 plus the applicable premium;
and (vi) Company may make dividends or other distributions, direct or indirect,
on account of any shares of any class of capital stock of Company; provided that
--------
(a) the Senior Leverage Ratio (calculated on a pro forma basis giving effect
thereto) shall be less than 2.00:1.00 or (b) either of the publicly announced
ratings S&P or Moody's of the current senior unsecured, non-credit enhanced long
term Indebtedness of Company that has been publicly issued are BBB-or better or
Baa3 or better, respectively, and the amount of such dividend shall not exceed
50% of Company's cumulative positive net income.
7.6 Financial Covenants.
-------------------
A. Minimum Consolidated Cash Interest Coverage Ratio. Company shall
-------------------------------------------------
not permit the Consolidated Cash Interest Coverage Ratio for any four-Fiscal
Quarter period ending during any of the test periods set forth in the table
below to be less than the correlative ratio for such test period set forth in
the table below:
<TABLE>
<CAPTION>
------------------------------------------------------------------
MINIMUM CONSOLIDATED
TEST PERIOD CASH INTEREST COVERAGE
RATIO
-----------------------------------------------------------------
<S> <C>
7/01/98 - 12/31/98 1.90:1.00
-----------------------------------------------------------------
1/01/99 - 12/31/99 2.00:1.00
-----------------------------------------------------------------
1/01/00 - 12/31/00 2.00:1.00
-----------------------------------------------------------------
1/01/01 - 12/31/01 2.25:1.00
-----------------------------------------------------------------
1/01/02 - 12/31/02 2.50:1.00
-----------------------------------------------------------------
1/01/03 - 12/31/03 2.50:1.00
-----------------------------------------------------------------
1/01/04 - 12/31/04 2.50:1.00
-----------------------------------------------------------------
1/01/05 - 6/30/07 2.50:1.00
=================================================================
</TABLE>
110
<PAGE>
B. Maximum Leverage Ratio. Company shall not permit the ratio of (i)
----------------------
the excess of (a) Consolidated Total Debt as of the last day of any Fiscal
Quarter ending during any of the test periods set forth in the table below minus
(b) cash on hand of Company to the extent the amount of such cash exceeds
$3,500,000 as of such date, to (ii) Consolidated EBITDA for the four-Fiscal
Quarter period ending on such date to exceed the correlative ratio for such test
period set forth in the table below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
MAXIMUM
TEST PERIOD LEVERAGE RATIO
-------------------------------------------------------------------
<S> <C>
7/01/98 - 12/31/98 5.70:1.00
-------------------------------------------------------------------
1/01/99 - 12/31/99 5.50:1.00
-------------------------------------------------------------------
1/01/00 - 12/31/00 5.00:1.00
-------------------------------------------------------------------
1/01/01 - 12/31/01 4.50:1.00
-------------------------------------------------------------------
1/01/02 - 12/31/02 4.00:1.00
-------------------------------------------------------------------
1/01/03 - 12/31/03 3.50:1.00
-------------------------------------------------------------------
1/01/04 - 6/30/04 3.50:1.00
-------------------------------------------------------------------
7/01/04 - 6/30/07 3.00:1.00
===================================================================
</TABLE>
C. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
-----------------------------------
ratio of (i) Consolidated EBITDA for any four-Fiscal Quarter period ending
during any of the test periods set forth in the table below to (ii) Consolidated
Fixed Charges for such four-Fiscal Quarter period to be less than the
correlative ratio for such test period set forth in the table below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
MINIMUM FIXED CHARGE
TEST PERIOD COVERAGE RATIO
-------------------------------------------------------------------
<S> <C>
7/01/98 - 12/31/98 1.10:1.00
-------------------------------------------------------------------
1/01/99 - 12/31/99 1.15:1.00
-------------------------------------------------------------------
1/01/00 - 12/31/00 1.15:1.00
-------------------------------------------------------------------
1/01/01 - 12/31/01 1.20:1.00
-------------------------------------------------------------------
1/01/02 - 12/31/02 1.20:1.00
-------------------------------------------------------------------
1/01/03 - 12/31/03 1.25:1.00
-------------------------------------------------------------------
1/01/04 - 12/31/04 1.25:1.00
-------------------------------------------------------------------
1/01/05 - 6/30/07 1.25:1.00
===================================================================
</TABLE>
111
<PAGE>
D. Maximum Consolidated Capital Expenditures. Company shall not, and
-----------------------------------------
shall not permit any of its respective Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
--------
Fiscal Year shall be increased by an amount equal to the excess, if any (but in
no event more than 50% of the Maximum Consolidated Capital Expenditures Amount
for the previous Fiscal Year), of the Maximum Consolidated Capital Expenditures
Amount for the previous Fiscal Year over the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
FISCAL YEAR MAXIMUM CONSOLIDATED CAPITAL
(OR PORTION THEREOF) EXPENDITURES AMOUNT
-----------------------------------------------------------------------
<S> <C>
Fiscal Year ending in December 1998 $40,000,000
and each Fiscal Year thereafter
-----------------------------------------------------------------------
</TABLE>
; provided, however, that for purposes of this subsection 7.6D, Consolidated
-------- -------
Capital Expenditures shall not include (i) expenditures not exceeding $7,500,000
in the aggregate incurred on or prior to December 31, 2000 related to the
Lender's Bagels Business (a) to relocate Company's assets and (b) to pay
transition related expenses in connection with the foregoing, (ii) expenditures
not exceeding $15,000,000 in the aggregate incurred on or prior to June 30, 1999
to relocate Company's assets related to the Duncan Hines Business and transition
related expenses in connection therewith and (iii) expenditures not exceeding
$5,000,000 in the aggregate incurred on or prior to December 31, 1998 related to
additional capital expenditure projects previously identified at Van de Kamp's.
E. Certain Calculations.
--------------------
(i) With respect to calculations of Consolidated Fixed Charges,
Consolidated EBITDA and Consolidated Cash Interest Expense for any four-Fiscal
Quarter period including the Effective Date (each such period being a "Pro
Forma Calculation Period"), such calculations shall be made on a pro forma
basis assuming, in each case, (a) that the Effective Date, the Lender's Bagels
Acquisition and the related borrowings by Company pursuant to this Agreement
occurred on the first day of the applicable Pro Forma Calculation Period; (b)
that Consolidated EBITDA and Consolidated Capital Expenditures for the three
applicable Fiscal Quarters ending prior to the Effective Date are as set forth
on Schedule 7.6E annexed hereto; and (c) that, with respect to calculations of
-------------
Consolidated Cash Interest Expense and each component of Consolidated Fixed
Charges other than Consolidated Capital Expenditures (Consolidated Cash Interest
Expense and each such component being, individually, a "Fixed Charge
Component"), the amount of each such Fixed Charge Component for the Pro Forma
Calculation Period for the three applicable Fiscal Quarters ending prior to the
Effective Date are as set forth on Schedule 7.6E annexed hereto.
-------------
112
<PAGE>
(ii) With respect to any period during which new Subsidiaries,
assets or businesses are acquired pursuant to subsection 7.7(vi), for purposes
of determining compliance with the financial covenants set forth in this
subsection 7.6, Consolidated EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Subsidiaries, assets or
businesses on a pro forma basis (including (x) any adjustments certified by the
chief financial officer of the Company, that would, in the reasonable
determination of the Company satisfy the requirements of Rule 11-02(a) of
Regulation S-X of the Securities Act as if included in a registration statement
filed with the Securities and Exchange Commission and (y) any other operating
expense reductions reasonably expected to result from any acquisition of stock
or assets if such expected reductions are (1) set forth in reasonable detail in
a plan approved by and set forth in resolutions adopted by the Board of
Directors of the Company, and (2) limited to operating expenses specified in
such plan (and, if any reductions are set forth in a range, the lowest amount of
such range) that would otherwise have resulted in the payment of cash within
twelve months after the date of consummation of such transaction, net of any
operating expenses (other than extraordinary items, non-recurring or temporary
charges and other similar one-time expenses) reasonably expected to be incurred
to implement such plan, and that are to be paid in cash during such twelve-month
period, certified by the chief financial officer of the Company) using the
historical financial statements of all entities or assets so acquired or to be
acquired and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated (i) as if such acquisition, and any
acquisitions which have been consummated during such period, and any
Indebtedness or other liabilities incurred in connection with any such
acquisition had been consummated or incurred at the beginning of such period
(and assuming that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans during such
period), and (a) otherwise in conformity with certain procedures to be agreed
upon between Administrative Agent and Company, all such calculations to be in
form and substance satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales.
-----------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, create any new Subsidiaries or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise any part of the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any substantial part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly owned Subsidiary Guarantor; provided that, in
--------
113
<PAGE>
the case of such a merger, Company or such wholly owned Subsidiary
Guarantor shall be the continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.6D;
(iii) Company and its Subsidiaries may acquire inventory,
equipment and other assets in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
--------
amount at least equal to the fair market value thereof (determined in good
faith by the board of directors of Company);
(v) Company and its Subsidiaries may make any Asset Sale of
assets that have, in the aggregate, a fair market value (determined in good
faith by the board of directors of Company) not in excess of 10% of
Consolidated EBITDA for the four-Fiscal Quarter period most recently ended
prior to such Asset Sale; provided that (x) the consideration received for
--------
such assets shall be in an amount at least equal to the fair market value
thereof (determined in good faith by the board of directors of Company);
(y) not less than 80% of the consideration received shall be cash; and (z)
the proceeds of such Asset Sales shall be applied as required by subsection
2.4B(iii)(a); and
(vi) Company or any Subsidiary of Company may make
acquisitions of assets and businesses (including acquisitions of the
capital stock or other equity interests of another Person), provided that:
--------
(a) immediately prior to and after giving effect to
any such acquisition, Company and its Subsidiaries shall be in
compliance with the provisions of subsection 7.11 hereof;
(b) after giving effect to any such acquisition, the
sum of (x) the amount of cash on hand of Company and its Subsidiaries
plus (y) the amount by which the Revolving Loan Commitments exceed the
----
Total Utilization of Revolving Loan Commitments, shall equal or exceed
$40,000,000;
(c) (1) Company shall be in compliance, on a pro forma
basis giving effect to the proposed acquisition, with the covenants
set forth in subsection 7.6 hereof, (2) the Senior Leverage Ratio
(calculated on a pro forma basis giving effect to the proposed
acquisition) shall be less than 3.75:1.00 in Fiscal Years 1998 and
1999, 3.50:1.00 in Fiscal Years 2000 and 2001, and 3.25:1.00
thereafter and (3) no Event of Default or Potential Event of Default
shall have occurred and be continuing at the time of such acquisition
or shall be caused thereby; and Company shall have delivered to
Administrative Agent an Officer's Certificate (together with
supporting information therefor), in form and
114
<PAGE>
substance reasonably satisfactory to Administrative Agent, certifying
as to the foregoing and as to the matters referred to in subsections
7.7(vi)(a) and (b) above;
(d) any assets acquired pursuant to such acquisition
shall be subject to a First Priority Lien in favor of the
Administrative Agent on behalf of Lenders pursuant to the Collateral
Documents; and
(e) each such acquisition shall be made on a fully
consensual basis between Company and its Subsidiaries, on the one
hand, and the seller or sellers of such assets or such business, on
the other hand.
7.8 Sales and Lease-Backs.
---------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (a) which Company or any of its Subsidiaries intends
to use for substantially the same purpose as any other property which has been
or is to be sold or transferred by Company or any of its Subsidiaries to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease, except that Company and its Subsidiaries may enter into such sale and
lease-back transactions so long as the aggregate sales price under all such
transactions in any Fiscal Year does not exceed $5,000,000.
7.9 Transactions with Shareholders and Affiliates.
---------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
--------
shall not apply to (i) any transaction between Company and any of its Wholly
Owned Subsidiaries or between any of its Wholly Owned Subsidiaries, (ii)
reasonable and customary fees paid to members of the boards of directors of
Company and its Subsidiaries, (iii) fees, expenses and other amounts payable to
the MDC Entities, Fenway, Dartford, UBS, Tiger and CALPERS on July 1, 1998, (iv)
the Management Fees, (v) any employment agreement entered into by Company or any
of its Subsidiaries in the ordinary course of business, (vi) amounts paid under
the Dartford Expense Agreement, and (vii) any issuance of capital stock of
Company in connection with employment arrangements, stock options and stock
ownership plans of Company or any of its Subsidiaries entered into in the
ordinary course of business.
7.10 Disposal of Subsidiary Stock.
----------------------------
115
<PAGE>
Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except as permitted under
this Agreement or the Collateral Documents or to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except as permitted under this Agreement or
the Collateral Documents or to Company, another Wholly Owned Subsidiary of
Company, or to qualify directors if required by applicable law.
7.11 Conduct of Business.
-------------------
Company shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than (i) the businesses engaged in by Company and
its Subsidiaries on the Effective Date and those food businesses which are
reasonably related to such businesses, and (ii) such other lines of business as
may be consented to by Administrative Agent and Requisite Lenders.
7.12 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated
Indebtedness; Designation of "Designated Senior Indebtedness";
Preferred Stock.
---------------------------------------------------
A. Amendments or Waivers of Certain Related Agreements. Neither
---------------------------------------------------
Company nor any of its Subsidiaries will agree to any material amendment to, or
waive any of its material rights under, any of the Acquisition Agreement, the
Log Cabin Acquisition Agreement, the Duncan Hines Acquisition Agreement, the Sea
Coast Acquisition Agreement, the Lender's Bagels Acquisition Agreement, the
Assumption Agreement, the Log Cabin Assumption Agreement, the Duncan Hines
Assumption Agreement, the MDC Advisory Agreement, the Dartford Advisory
Agreement, the Fenway Advisory Agreement, the Transition Agreements, the Log
Cabin Transition Agreements, the Duncan Hines Transition Agreements, the
Lender's Bagels Transition Agreement, the Gilster Co-Pack Agreement or the Red
Wing Co-Pack Agreements after the Effective Date (or the date such agreement
became effective in accordance with its terms) if such amendment or waiver would
be adverse to Lenders without in each case obtaining the prior written consent
of Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness.
-------------------------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments
116
<PAGE>
of principal or interest are due thereon, change any event of default or
condition to an event of default with respect thereto (other than to eliminate
any such event of default or increase any grace period related thereto), change
the redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obliger thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
C. Designation of "Designated Senior Indebtedness". Company shall
-----------------------------------------------
not designate any Indebtedness as "Designated Senior Indebtedness" (as defined
in the Subordinated Note Indentures) for purposes of the Subordinated Note
Indentures, without the prior written consent of Requisite Lenders.
D. Preferred Stock. Without the prior written approval of Requisite
---------------
Lenders, Company shall not amend, restate, supplement or otherwise modify its
Certificate of Incorporation if the effect of such amendment, restatement,
supplement or modification is to provide for the issuance of any preferred stock
of Company or the filing or amendment of any certificate of designation with
respect thereto.
7.13 Fiscal Year.
-----------
Company shall not change its Fiscal Year-end from December 31.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of prepayment
or otherwise; failure by Company to pay when due any amount payable to an
Issuing Lender in reimbursement of any drawing honored or payment made under a
Letter of Credit; or failure by Company to pay any interest on any Loan or any
fee or any other amount due under this Agreement within five days after the date
due; or
117
<PAGE>
8.2 Default in Other Agreements.
---------------------------
(i) Failure of Company or any of its Subsidiaries to pay when due
(a) any principal of or interest on any Indebtedness (other than Indebtedness
referred to in subsection 8.1) in an individual principal amount of $2,500,000
or more or any items of Indebtedness with an aggregate principal amount of
$5,000,000 or more or (b) any Contingent Obligation in an individual principal
amount of $2,500,000 or more or any Contingent Obligations with an aggregate
principal amount of $5,000,000 or more, in each case beyond the end of any grace
period provided therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) any evidence of any
Indebtedness in an individual principal amount of $2,500,000 or more or any
items of Indebtedness with an aggregate principal amount of $5,000,000 or more
or any Contingent Obligation in an individual principal amount of $2,500,000 or
more or any Contingent Obligations with an aggregate principal amount of
$5,000,000 or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), if in any
case under this clause (ii) the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 Breach of Certain Covenants.
---------------------------
Failure of Company to perform or comply with any term or condition
contained in subsection 2.4, 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
------------------
Any material representation, warranty, certification or other
statement made by Company or any of its Subsidiaries in any Loan Document or in
any statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
8.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company becoming aware of such default or (ii)
receipt by Company of notice from any Agent or Lender of such default; or
118
<PAGE>
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its Subsidiaries
(other than Immaterial Subsidiaries) in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Company or any of its Subsidiaries
(other than Immaterial Subsidiaries) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries
(other than Immaterial Subsidiaries), or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Company or any
of its Subsidiaries (other than Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries (other than Immaterial
Subsidiaries), and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
---------------------------------------------------
(i) Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries (other than Immaterial Subsidiaries) shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries (other than Immaterial Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Company or any of its
Subsidiaries (other than Immaterial Subsidiaries) (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,500,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
thereunder); or
119
<PAGE>
8.9 Dissolution.
-----------
Any order, judgment or decree shall be entered against Company or any
of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in
the aggregate results in a Material Adverse Effect; or there shall exist an
Unfunded Current Liability, individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which there is no Unfunded Current Liability), which would have a Material
Adverse Effect; or
8.11 Change in Control.
-----------------
Any Person (other than the MDC Entities, Dartford, Fenway, UBS, Tiger
and CALPERS), including a "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) which includes such Person, shall purchase or
otherwise acquire, directly or indirectly, beneficial ownership of Securities of
Company and, as a result of such purchase or acquisition, any Person (together
with its associates and Affiliates), shall directly or indirectly beneficially
own in the aggregate Securities representing more than 35% of the combined
voting power of Company voting Securities; or
8.12 Invalidity of Guaranties.
------------------------
At any time after the execution and delivery thereof, any Guaranty of
the Obligations of Company, for any reason other than the satisfaction in full
of all Obligations, ceases to be in full force and effect or is declared to be
null and void (except with respect to the obligations thereunder of Immaterial
Subsidiaries of Company) or any Loan Party (other than Immaterial Subsidiaries
of Company) denies in writing that it has any further liability, including,
without limitation, with respect to future advances by Lenders, under any Loan
Document to which it is a party; or
8.13 Failure of Security.
-------------------
Any Collateral Document shall, at any time, cease to be in full force
and effect (other than by reason of a release of Collateral thereunder in
accordance with the terms hereof or thereof, the satisfaction in full of the
Obligations or any other termination of such Collateral Document in accordance
with the terms hereof or thereof) or shall be declared null and void; or the
validity or enforceability thereof shall be contested in writing by any Loan
Party; or Agent shall not have or shall cease to have a valid security interest
in any Collateral purported to be covered thereby, perfected and with the
priority required by the relevant Collateral Document, for any reason other than
the failure of Agents or any Lender to take any action within its control,
subject only to Liens permitted under the applicable Collateral Documents; or
120
<PAGE>
8.14 Termination or Breach of Certain Transition Agreements.
------------------------------------------------------
The Duncan Hines Co-Pack Agreement, Red Wing Co-Pack Agreements or
the Flavor Supply Agreement shall terminate for any reason whatsoever or any
such party shall fail to perform its obligations under any such agreement and
such failure could reasonably be expected to result in a Material Adverse
Effect, and, in either case, Company shall not have made arrangements
satisfactory to Requisite Lenders for obtaining any services that are required
to be provided by any such party to Company under such agreement that are not
being so provided as a result of such termination or failure to perform; or
8.15 Default Under Subordination Provisions.
--------------------------------------
Company or any guarantor of Subordinated Indebtedness shall fail to
comply with the subordination provisions contained in the Subordinated Note
Indentures or any other instrument, indenture or agreement pursuant to which
such Subordinated Indebtedness is issued;
8.16 Failure to Deliver Financial Information
----------------------------------------
Company shall fail to deliver by January 15, 2000 a satisfactory
audited statement of the assets and liabilities acquired pursuant to the
Lender's Bagels Acquisition as of December 31, 1998 or Company shall fail to
deliver by January 15, 2000 a satisfactory audited statement of operations with
respect to Lender's Bagels for the fiscal year ended December 31, 1998;
THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit) and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any Loan,
the obligation of Administrative Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request of
Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (c) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
--------
obligations of Lenders under subsection 3.3C(i).
121
<PAGE>
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Lenders to a decision which may be made at
the election of Requisite Lenders and are not intended to benefit Company and do
not grant Company the right to require Lenders to rescind or annul any
acceleration hereunder or preclude Agents or Lenders from exercising any of the
rights or remedies available to them under any of the Loan Documents, even if
the conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
-----------
A. Chase is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Administrative Agent
to act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. NatWest is hereby appointed Syndication Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes Syndication
Agent to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. UBS AG is hereby appointed Documentation Agent hereunder
and under the other Loan Documents and each Lender hereby authorizes
Documentation Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Each Agent agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
B. Appointment of Supplemental Collateral Agents. It is the purpose
---------------------------------------------
of this Agreement and the other Loan Documents that there shall be no violation
of any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact
122
<PAGE>
business as agent or trustee in such jurisdiction. It is recognized that in case
of litigation under this Agreement or any of the other Loan Documents, and in
particular in case of the enforcement of any of the Loan Documents, or in case
Administrative Agent deems that by reason of any present or future law of any
jurisdiction Administrative Agent may not exercise any of the rights, powers or
remedies granted herein or in any of the other Loan Documents or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
coagent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers; General Immunity.
------------------------
A. Duties Specified. Each Lender irrevocably authorizes each Agent
----------------
to take such action on such Lender's behalf and to exercise such powers
hereunder and under the other Loan Documents as are specifically delegated to
such Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents, and it may perform such duties by or through its agents or
employees. No Agent shall have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary
123
<PAGE>
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be
-------------------------------------
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports or certificates or any
other documents furnished by any Agent to Lenders or by or on behalf of Company
and/or its Subsidiaries to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall have no liability arising from
confirmations of the amount of outstanding Loans or the Total Utilization of
Revolving Loan Commitments or the component amounts thereof
C. Exculpatory Provisions. Neither any Agent nor any of such Agent's
----------------------
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by such Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. If any Agent shall request instructions from Lenders
with respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from Requisite Lenders (or
such other Lenders as may be required to give such instructions under subsection
10.6). Without prejudice to the generality of the foregoing, (i) such Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against such Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Such Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under this Agreement or any of
the other Loan Documents unless and until it has obtained the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
124
<PAGE>
D. Agents Entitled to Act as Lender. The agency hereby created shall
--------------------------------
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Each Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company and/or its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 Representations and Warranties;
No Responsibility For Appraisal of Creditworthiness.
---------------------------------------------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or, except as expressly provided elsewhere in this Agreement, to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
- --------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
9.5 Successor Agents and Swing Line Lender.
--------------------------------------
A. Successor Agents. Any Agent may resign at any time by giving 30
----------------
days' prior written notice thereof to the other Agents, Lenders and Company, and
any Agent may be removed at any time with or without cause by an instrument or
concurrent instruments in writing
125
<PAGE>
delivered to Company and Administrative Agent and signed by Requisite Lenders.
Upon any such notice of resignation or any such removal, Requisite Lenders shall
have the right, upon five Business Days' notice to Company, to appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
---------------------------
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Chase or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VIII annexed hereto, in the
------------
principal amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 Collateral Documents.
--------------------
Each Lender and Agent hereby further authorizes Administrative Agent
to enter into each Collateral Document as secured party on behalf of and for the
benefit of Agents and Lenders and agrees to be bound by the terms of each
Collateral Document; provided that Administrative Agent shall not enter into or
--------
consent to any amendment, modification, termination or waiver of any provision
contained in any Collateral Document without the prior consent of Requisite
Lenders (or, if required pursuant to subsection 10.6, all Lenders); provided
--------
further, however, that, without further written consent or authorization from
- ------- -------
Requisite Lenders, Administrative Agent may execute any documents or instruments
necessary to effect the release of any asset constituting Collateral from the
Lien of the applicable Collateral Document in the event that such asset is sold
or otherwise disposed of in a transaction effected in accordance with subsection
7.7. Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
(including, without limitation, through the exercise of a right of set-off
against call deposits of such Lender in which any funds on deposit in the
Collateral Account may from time to time be invested), it being understood and
agreed that all rights and remedies under the Collateral Documents may be
exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof.
SECTION 10.
MISCELLANEOUS
126
<PAGE>
10.1 Assignments and Participations in Loans, Letters of Credit.
----------------------------------------------------------
A. General. Subject to subsection 10.1B, each Lender shall have the
-------
right at any time to (i) sell, assign, transfer or negotiate to any Eligible
Assignee, or (ii) sell participations to any Person in, all or any part of its
Commitments (together with its Letters of Credit or participations therein made
or arising pursuant to its Revolving Loan Commitment) or any Loan or Loans made
by it or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall, without
- --------
the consent of Company, require Company to file a registration statement with
the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided further, that no such sale, assignment or transfer described in clause
- -------- -------
(i) above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii); provided
--------
further, that no such sale, assignment, transfer or participation of any Letter
- -------
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation; and provided further, that anything
-------- -------
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or the
other Obligations owed to such Lender.
B. Assignments.
-----------
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit, or participation therein or other Obligation may (a) be assigned in
any amount to another Lender who is a Non-Defaulting Lender, to an Approved Fund
of a Non-Defaulting Lender, or to an Affiliate of the assigning Lender or
another Lender who, in either such case, is a Non-Defaulting Lender, with the
consent of Administrative Agent (which consent shall not be unreasonably
withheld) and the giving of notice to Company; provided that, after giving
--------
effect to a proposed assignment to another Lender, the assigning Lender shall
have an aggregate Commitment of at least $1,000,000 unless the proposed
assignment constitutes the aggregate amount of the Commitments, Loans, Letters
of Credit, and participations therein and other Obligations of the assigning
Lender, or (b) be assigned in an aggregate amount of not less than$1,000,000 (or
such lesser amount as shall constitute the aggregate amount of the Commitments,
Loans, Letters of Credit, and participations therein and other Obligations of
the assigning Lender) to any other Eligible Assignee with the consent of
Administrative Agent (which consent shall not be unreasonably withheld) and the
giving of notice to Company. To the extent of any such assignment in accordance
with either clause (a) or (b) above, the assigning
127
<PAGE>
Lender shall be relieved of its obligations with respect to its Commitments,
Loans, Letters of Credit, or participations therein or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall execute
and deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing fee of $3,500
payable by the assigning Lender and such certificates, documents or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the effective
date specified in such Assignment Agreement, (y) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and, in the case of
an Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto; provided that, anything contained in any of the Loan
--------
Documents to the contrary notwithstanding, if such Lender is the Issuing Lender
with respect to any outstanding Letters of Credit such Lender shall continue to
have all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters of Credit
and the reimbursement of any amounts drawn thereunder). The Commitments
hereunder shall be modified to reflect the Commitments of such assignee and any
remaining Commitments of such assigning Lender and, if any such assignment
occurs after the issuance of the Notes hereunder, the assigning Lender shall
surrender its applicable Notes and, upon such surrender, new Notes shall be
issued to the assignee and, if applicable, to the assigning Lender,
substantially in the form of Exhibit IV, Exhibit V , Exhibit VII or Exhibit VIII
---------- --------- ----------- ------------
annexed hereto, as the case may be, with appropriate insertions, to reflect the
new Commitments and/or outstanding Term Loans of the assignee and the assigning
Lender.
(ii) Acceptance by Administrative Agent: Recordation in Register.
------------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with the
processing fee referred to in subsection 10.1B(i) and any certificates,
documents or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent
shall, if such Assignment Agreement has been completed and is in substantially
the form of Exhibit XVII hereto and if Administrative Agent have consented to
------------
the assignment evidenced thereby (to the extent such consent is required
pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such assignment), (b)
record the information contained therein in the Register, and (c) give prompt
notice thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in this
subsection 10.1B(ii).
128
<PAGE>
C. Participations. The holder of any participation, other than an
--------------
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
(i) effecting the extension of the final maturity of the Loan allocated to such
participation, (ii) effecting a reduction of the principal amount of or
affecting the rate of interest payable on any Loan allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all of the Guarantors from their obligations under the
Guaranties, and all amounts payable by Company hereunder (including, without
limitation, amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as if such Lender had not sold such participation.
Company and each Lender hereby acknowledge and agree that, solely for purposes
of subsections 10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the
------------------------------------
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender (without having to obtain the consent of Company or
Administrative Agent) may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender and its Notes to secure obligations of
such Lender, including, without limitation, assignments and pledges to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and any Lender which is an investment fund
may pledge all or any portion of its Notes or Loans to its trustee, or other
representatives of holders of notes issued by such fund, or holders of
obligations owed by such fund, to secure its obligations to such trustee or
holders; provided that (i) no Lender shall, as between Company and such Lender,
be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning
-----------
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants).
F. Limitation. No assignee, participant or other transferee or any
----------
Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with Company's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
G. Representations of Lenders. Each Lender listed on the signature
--------------------------
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
129
<PAGE>
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
--------
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and out of pocket expenses of Administrative Agent in connection with the
preparation of the Loan Documents; (ii) all the actual and reasonable costs of
furnishing all opinions by counsel for Company (including, without limitation,
any opinions requested by Lenders as to any legal matters arising hereunder) and
of Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Agents (including allocated costs
of internal counsel) in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the Loans and any consents,
amendments, waivers or other modifications hereto or thereto and any other
documents or matters requested by Company; (iv) all other actual and reasonable
costs and expenses incurred by Agents in connection with the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; and (v) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by Agents
and Lenders in enforcing any Obligations of or in collecting any payments due
from Company hereunder or under the other Loan Documents by reason of such Event
of Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
---------
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders,
and the officers, directors, trustees, partners, employees, agents, attorneys
and affiliates of any of Agents and Lenders (collectively called the
"Indemnitees") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including, without limitation,
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of this Agreement or the other Loan Documents or the
transactions contemplated
130
<PAGE>
hereby or thereby (including, without limitation, Lenders' agreement to make the
Loans hereunder or the use or intended use of the proceeds of any of the Loans
or the issuance of Letters of Credit hereunder or the use or intended use of any
of the Letters of Credit) (collectively called the "Indemnified Liabilities");
provided that Company shall not have any obligation to any Indemnitee hereunder
- --------
with respect to any Indemnified Liabilities to the extent, and only to the
extent, of any particular liability, obligation, loss, damage, penalty, claim,
cost, expense or disbursement that arose from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Company shall contribute
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default each Lender is hereby authorized
by Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender (at any office of that
Lender wherever located) to or for the credit or the account of Company against
and on account of the obligations and liabilities of Company to that Lender
under this Agreement, the Notes, the Letters of Credit and participations
therein, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
each Agent and Lender a security interest in all deposits and accounts
maintained with such Agent or Lender as security for the Obligations.
10.5 Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents
131
<PAGE>
(collectively, the "Aggregate Amounts Due" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify Administrative Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
--------
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy reorganization or insolvency
proceeding of Company or otherwise, those purchases shall be rescinded and the
purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
10.6 Amendments and Waivers.
----------------------
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Company or any other Loan Party therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders; provided that any such
--------
amendment, modification, termination, waiver or consent which: reduces the
principal amount of any of the Loans; changes in any manner the definition of
"Requisite Lenders" (it being understood that, with the consent of the Requisite
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of "Requisite Lenders" on substantially the same
basis as the Tranche A Term Loan Commitments, Tranche A Term Loans, Tranche B
Term Loan Commitments, Tranche B Term Loans, Revolving Loan Commitments and
Revolving Loans are included on the Effective Date); changes in any manner any
provision of this Agreement which, by its terms, expressly requires the approval
or concurrence of all Lenders; postpones the scheduled final maturity date of
any of the Loans; postpones the date or reduces the amount of any scheduled
payment (but not prepayment) of principal of any of the Loans; postpones the
date or reduces the amount of any scheduled reduction (but not prepayment) of
the Revolving Loan Commitments; postpones the date on which any interest or any
fees are payable; decreases the interest rate borne by any of the Loans (other
than any waiver of any increase in the interest rate applicable to any of the
Loans pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; releases
all or substantially all of the Collateral; releases all or substantially all of
the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty;
reduces the amount or postpones the due date of any amount payable in respect
of, or extends the required expiration date of, any Letter of Credit; changes
the obligations of Lenders relating to the purchase of participations in Letters
of Credit in any manner that could be adverse to any Issuing Lender; or changes
in any manner the provisions
132
<PAGE>
contained in subsection 8.1 or this subsection 10.6; shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders to whom are owed
Obligations being directly affected by such amendment, modification,
termination, waiver or consent. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note, (iii) no
amendment, modification, termination or waiver of any provision of this
Agreement which disproportionately and adversely affects the obligation of any
Loan Party to make payments (including without limitation mandatory prepayments)
to the holders of the Term Loans or the holders of the Revolving Loans and
Revolving Loan Commitments, shall be effective without the written concurrence
of the holders of more than 50% in principal amount of the class (i.e., Tranche
A Term Loans, Tranche B Term Loans or Revolving Loans and Revolving Loan
Commitments each being a "class" of Loans) of Loans so disproportionately and
adversely affected; (iv) no increase in the Commitments of any Lender over the
amount thereof then in effect shall be effective without the written concurrence
of that Lender, it being understood and agreed that in no event shall waivers or
modifications of conditions precedent, covenants, Events of Default, Potential
Events of Default or of a mandatory prepayment or a reduction of any or all of
the Commitments be deemed to constitute an increase of the Commitment of any
Lender and that an increase in the available portion of any Commitment of any
Lender shall not be deemed to constitute an increase in the Commitment of such
Lender, (v) no amendment, modification, termination or waiver of any provision
of subsection 2.1A(v) or any other provision of this Agreement relating to the
Swing Line Loan Commitment or the Swing Line Loans shall be effective without
the written concurrence of Swing Line Lender, (vi) no amendment, modification,
termination or waiver of any provision of this Agreement shall change the
allocation among the Tranche A Term Loans and Tranche B Term Loans of
prepayments to be made pursuant to subsection 2.4C without the prior written
consent of (1) Lenders holding more than 50% of the aggregate outstanding
principal amount of the Tranche A Term Loans and (2) Lenders holding more than
50% of the aggregate outstanding principal amount of the Tranche B Term Loans,
(vii) no amendment, modification, termination or waiver of any provision of this
Agreement shall change the application of prepayments of Tranche A Term Loans
pursuant to subsection 2.4C without the prior written consent of Lenders holding
more than 50% of the aggregate outstanding principal amount of the Tranche A
Term Loans, (viii) no amendment, modification, termination or waiver of any
provision of this Agreement shall change the application of prepayments of
Tranche B Term Loans pursuant to subsection 2.4C without the prior written
consent of Lenders holding more than 50% of the aggregate outstanding principal
amount of the Tranche B Term Loans, (ix) [RESERVED], (x) no amendment,
modification termination or waiver of any provision of Section 3 relating to the
rights or obligations of any or all Issuing Lenders shall be effective without
the written concurrence of Administrative Agent and each Lender who is an
Issuing Lender with respect to any Letter of Credit then outstanding, and (xi)
no amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of Administrative Agent shall be effective
without the written concurrence of Administrative Agent. Administrative Agent
may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications,
133
<PAGE>
waivers or consents on behalf of that Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on Company in any case shall entitle
Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 10.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all non-
consenting Lenders are so treated, elect to terminate such Lender as a party to
this Agreement; provided that, concurrently with such termination, (i) Company
--------
shall pay that Lender all principal, interest and fees and other amounts due to
be paid to such Lender with respect to all periods through such date of
termination, (ii) another financial institution satisfactory to Company and
Administrative Agent (or if Administrative Agent is also a Lender to be
terminated, the successor Administrative Agent) shall agree, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent (or if Administrative Agent is also a Lender to
be terminated, the successor Administrative Agent) to evidence the substitution
of such Lender shall have been received and approved by Administrative Agent as
of such date.
10.7 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to Administrative
--------
Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Company and Administrative Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to Administrative Agent.
134
<PAGE>
10.9 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn or paid thereunder, and the termination of
this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
------------
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
135
<PAGE>
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
--------
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights nor obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
136
<PAGE>
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.18 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING
137
<PAGE>
TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
10.19 Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Company in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Company that in any event a Lender may make disclosures reasonably required by
any Affiliate or any bona fide assignee, transferee or participant in connection
with the contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental agency or
representative thereof or pursuant to legal process or by the National
Association of Insurance Commissioners or in connection with the exercise of any
remedy under the Loan Documents; provided that, unless specifically prohibited
--------
by applicable law or court order, each Lender shall notify Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
-------- -------
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
10.20 Counterparts; Effectiveness.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
138
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: AURORA FOODS INC.
By:_____________________________________
Name:
Title:
Notice Address:
456 Montgomery Street, Suite 2200
San Francisco, California 94104
Attention: M. Laurie Cummings
Facsimile: (415) 982-3023
and a copy to:
Richards & O'Neil, LLP
885 Third Avenue
New York, New York 10022
Attention: Kenneth Chin, Esq.
Facsimile: (212) 750-9022
139
<PAGE>
AGENTS AND LENDERS: THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By:_____________________________________
Name:
Title:
Notice Address:
270 Park Avenue, 47th Floor
New York, New York 10017
Attention: Carol Ulmer
Telephone: (212) 270-5662
Facsimile: (212) 270-5120
with a copy to:
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Jacqueline Carter
Loan Servicing Group
Telephone: (212) 552-7997
Facsimile: (212) 552-7500
140
<PAGE>
NATIONAL WESTMINSTER BANK PLC,
individually and as Syndication Agent
By:_________________________________
Name:
Title:
Notice Address:
Gleacher NatWest Inc.
660 Madison Avenue, 14th Floor
New York, New York 10021
Attention: Jim Hughes
Telephone: (212) 418-4568
Facsimile: (212) 418-4594
<PAGE>
UBS AG, STAMFORD BRANCH
individually and as Documentation Agent
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
Notice Address:
Warburg Dillon Read
677 Washington Boulevard
Stamford, Connecticut 06910
Attention: Lara Kavanagh
Telephone: (213) 719-4181
Facsimile: (213) 719-4176
<PAGE>
BANQUE NATIONALE DE PARIS
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
Notice Address:
Banque Nationale de Paris
499 Park Avenue
New York, New York 10022
Attention: Stephanie Rogers
Telephone: (212) 415-9438
Facsimile: (212) 415-9805
<PAGE>
COBANK
By:___________________________
Name:
Title:
Notice Address:
P.O.Box 5110
Denver, Colorado 80217
5500 South Quebec street
Englewood, Colorado 80111
Attention: Brian J. Klatt
Telephone: (303) 740-6511
Facsimile: (303) 740-4002
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
Notice Address:
Credit Agricole Indosuez
101 California Street, Suite 4390
San Francisco, California 94111
Attention: Karen Kokame
Telephone: (415) 391-0810
Facsimile: (415) 986-4116
<PAGE>
DAI-ICHI KANGYO BANK, LTD.
By:____________________________
Name:
Title:
Notice Address:
The Dai-Ichi Kangyo Bank, Limited.
One World Trade Center, 48/th/ floor
New York, New York 10048
Attention: Christopher Fahey
Telephone: (212) 432-6648
Facsimile: (212) 524-0579
<PAGE>
FIRST UNION NATIONAL BANK
By:_________________________________
Name:
Title:
Notice Address:
First Union National Bank
301 South College Street, 5th Floor
Mail Code NC0737
Charlotte, North Carolina 28288-0737
Attention: Charles B. Edmonson
Telephone: (704) 383-0530
Facsimile: (704) 383-0202
<PAGE>
THE FUJI BANK, LIMITED
By:____________________________________
Name:
Title:
Notice Address:
Fuji Bank, Ltd. (New York)
Two World Trade Center
New York, New York 10048
Attention: Teiji Teramoto
Telephone: (212) 898-2000
Facsimile: (212) 321-9407
<PAGE>
GENERAL ELECTRIC CAPITAL
CORPORATION
By:___________________________
Name:
Title:
Notice Address:
60 Long Ridge Road
Stamford, Connecticut 06927
Attention: Julia Shchukina
Telephone: (203) 357-3838
Facsimile: (203) 316-7978
<PAGE>
HARRIS TRUST AND SAVINGS BANK
By:_________________________________
Name:
Title:
Notice Address:
Harris Trust and Savings Bank
111 West Monroe Street
Floor 18 West
Chicago, Illinois 60690
Attention: Karen Knudsen
Telephone: (312) 461-4085
Facsimile: (312) 765-8095
<PAGE>
HSBC BANK USA
By:_____________________________
Name:
Title:
Notice Address:
HSBC Bank USA
140 Broadway, 5th Floor
New York, New York 10005
Attention: Martin Brown
Telephone: (212) 658-2738
Facsimile: (212) 658-2586
<PAGE>
BAYERISCHE HYPO-und
VEREINSBANK AG
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
Notice Address:
Bayerische Hypo-und Vereinsbank AG
New York Branch
150 East 42nd Street, 30th Floor
New York, New York 10017-4676
Attention: Sylvia K. Cheng
Telephone: (212) 672-5386
Facsimile: (212) 672-5591
<PAGE>
IKB DEUTSCHE INDUSTRIEBANK AG
LUXEMBOURG BRANCH
By:__________________________________
Name:
Title:
Notice Address:
IKB Deutsche Industriebank AG
c/o Structured Finance
Wilhelm-Botzkes-Strasse 1,
40474 Dusseldorf
P.O. Box 10 11 18, 40002 Dusseldorf
Germany
Attention: Maria Bissinger
Telephone: 49 (211) 8221-4957
Facsimile: 49 (211) 8221-2957
<PAGE>
MITSUBISHI TRUST AND BANKING
By:_______________________________
Name:
Title:
Notice Address:
Mitsubishi Trust and Banking
520 Madison Avenue, 25th Floor
New York, New York 10022
Attention: Bea Kossodo
Telephone: (212) 891-8363
Facsimile: (212) 644-6825
<PAGE>
MORGAN STANLEY DEAN WITTER
PRIME INCOME TRUST
By:_____________________________
Name:
Title:
Notice Address:
c/o Morgan Stanley Dean Witter
Advisors Inc.
Two World Trade Center, 72/nd/ floor
New York, New York 10048
Attention: April Chrysostomes
Telephone: (212) 392-5709
Facsimile: (212) 392-5345
<PAGE>
NATIONAL CITY BANK
By:_________________________________
Name:
Title:
Notice Address:
National City Bank
1900 East Ninth Street, Location 2077
Cleveland, Ohio 44114
Attention: Lisa B. Lisi
Telephone: (216) 575-9166
Facsimile: (216) 222-0003
<PAGE>
FIRSTAR BANK, N.A.
By:___________________________
Name:
Title:
Notice Address:
Firstar Bank, N.A.
425 Walnut Street, 8th Floor
Cincinnati, Ohio 45201
Attention: Mark Whitson
Telephone: (513) 632-2013
Facsimile: (513) 632-2068
<PAGE>
SUNTRUST BANK, ATLANTA
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
Notice Address:
SunTrust Bank, Inc.
12 Greenway Plaza, #1100
Houston, Texas 77046
Attention: Tom Hamby
Telephone: (713) 425-4904
Facsimile: (713) 425-4905
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By:________________________________
Name:
Title:
Notice Address:
U.S. Bank National Association
First Bank Place
MPFP 0702
601 Second Avenue South
Minneapolis, Minnesota 55402
Attention: Elliot Jaffee
Telephone: (612) 973-0543
Facsimile: (612) 973-0825
<PAGE>
WELLS FARGO BANK, N.A.
By:_________________________________
Name:
Title:
Notice Address:
Wells Fargo Bank, N.A.
555 Montgomery Street, 17th Floor
San Francisco, California 94111
Attention: John Stewart
Telephone: (415) 396-7889
Facsimile: (415) 975-5081
<PAGE>
ALLSTATE INSURANCE COMPANY
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Notice Address:
Allstate Insurance Company
Private Placements Department
3075 Sanders Road, Suite G3A
Northbrook, Illinois 60062
Attention: Jerry Zinkula
Telephone: (847) 402-8383
Facsimile: (847) 402-3092
and a copy to:
3075 Sanders Road, Suite G3A
Northbrook, Illinois 60062
Attention: Tom Dugan
Telephone: (847) 402-2371
Facsimile: (847) 402-9882
161
<PAGE>
ALLSTATE LIFE INSURANCE
COMPANY
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
Its Authorized Signatories
Notice Address:
Allstate Insurance Company
Private Placements Department
3075 Sanders Road, Suite G3A
Northbrook, Illinois 60062
Attention: Jerry Zinkula
Telephone: (847) 402-8383
Facsimile: (847) 402-3092
and a copy to:
3075 Sanders Road, Suite G3A
Northbrook, Illinois 60062
Attention: Tom Dugan
Telephone: (847) 402-2371
Facsimile: (847) 402-9882
162
<PAGE>
BALANCED HIGH-YIELD FUND I LTD.
By:_____________________________
Name:
Title:
Notice Address:
Balanced High-Yield Fund I Ltd.
c/o BHF(USA) Capital Corp.
590 Madison Avenue
New York, New York 10022
Attention: John Zapalac
Telephone: (212) 756-5681
Facsimile: (212) 756-5536
163
<PAGE>
BALANCED HIGH-YIELD FUND II LTD.
By:_______________________________
Name:
Title:
Notice Address:
Balanced High-Yield Fund II Ltd.
c/o BHF-BANK Aktiengesellschaft.
590 Madison Avenue
New York, New York 10022
Attention: John Zapalac
Telephone: (212) 756-5681
Facsimile: (212) 756-5536
164
<PAGE>
BHF (USA) CAPITAL CORPORATION
By:_________________________________
Name:
Title:
Notice Address:
590 Madison Avenue
New York, New York 10022
Attention: John Zapalac
Telephone: (212) 756-5681
Facsimile: (212) 756-5536
165
<PAGE>
CERES FINANCE LTD.
By:__________________________
Name:
Title:
Notice Address:
Ceres Finance Ltd.
c/o Stanfield Capital Partners LLC
330 Madison Avenue, 27/th/ floor
New York, New York 10017
Attention: Leticia Davis
Telephone: (212) 284-4316
Facsimile: (212) 284-4315
166
<PAGE>
CONSECO CAPITAL MANAGEMENT
By:_____________________________
Name:
Title:
Notice Address:
11825 North Pennsylvania Street
Carmel, Indiana 46032
Attention: John Nasser
Telephone: (317) 817-6069
Facsimile: (317) 817-2763
167
<PAGE>
WINGED FOOT FUNDING TRUST
By:__________________________
Name:
Title:
Notice Address:
Banc of America Securities LLC
100 North Tryon Street
NC1-007-06-07
Charlotte, North Carolina 28255
Attention: Kelly C. Walker
Telephone: (704) 388-8943
Facsimile: (704) 388-0648
and a copy to:
Conseco Capital Management
11825 North Pennsylvania Street
Carmel, Indiana 46032
Attention: John Nasser
Telephone: (317) 817-5696
Facsimile: (317) 575-2001
168
<PAGE>
CYPRESSTREE SENIOR FLOATING RATE FUND
By: CypressTree Investment Management
Company, Inc. as Portfolio Manager
By:___________________________________
Name:
Title:
Notice Address:
125 High Street
Boston, Massachusetts 02110
Attention: Cathy McDermott
Telephone: (617) 946-0600
Facsimile: (617) 946-5681
169
<PAGE>
NORTH AMERICAN SENIOR
FLOATING RATE FUND
By: CypressTree Investment Management
Company, Inc. as Portfolio Manager
By:_____________________________________
Name:
Title:
Notice Address:
125 High Street
Boston, Massachusetts 02110
Attention: Cathy McDermott
Telephone: (617) 946-0600
Facsimile: (617) 946-5681
170
<PAGE>
DEUTSCHE BANK AG
New York Branch and/or Cayman Islands Branch
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
Notice Address:
Deutsche Bank AG New York Branch
and/or Cayman Islands Branch
31 West 52nd Street, 24th Floor
New York, New York 10019
Attention: Alexander Karow
Telephone: (212) 469-8532
Facsimile: (212) 469-8212
171
<PAGE>
EATON VANCE INSTITUTIONAL
SENIOR LOAN FUND
By: Eaton Vance Management, as
Investment Advisor
By:_____________________
Name:
Title:
Notice Address:
EV Institutional Senior Loan Fund
c/o Eaton Vance management
255 State Street, 8/th/ floor
Boston, Massachusetts 02109
Attention: Steve O'Brien
Telephone: (617) 598-8115
Facsimile: (617) 695-9594
and a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Andrew Mattei
Telephone: (212) 506-2572
Facsimile: (212) 262-1910
172
<PAGE>
EATON VANCE SENIOR
INCOME TRUST
By: Eaton Vance Management, as
Investment Advisor
By:______________________
Name:
Title:
Notice Address:
EV Institutional Senior Loan Fund
c/o Eaton Vance management
255 State Street, 8/th/ floor
Boston, Massachusetts 02109
Attention: Steve O'Brien
Telephone: (617) 598-8115
Facsimile: (617) 695-9594
and a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Andrew Mattei
Telephone: (212) 506-2572
Facsimile: (212) 262-1910
173
<PAGE>
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.
Its Agents/Manager
By:_________________________________
Name:
Title:
Notice Address:
First Source Financial, Inc.
2850 West Golf Road, Suite 520
Rolling Meadows, Illinois 60008
Attention: Nicole Koopmann
Telephone: (847) 737-2057
Facsimile: (847) 734-7910
174
<PAGE>
FLEET NATIONAL BANK
By:______________________
Name:
Title:
Notice Address:
Fleet National Bank
One Federal Street, MAOF0324
Boston, Massachusetts 02110
Attention: Thomas J. Mahoney
Telephone: (617) 434-2909
Facsimile: (617) 346-4806
With a copy to:
Fleet National Bank
1185 Avenue of the Americas
New York, New York 10036
Attention: Jed Duncan
Telephone: (212) 819-6010
Facsimile: (212) 819-6201
175
<PAGE>
FLOATING RATE PORTFOLIO
by: INVESCO Senior Secured
Management, Inc. as attorney in fact
By:__________________________________________
Name:
Title:
Notice Address:
INVESCO Senior Secured
Management, Inc., 27/th/ floor
1166 Avenue of the Americas
New York, New York 10036-2789
Attention: Anne McCarthy
Telephone: (212) 278-9850
Facsimile: (212) 278-9619
176
<PAGE>
FRANKLIN FLOATING RATE TRUST
By:_______________________
Name:
Title:
Notice Address:
777 Mariners Island Boulevard
San Mateo, California 94404
Attention: Mary Ann Chase
Telephone: (650) 525-7424
Facsimile: (650) 312-3346
177
<PAGE>
GALAXY CLO 1991-1 LTD.
By:_______________________
Name:
Title:
Notice Address:
SAI Investment Advisor, Inc.
1 SunAmerica Center-34th floor
Century City
Los Angeles, California 90067-6022
Attention: Steve Staver
Telephone: (310) 772-6125
Facsimile: (310) 772-6078
and a copy to:
Galaxy CLO 1991-1, Ltd.
c/o Chase Bank of Texas,
National Association
600 Travis Street, 9/th/ floor
Attention M. Calzado A/C 23206
Telephone: (713) 216-4648
Facsimile: (713) 216-3571
178
<PAGE>
GENERAL RE-NEW ENGLAND ASSET
MGMT.
By:__________________
Name:
Title:
Notice Address:
76 Batterson Park Road
Farmington, Connecticut 06032
Attention: Theodore Haag
Telephone: (860) 409-3213
Facsimile: (860) 676-8712
179
<PAGE>
HARCH CAPITAL MANAGEMENT INC.
By:__________________
Name:
Title:
Notice Address:
621 NW 53rd Street, Suite 620
Boca Raton, Florida 33487
Attention: John Farrace
Telephone: (561) 995-4920
Facsimile: (561) 995-4955
180
<PAGE>
INDOSUEZ CAPITAL FUNDING III,
LIMITED
By: Indosuez Capital Luxembourg as
Collateral Manager
By:___________________________________
Name:
Title:
Notice Address:
Indosuez Capital
1211 Avenue of the Americas, 8/th/ floor
New York, New York 10036
Attention: Melissa Marano
Telephone: (212) 278-2231
Facsimile: (212) 278-2254
181
<PAGE>
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, L.L.C.,
as Collateral Manager
By:______________________________
Name:
Title:
Notice Address:
333 S. Grand Avenue, #4250
Los Angeles, California 90071
Attention: Mike Hatley
Telephone: (213) 346-3972
Facsimile: (213) 346-3995
182
<PAGE>
AERIES FINANCE-II LTD.
By: Invesco Senior Secured Management,
Inc., as Sub-Managing Agent
By:_____________________________________
Name:
Title:
Notice Address:
INVESCO Senior Secured
Management, Inc.
1166 Avenue of the Americas, 27/th/ floor
New York, New York 10036-2789
Attention: Anne McCarthy
Telephone: (212) 278-9850
Facsimile: (212) 278-9619
183
<PAGE>
AVALON CAPITAL LTD.
By: INVESCO Senior Secured
Management, Inc. as Portfolio Advisor
By:__________________________________________
Name:
Title:
Notice Address:
INVESCO Senior Secured
Management, Inc.
1166 Avenue of the Americas, 27/th/ floor
New York, New York 10036-2789
Attention: Anne McCarthy
Telephone: (212) 278-9850
Facsimile: (212) 278-9619
184
<PAGE>
KEMPER FLOATING RATE FUND
By:___________________________
Name:
Title:
Notice Address:
Kemper Floating Rate Fund
Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
Attention: Jonathan Trutter
Telephone: (312) 537-8343
Facsimile: (312) 537-4239
185
<PAGE>
KZH ING-2 LLC
By:__________________________________________
Name:
Title:
Notice Address:
KZH ING-2 LLC
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
and a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Shan D. McSweeney
Telephone: (212) 351-3806
Facsimile: (212) 351-4035
186
<PAGE>
KZH PONDVIEW LLC
By:______________________________
Name:
Title:
Notice Address:
KZH Pondview LLC
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
and a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Shan D. McSweeney
Telephone: (212) 351-3806
Facsimile: (212) 351-4035
187
<PAGE>
KZH SHOSHONE LLC
By:_________________________________
Name:
Title:
Notice Address:
KZH Shoshone LLC
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
and a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Shan D. McSweeney
Telephone: (212) 351-3806
Facsimile: (212) 351-4035
188
<PAGE>
KZH-SOLEIL-2 LLC
By:______________________________
Name:
Title:
Notice Address:
KZH Soleil-2 LLC
c/o The Chase Manhattan Bank
450 West 33/rd/ Street, 15/th/ floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
and a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Shan D. McSweeney
Telephone: (212) 351-3806
Facsimile: (212) 351-4035
189
<PAGE>
KZH CYPRESSTREE-1 LLC
By:___________________________________
Name:
Title:
Notice Address:
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: 212-946-7575
Facsimile: 212-946-7776
190
<PAGE>
KZH STERLING LLC
By:_______________________________
Name:
Title:
Notice Address:
KZH Sterling LLC
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
and a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Shan D. McSweeney
Telephone: (212) 351-3806
Facsimile: (212) 351-4035
191
<PAGE>
KZH CNC LLC
By:_________________________________
Name:
Title:
Notice Address:
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
192
<PAGE>
KZH APPALOOSA LLC
By:______________________________
Name:
Title:
Notice Address:
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
193
<PAGE>
KZH IV LLC
By:________________________________
Name:
Title:
Notice Address:
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
194
<PAGE>
KZH WATERSIDE LLC
By:_______________________________
Name:
Title:
Notice Address:
c/o The Chase Manhattan Bank
450 West 33/rd/ Street - 15/th/ Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Facsimile: (212) 946-7776
195
<PAGE>
METROPOLITAN LIFE INSURANCE
COMPANY
By:__________________________________________
Name:
Title:
Notice Address:
334 Madison Avenue, P.O. Box 633
Convent Station, NJ 07961
Attention: James Dingler
Telephone: (973) 254-3206
Facsimile: (973) 254-3032
196
<PAGE>
ML CLO XII PILGRIM AMERICA
(CAYMAN) LTD. (as assignee)
By: Pilgrim Investments, Inc.
as its investment manager
By:________________________________
Name:
Title:
Notice Address:
ML CLO XII Pilgrim America
(Cayman) Ltd.
c/o Pilgrim Investments, Inc.
Two Renaissance Square
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4424
Attention: Melonie Clark
Telephone: (602) 417-8228
Facsimile: (602) 336-8321
and a copy to:
Rogers & Wells
607 14/th/ Street NW, 10/th/ floor
Washington, D.C. 20005
Attention: Lisa Tymann
Telephone: (202) 434-0787
Facsimile: (202) 434-0800
197
<PAGE>
MONUMENT CAPITAL LTD.,
AS ASSIGNEE
By: Alliance Capital Management L.P., as
investment manager
By: Alliance Capital management
Corporation, as General Partner
By:____________________________
Name:
Title:
Notice Address:
Alliance Capital Management L.P.
1345 Avenue of the Americas, 37/th/ floor
New York, New York 10105
and a copy to:
Monument Capital Ltd.
c/o Chase Bank of Texas
600 Travis Street, 51/st/ floor
Houston, Texas 77002-8039
Attention: Charles Janz, A/C 23204
Telephone: (713) 216-4821
Facsimile: (713) 216-8299
198
<PAGE>
MOUNTAIN CLO TRUST
By:___________________________
Name:
Title:
Notice Address:
Mountain Capital Advisors
2 World Trade Center
79/th/ Floor(LFG)
New York, New York 10048
Attention: Mark Hanslin
Telephone: (212) 898-2073
Facsimile: (212) 898-2129
199
<PAGE>
NATEXIS BANQUE BFCE
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
Notice Address:
645 Fifth Avenue, 20th Floor
New York, New York 10022
Attention: Frank Madden
Telephone: (212) 872-5180
Facsimile: (212) 872-5045
200
<PAGE>
NOMURA BOND & LOAN FUND
By: Nomura Corporate Research & Asset
Management Inc., as Investment Advisor
By:___________________________________
Name:
Title:
Notice Address:
Nomura Corporate Research & Asset
Management Inc., as Investment Advisor
Two World Financial Center, Building B
New York, New York 10281
Attention: Rick Stewart
Telephone: (212) 667-9277
Facsimile: (212) 667-1661
201
<PAGE>
NORTHWOODS CAPITAL, LIMITED
By: Angelo, Gordon & Co., L.P., as Collateral Manager
By:__________________________________________
Name:
Title:
Notice Address:
Northwoods Capital, Limited
Chase Bank of Texas, N.A.
Trust Department, 51/st/ floor
600 Travis Street
Texas Commerce Tower
Houston, Texas 77002-8039
Attention: Lori Phillips
Telephone: (713) 216-1555
Facsimile: (713) 216-5581
and a copy to:
Angelo, Gordon & Co., L.P.
Accounting Department
245 Park Avenue, 26/th/ floor
New York, New York 10167
Attention: Kim Lee
Telephone: (212) 692-8278
Facsimile: (212) 867-6448
202
<PAGE>
OLYMPIC FUNDING TRUST,
SERIES 1999-1
By:__________________________
Name:
Title:
Notice Address:
Banc of America Securities LLC
100 North Tyron St.
Charlotte, NC 28255
Attention: Ashley Hamilton
Telephone: (704) 387-9951
Facsimile: (704) 387-0275
203
<PAGE>
OXFORD STRATEGIC INCOME FUND
By: Eaton Vance Management, as
Investment Advisor
By:___________________________
Name:
Title:
Notice Address:
Eaton Vance Management
255 State Street, 8/th/ floor
Boston, Massachussetts 02109
Attention: Steve O'Brien
Telephone: (617) 598-8115
Facsimile: (617) 695-9594
and a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Andrew Mattei
Telephone: (212) 506-2572
Facsimile: (212) 262-1910
204
<PAGE>
PACIFICA PARTNERS I, L.P.
By: Imperial Credit Asset Management, as
its investment manager
By:_____________________________
Name:
Title:
Notice Address:
Pacifica Partners I, L.P.
c/o Imperial Credit Asset Management
150 South Rodeo Drive, Suite 230
Beverly Hills, California 90212
Attention: Tom Colwell
Telephone: (310) 246-3724
Facsimile: (310) 246-3715
205
<PAGE>
PARIBAS
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
Notice Address:
Banque Paribas
101 California Street, Suite 3150
San Francisco, California 94111
Attention: Robert Pinkerton
Telephone: (415) 398-6811
Facsimile: (415) 398-4240
206
<PAGE>
PARIBAS CAPITAL FUNDING LLC
By:_________________________
Name:
Title:
Notice Address:
Paribas Capital Funding LLC
787 Seventh Avenue, 32nd floor
New York, New York 10019
Attention: Michael Weinberg
Telephone: (212) 841-2544
Facsimile: (212) 841-2144
207
<PAGE>
PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD. (as assignee)
By: Pilgrim Investments, Inc.
as its investment manager
By:__________________________________________
Name:
Title:
Notice Address:
Pilgrim American High Income
Investments Ltd.
c/o Pilgrim Investments, Inc.
Two Renaissance Square
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4424
Attention: Melonie Clark
Telephone: (602) 417-8228
Facsimile: (602) 336-8321
and a copy to:
Rogers & Wells
607 14/th/ Street NW, 10/th/ floor
Washington, D.C. 20005
Attention: Lisa Tymann
Telephone: (202) 434-0787
Facsimile: (202) 434-0800
208
<PAGE>
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc. as it
investment manager
By:________________________________
Name:
Title:
Notice Address:
Pilgrim Prime Rate Trust
Two Renaissance Square
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4424
Attention: Melonie Clark
Telephone: (602) 417-8228
Facsimile: (602) 336-8321
and a copy to:
Rogers & Wells
607 14/th/ Street NW, 10/th/ floor
Washington, D.C. 20005
Attention: Lisa Tymann
Telephone: (202) 434-0787
Facsimile: (202) 434-0800
209
<PAGE>
PINEHURST TRADING, INC.
By:__________________________________________
Name:
Title:
Notice Address:
Transamerica Investment Services
1150 South Olive Street, Suite 2700
Los Angeles, California 90015
Attention: John Casparian
Telephone: (213) 742-3554
Facsimile: (213) 741-7110
210
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By:_________________________________
Name:
Title:
Notice Address:
PNC BANK N.A.
201 East Fifth Street
P.O. Box 1198
Cincinnati, Ohio 45201-1198
Attention: Gary A. Northrup
Telephone: (513) 651-8656
Facsimile: (513) 651-8951
211
<PAGE>
PPM SPYGLASS FUNDING TRUST
SENIOR DEBT PORTFOLIO
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
Notice Address:
Banc of America Securities LLC
100 North Tyron St.
Charlotte, NC 28255
Attention: Kelly Walker
Telephone: (704) 388-8943
Facsimile: (704) 388-0648
212
<PAGE>
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:_________________________
Name:
Title:
Notice Address:
Senior Debt Portfolio
c/o Boston Management and Research
255 State Street, 8/th/ floor
Boston, Massachussetts
Attention: Steve O'Brien
Telephone: (617) 598-8115
Facsimile: (617) 695-9594
with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, NY 10019
Attention: Andrew Mattei
Telephone: (212) 506-2572
Facsimile: (212) 262-1910
213
<PAGE>
STANFIELD CLO, LTD.
By:______________________
Name:
Title:
Notice Address:
Stanfield Capital Partners LLC
330 Madison Ave., 27/th/ floor
New York, New York 10017
Attention: Leticia Davis
Telephone: (212) 284-4316
Facsimile: (212) 284-4315
and a copy to:
State Street Bank & Trust Co.
Corporate Trust Dept.
Two Internatnational Place
Boston, Massachussetts
Attention: Laura Ronuci
Telephone: (617) 662-1268
Facsimile: (617) 664-5366
214
<PAGE>
STATE STREET BANK AND TRUST COMPANY,
as Trustee for General Motors Employees
Global Group Pension Trust
By:_________________________
Name:
Title:
Notice Address:
State Street Bank and Trust Company
Global Investment Manager Services
Division
One Enterprise Drive W6C
North Quincy, Massachusetts 02171
Attention: Adam Antonik
Portfolio Number 7MC9
and a copy to:
Shenkman Capital Management, Inc.
461 Fifth Avenue, 22rd Floor
New York, New York 10017
Attention: Niall Rosenzweig
Telephone: (212) 867-9090
Facsimile: (212) 867-9106
215
<PAGE>
SUMMIT BANK
By:____________________________
Name:
Title:
Notice Address:
Summit Bank
750 Walnut Avenue, 3rd Floor
Cranford, New Jersey 07016
Attention: Seiji Nakamura
Telephone: (908) 709-6062
Facsimile: (908) 709-6433
216
<PAGE>
TCW LEVERAGED INCOME
TRUST II, L.P.
By: TCW Advisors (Bermuda), Ltd., as General Partner
By:_____________________________
Name:
Title:
By: TCW Investment Management Company, as Investment Advisor
By:_____________________________
Name:
Title:
Notice Address:
TCW Leveraged Income Trust II, L.P.
c/o Bank of New York Corporate Trust
Asset Backe Finance Unit
100 Church Street-7th floor
New York, New York 10286
Attention: Purisima Teylan
Telephone: (212) 437-6466
Facsimile: (212) 437-6521
and a copy to:
Trust Company of the West
865 South Figueroa Street, Suite 1800
Los Angeles, California 90017
Attention: Sawako Ishibashi
Telephone: (213) 244-0155
Facsimile: (213) 244-0485
217
<PAGE>
THE TRAVELERS INSURANCE COMPANY
By:_____________________________
Name:
Title:
Notice Address:
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Teresa M. Torrey
Telephone: (860) 277-5952
Facsimile: (860) 954-5243
218
<PAGE>
TRAVELERS CORPORATE
LOAN FUND INC.
By:_________________________________
Name:
Title:
Notice Address:
Travelers Corporate Loan Fund Inc.
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Teresa M. Torrey
Telephone: (860) 277-5952
Facsimile: (860) 954-5243
with a copy to:
Travelers Corporate Loan Fund Inc.
c/o Smith Barney
388 Greenwich Street, 22/nd/ floor
New York, New York 10013
219
<PAGE>
TORONTO DOMINION (NEW YORK), INC.
By:_________________________________
Name:
Title:
Notice Address:
Toronto Dominion (New York), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Jorge A. Garcia
Telephone: (713) 653-8242
Facsimile: (713) 652-0914
220
<PAGE>
VAN KAMPEN SENIOR
INCOME TRUST
By:__________________________
Name:
Title:
Notice Address:
Van Kempen
One Parkview Plaza, 5th Floor
Oakbrook Terrace
Illinois 60181
Attention: Brian Buscher
Telephone: (630) 684-6438
Facsimile: (630) 684-6740
221
<PAGE>
VAN KAMPEN CLO I, LIMITED
By: Van Kampen Management, Inc.,
as Collateral Manager
By:_______________________________
Name:
Title:
Notice Address:
One Parkview Plaza, 5th Floor
Oakbrook Terrace
Illinois 60181
Attention: Brian Buscher
Telephone: (630) 684-6438
Facsimile: (630) 684-6740
and a copy to:
Mayer, Capel, Hirschfeld
306 West Church St.
Champaign, Illinois 61820
Attention: John Powers
Facsimile: (217) 352-2065
222
<PAGE>
ANNEX A
TO CREDIT AGREEMENT
PRICING GRID
RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA
<TABLE>
<CAPTION>
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greater than Less than 5.25 Less than 5:00 Less than Less than Less than
or Equal to but Greater but Greater 4.75:1 but 4.25:1 but 4.00:1 but
5:25:1 than or Equal than or Equal Greater than Greater than Greater than
------ to 5:00:1 to 4:75:1 or Equal to or Equal to or Equal to
--------- --------- 4.25:1 4.00:1 3.75:1
------ ------ ------
Applicable Margin for
Revolving Credit Loans and
Tranche A Term Loans:
- --------------------
ABR Loans 1.50% 1.25% 1.00% 0.75% 0.50% 0.25%
Eurodollar Loans 2.50% 2.25% 2.00% 1.75% 1.50% 1.25%
Applicable Margin for
Tranche B Term Loans:
- --------------------
ABR Loans 2.00% 1.75% 1.50% 1.50% 1.50% 1.50%
Eurodollar Loans 3.00% 2.75% 2.50% 2.50% 2.50% 2.50%
Applicable Margin for
Commitment Fee: 0.50% 0.50% 0.375% 0.375% 0.375% 0.375%
- --------------
<CAPTION>
Level 7 Level 8
<S> <C> <C>
Less than
3.75:1
but Greater Less than
than or 3.25:1
Equal to ------
3.25:1
------
Applicable Margin for
Revolving Credit Loans and
Tranche A Term Loans:
- --------------------
ABR Loans 0.00% 0.00%
Eurodollar Loans 1.125% 1.00%
Applicable Margin for
Tranche B Term Loans:
- --------------------
ABR Loans 1.50% 1.50%
Eurodollar Loans 2.50% 2.50%
Applicable Margin for
Commitment Fee: 0.30% 0.30%
- --------------
</TABLE>
223
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXECUTION COPY
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF NOVEMBER 1, 1999
AMONG
AURORA FOODS INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
NATIONAL WESTMINSTER BANK PLC,
AS SYNDICATION AGENT
AND
UBS AG, STAMFORD BRANCH,
AS DOCUMENTATION AGENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
224
<PAGE>
AURORA FOODS INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
DEFINITIONS................................................................................................ 2
1.1 Certain Defined Terms......................................................................... 2
1.2 Accounting Terms Utilization of GAAP for Purposes of Calculations Under Agreement............. 37
1.3 Other Definitional Provisions................................................................. 38
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................................................. 38
2.1 Commitments; Loans............................................................................ 38
2.2 Interest on the Loans......................................................................... 45
2.3 Fees.......................................................................................... 49
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and Payments
under Guaranties.............................................................................. 49
2.5 Use of Proceeds............................................................................... 59
2.6 Special Provisions Governing Eurodollar Rate Loans............................................ 60
2.7 Increased Costs; Taxes; Capital Adequacy...................................................... 62
2.8 Obligation of Lenders and Issuing Lenders to Mitigate......................................... 66
LETTERS OF CREDIT.......................................................................................... 67
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein................. 67
3.2 Letter of Credit Fees......................................................................... 69
3.3 Drawings and Payments and Reimbursement of Amounts Paid Under Letters of Credit............... 70
3.4 Obligations Absolute.......................................................................... 72
3.5 Indemnification; Nature of Issuing Lender's Duties............................................ 73
3.6 Increased Costs and Taxes Relating to Letters of Credit....................................... 74
CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................................. 75
4.1 Conditions to Additional Tranche B Term Loans................................................. 75
4.2 Conditions to All Loans....................................................................... 79
4.3 Conditions to Letters of Credit............................................................... 81
REPRESENTATIONS AND WARRANTIES............................................................................. 81
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................. 81
5.2 Authorization of Borrowing, etc............................................................... 82
5.3 Financial Condition........................................................................... 83
5.4 No Material Adverse Change; No Restricted Junior Payments..................................... 84
5.5 Title to Properties; Liens; Intellectual Property............................................. 84
5.6 Litigation: Adverse Facts.................................................................... 86
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
5.7 Payment of Taxes............................................................................. 86
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts................. 87
5.9 Governmental Regulation...................................................................... 87
5.10 Securities Activities........................................................................ 87
5.11 Employee Benefit Plans....................................................................... 87
5.12 Certain Fees................................................................................. 88
5.13 Environmental Protection..................................................................... 88
5.14 Employee Matters............................................................................. 89
5.15 Solvency..................................................................................... 89
5.16 Matters Relating to Collateral............................................................... 90
5.17 Related Agreements........................................................................... 90
5.18 Disclosure................................................................................... 91
5.19 Subordination of Seller Notes................................................................ 91
5.20 Year 2000 Matters............................................................................ 91
AFFIRMATIVE COVENANTS..................................................................................... 92
6.1 Financial Statements and Other Reports....................................................... 92
6.2 Corporate Existence, etc..................................................................... 96
6.3 Payment of Taxes and Claims; Tax Consolidation............................................... 97
6.4 Maintenance of Properties; Insurance......................................................... 97
6.5 Inspection; Lender Meeting................................................................... 97
6.6 Compliance with Laws, etc.................................................................... 98
6.7 Environmental Disclosure and Inspection...................................................... 98
6.8 Company's Remedial Action Regarding Hazardous Materials...................................... 99
6.9 Execution of Subsidiary Guaranty and Subsidiary Security Agreements by
Subsidiaries and Future Subsidiaries......................................................... 100
6.10 Conforming Leasehold Interests; Matters Relating to Additional Real Property
Collateral................................................................................... 100
6.11 Interest Rate Protection..................................................................... 103
6.12 Further Assurances........................................................................... 103
NEGATIVE COVENANTS........................................................................................ 103
7.1 Indebtedness................................................................................. 104
7.2 Liens and Related Matters.................................................................... 105
7.3 Investments; Joint Ventures.................................................................. 106
7.4 Contingent Obligations....................................................................... 107
7.5 Restricted Junior Payments................................................................... 108
7.6 Financial Covenants.......................................................................... 109
7.7 Restriction on Fundamental Changes; Asset Sales.............................................. 112
7.8 Sales and Lease-Backs........................................................................ 113
7.9 Transactions with Shareholders and Affiliates................................................ 114
7.10 Disposal of Subsidiary Stock................................................................. 114
7.11 Conduct of Business.......................................................................... 115
7.12 Amendments or Waivers of Certain Related Agreements; Amendments of Documents
Relating to Subordinated Indebtedness; Designation of "Designated Senior
Indebtedness"; Preferred Stock............................................................... 115
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
7.13 Fiscal Year................................................................................. 116
EVENTS OF DEFAULT........................................................................................ 116
8.1 Failure to Make Payments When Due........................................................... 116
8.2 Default in Other Agreements................................................................. 116
8.3 Breach of Certain Covenants................................................................. 117
8.4 Breach of Warranty.......................................................................... 117
8.5 Other Defaults Under Loan Documents......................................................... 117
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc........................................ 117
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.......................................... 117
8.8 Judgments and Attachments................................................................... 118
8.9 Dissolution................................................................................. 118
8.10 Employee Benefit Plans...................................................................... 118
8.11 Change in Control........................................................................... 118
8.12 Invalidity of Guaranties.................................................................... 118
8.13 Failure of Security......................................................................... 119
8.14 Termination or Breach of Certain Transition Agreements...................................... 119
8.15 Default Under Subordination Provisions...................................................... 119
8.16 Failure to Deliver Financial Information.................................................... 119
AGENTS................................................................................................... 120
9.1 Appointment................................................................................. 120
9.2 Powers; General Immunity.................................................................... 122
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness............................................................................ 123
9.4 Right to Indemnity.......................................................................... 123
9.5 Successor Agents and Swing Line Lender...................................................... 124
9.6 Collateral Documents........................................................................ 124
MISCELLANEOUS............................................................................................ 125
10.1 Assignments and Participations in Loans, Letters of Credit.................................. 125
10.2 Expenses.................................................................................... 128
10.3 Indemnity................................................................................... 128
10.4 Set-Off; Security Interest in Deposit Accounts.............................................. 129
10.5 Ratable Sharing............................................................................. 129
10.6 Amendments and Waivers...................................................................... 130
10.7 Independence of Covenants................................................................... 132
10.8 Notices..................................................................................... 132
10.9 Survival of Representations, Warranties and Agreements...................................... 133
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative....................................... 133
10.11 Marshalling; Payments Set Aside............................................................. 133
10.12 Severability................................................................................ 133
10.13 Obligations Several; Independent Nature of Lenders' Rights.................................. 134
10.14 Headings.................................................................................... 134
10.15 Applicable Law.............................................................................. 134
10.16 Successors and Assigns...................................................................... 134
10.17 Consent to Jurisdiction and Service of Process.............................................. 134
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
10.18 Waiver of Jury Trial........................................................................ 135
10.19 Confidentiality............................................................................. 136
10.20 Counterparts; Effectiveness................................................................. 136
</TABLE>
iv
<PAGE>
ANNEXES
Annex A Pricing Grid
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF TRANCHE B TERM NOTE
VI [RESERVED]
VII FORM OF REVOLVING NOTE
VIII FORM OF SWING LINE NOTE
IX FORM OF SUBSIDIARY GUARANTY
X FORM OF PLEDGE AGREEMENT
XI FORM OF SECURITY AGREEMENT
XII FORM OF LENDER=S BAGELS PATENT AND TRADEMARK SECURITY AGREEMENT
XIII FORM OF COMPLIANCE CERTIFICATE
XIV FORM OF OPINION OF COUNSEL TO LOAN PARTIES
XV FORM OF OPINION OF SIMPSON THACHER & BARTLETT
XVI FORM OF OPINION OF LOCAL COUNSEL
XVII FORM OF ASSIGNMENT AGREEMENT
XVIII FORM OF PERMITTED SELLER NOTE
XIX FORM OF CERTIFICATE RE NON-BANK STATUS
XX FORM OF COLLATERAL ACCOUNT AGREEMENT
XXI FORM OF COLLATERAL ACCESS AGREEMENT
XXII FORM OF MORTGAGE
v
<PAGE>
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES; LENDING OFFICES
4.1F REAL PROPERTY
5.1 SUBSIDIARIES
5.3 MATERIAL SALES, TRANSFERS OR DISPOSITIONS; MATERIAL LIABILITIES; MATERIAL
PURCHASES OR ACQUISITIONS
5.5B OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS
5.5C OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS (LOG
CABIN)
5.5D OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS (DUNCAN
HINES)
5.5E OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS (VAN DE
KAMP'S)
5.5F OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS (SEA
COAST)
5.5G OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL CONTRACTS (LENDER'S
BAGELS)
5.8 MATERIAL CONTRACTS
7.6E STIPULATED CONSOLIDATED EBITDA AND CONSOLIDATED CAPITAL EXPENDITURES
vi
