UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended: January 2, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-13403
American Italian Pasta Company
(Exact name of Registrant as specified in its charter)
DELAWARE 84-1032638
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1000 Italian Way, Excelsior Springs, Missouri 64024
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (816) 502-
6000
NOT APPLICABLE
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant has (1) filed
all documents and reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding as of January 29, 1998 of
the Registrant's Class A Convertible Common Stock was 16,777,146
and there were no shares outstanding of the Class B Common Stock.
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
FORM 10-Q
QUARTER ENDED DECEMBER 31, 1997
TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements (unaudited)
Balance Sheets at December 31, 1997 3
and September 30, 1997.
Statements of Operations for the three
months ended December 31, 1997 and
1996. 4
Statements of Cash Flows for the three
months ended December 31, 1997 and
1996. 5
Notes to Financial Statements 6-7
Item 2. Management s Discussion and Analysis of
Financial Condition and Results of
Operations 8-12
Part II - Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signature Page 14
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
BALANCE SHEETS
DECEMBER 31, SEPTEMBER 30,
1997 1997
____________ _____________
(IN THOUSANDS)
(UNAUDITED)
Assets
Current assets:
Cash and temporary investments $ 1,687 $ 2,724
Trade and other receivables 12,799 9,180
Prepaid expenses and deposits 2,656 1,028
Inventory 15,282 13,675
Deferred income taxes 257 635
________ ________
Total current assets 32,681 27,242
Property, plant and equipment: 131,616 130,845
Accumulated depreciation (31,019) (29,332)
________ ________
100,597 101,513
Construction in progress 49,637 23,721
________ ________
Total property, plant and equipment 150,234 125,234
Deferred income taxes 1,359 1,124
Other assets 659 4,575
________ ________
Total assets $184,933 $158,175
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 10,729 $ 8,644
Income tax payable 1,003 134
Accrued expenses 5,919 5,447
Current maturities of long-term 913 829
debt ________ ________
Total current liabilities 18,564 15,054
Long-term debt 35,638 100,137
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value:
Authorized shares 10,000,000 -- --
Class A common stock, $.001 par
value: Authorized shares -
75,000,000 16 11
Class B common stock, $.001 par
value: Authorized shares
25,000,000 -- --
Additional paid-in capital 142,008 55,324
Notes receivable from officers (273) (298)
Accumulated deficit (11,020) (12,053)
________ ________
Total stockholders' equity 130,731 42,984
________ ________
Total liabilities and stock-
holders' equity $184,933 $158,175
======== ========
See accompanying notes to financial statements.
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
DECEMBER 31,
1997 1996
____ ____
(IN THOUSANDS)
(UNAUDITED)
Revenues $35,536 $29,547
Cost of goods sold 25,760 21,149
Plant expansion cost 266 --
_______ _______
Gross profit 9,510 8,398
Selling and marketing expense, including
product introduction costs in 1996 2,631 4,453
General and administrative expense 1,188 693
_______ _______
Operating profit 5,691 3,252
Interest expense, net 264 2,552
_______ _______
Income before income tax expense and
extraordinary item 5,427 700
Income tax expense 2,062 268
_______ _______
Income before extraordinary item 3,365 432
Extraordinary item: ____
Loss due to early extinguishment of
long-term debt, net of income taxes 2,332 --
_______ _______
Net income $ 1,033 $ 432
======= =======
Earnings Per Common Share:
Income per common share before
extraordinary item $ .20 $ .04
Extraordinary item: ____
Loss per common share due to early
extinguishment of long-term debt,
net of income taxes .14 --
_______ _______
Net income per common share $ .06 $ .04
======= =======
Weighted-average common shares
outstanding 16,430 10,230
======= =======
Earnings Per Common Share - Assuming
Dilution:
Income per common share before
extraordinary item $ .19 $ .04
Extraordinary item: ____
Loss per common share due to early
extinguishment of long-term debt,
net of income taxes .13 --
_______ _______
Net income per common share assuming
dilution $ .06 $ .04
======= =======
Weighted-average common shares
outstanding 17,455 10,480
======= =======
See accompanying notes to financial statements.
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
DECEMBER 31,
1997 1996
____ ____
(IN THOUSANDS)
(UNAUDITED)
Operating activities:
Net income $ 1,033 $ 432
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation and amortization 1,868 1,787
Deferred income tax expense 1,194 --
Extraordinary loss due to early
extinguishment of long-term debt, 2,332 --
net
Changes in operating assets and
liabilities:
Trade and other receivables (3,619) 2,955
Prepaid expenses and deposits (1,250) 42
Inventory (1,607) 233
Accounts payable and accrued expenses 2,173 (2,372)
Income tax payable 868 268
Other 299 (881)
_______ _______
Net cash provided by operating activities 3,291 2,464
Investing activities:
Additions to property, plant and equipment (26,302) (829)
_______ _______
Net cash used in investing activities (26,302) (829)
Financing activities:
Additions to deferred debt issuance costs (325) --
Proceeds from issuance of debt 21,763 320
Net borrowings under revolving line of
credit facility -- (2,000)
Principal payments on debt and capital
lease obligations (86,178) (95)
Proceeds from issuance of common stock,
net of issuance costs 86,714 --
_______ _______
Net cash provided by (used in) financing
activities 21,974 (1,775)
_______ _______
Net decrease in cash and temporary
investments (1,037) (140)
Cash and temporary investments at
beginning of period 2,724 1,818
_______ _______
Cash and temporary investments at end
of period $ 1,687 $ 1,678
======= =======
See accompanying notes to financial statements.
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Basis of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three-month period ended December 31,
1997 are not necessarily indicative of the results that may be
expected for the year ended September 30, 1998. For further
information, refer to the financial statements and footnotes
thereto included in the Company s Annual Report on Form 10-K for
the year ended October 3, 1997.
American Italian Pasta Company (the Company or AIPC ) uses a
52/53 week financial reporting cycle with a fiscal year which
ends on the last Friday of September or the first Friday of
October. The Company s first three fiscal quarters end on the
Friday last preceding December 31, March 31, and June 30 or the
first Friday of the following month. For purposes of this Form
10-Q, the first fiscal quarter of fiscal years 1998 and 1997 both
included thirteen weeks of activity and are described as the
three month periods ended December 31, 1997 and 1996.
2. Completion of Initial Public Offering
In October 1997, the Company completed an initial public offering
(the "Offering") of 7,900,000 shares of Class A Common Stock, par
value of $.001 per share, of which 5,310,000 shares were offered
by the Company and 2,590,000 shares were sold by certain selling
stockholders. The offering of 5,310,000 primary shares at $18
per share generated $95.6 million of gross proceeds. Net proceeds
of the offering were $86.7 million, after deducting the expenses
of the offering. The Company used the proceeds of the offering
to reduce outstanding debt.
3. 1997 Equity Incentive Plan
In October 1997, the Board of Directors adopted the 1997 Equity
Incentive Plan for all employees. Under the Plan, the Board or a
committee designated by the Board is authorized to grant
nonqualified stock options, incentive stock options, reload
options, stock appreciation rights, shares of restricted Common
Stock, performance shares, performance units and shares of Common
Stock. There are 2,000,000 shares of Common Stock reserved for
issuance under the Plan. On October 9, 1997, the Board of
Directors granted options to purchase 993,391 shares of common
stock at $18 per share. The stock options expire 10 years from
the date of grant and become exercisable over the next five years
in varying amounts depending on the terms of the individual
option agreements.
4. Revolving Credit Facility
In October 1997, the Company completed a restructuring of its
primary bank credit facility. The restructured facility initially
provides the Company with $150 million in credit on an unsecured,
revolving basis at interest rates which are indexed to LIBOR. As
a result of the restructuring, the Company incurred a first
quarter extraordinary charge of approximately $2.3 million, net
of tax, related to the write off of deferred debt issuance costs.
AIPC and Harvest States/Amber Milling Working Toward Alliance
In November 1997, the Company announced the signing of a letter
of intent with Harvest States/Amber Milling ("Harvest States")
for the possible construction and operation by AIPC of a pasta
production and distribution facility targeting the industrial
pasta market. The proposed facility would be adjacent to the
Harvest States mill in Kenosha, Wisconsin. The finalization of
the project is subject to a number of significant conditions,
including the execution of a definitive agreement with Harvest
States.
6. New Accounting Pronouncement
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share" in its first quarter ended
on December 31, 1997. SFAS No. 128 replaced the former reporting
of primary and fully diluted earnings per share with its required
reporting of basic and diluted earnings per share. Under the new
requirements, the dilutive effect of stock options is excluded
from basic earnings per share but included in the computation of
diluted earnings per share. All earnings per share amounts for
all periods have been presented, and where necessary, restated to
conform to the SFAS No. 128 requirements.
The following table sets forth the computation of the numerator
and denominator used in the calculation of basic and diluted
earnings per share:
THREE MONTHS ENDED
DECEMBER 31,
1997 1996
____ ____
(IN THOUSANDS)
(UNAUDITED)
Numerator:
Income before extraordinary item $ 3,365 $ 432
Extraordinary item:
Loss due to early extinguishment
of long-term debt, net of
income taxes 2,332 --
_______ _______
Numerator for basic and diluted
earnings per share $ 1,033 $ 432
======= =======
Denominator:
Denominator for basic earnings
per share - weighted average shares 16,430 10,230
Effect of dilutive securities:
Employee stock options 1,025 250
_______ _______
Dilutive potential common shares 1,025 250
_______ _______
Denominator for diluted earnings per
share - adjusted weighted average
shares 17,455 10,480
======= =======
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The discussion set forth below, as well as other portions of this
Quarterly Report, contains statements concerning potential future
events. Such forward-looking statements are based upon
assumptions by the Company's management, as of the date of this
Quarterly Report, including assumptions about risks and
uncertainties faced by the Company. Readers can identify these
forward-looking statements by their use of such verbs as expects,
anticipates, believes or similar verbs or conjugations of such
verbs. If any management assumptions prove incorrect or should
unanticipated circumstances arise, the Company's actual results
could materially differ from those anticipated by such forward-
looking statements. The differences could be caused by a number
of factors or combination of factors including, but not limited
to, those factors identified in the Company s Current Report on
Form 8-K dated October 29, 1997, which is hereby incorporated by
reference. This report has been filed with the Securities and
Exchange Commission (the SEC or the Commission) in Washington,
D.C. and can be obtained by contacting the SEC's public reference
operations or obtaining it through the SEC's web site on the
World Wide Web at http://www.sec.gov. Readers are strongly
encouraged to consider those factors when evaluating any such
forward-looking statement. The Company will not update any
forward-looking statements in this Quarterly Report to reflect
future events or developments.
Results of Operations
Revenues. Revenues increased $6.0 million, or 20.3%, to
$35.5 million for the three-month period ended December 31, 1997,
from $29.5 million for the three-month period ended December 31,
1996. The increase for the three-month period ended December 31,
1997 was primarily due to increases in unit volume, favorable
changes in sales mix, and increases in average sales prices
related to the pass through of higher durum wheat costs.
Approximately $2.8 million in revenues related to initial
shipments of Mueller s brand pasta to Bestfoods (formerly CPC
International, Inc.). Management expects continued increases in
revenues as a result of the Company's long-term supply agreement
with Bestfoods.
Revenues for the Retail market increased $5.9 million, or
35.5%, to $22.5 million for the three-month period ended December
31, 1997, from $16.6 million for the three-month period ended
December 31, 1996. The increase primarily reflects gains in
private label volumes and Bestfoods volumes and average sales
price increases related to the pass through of higher durum wheat
costs offset by lower sales volumes of Pasta LaBella flavored
pasta as the prior period included heavy introductory pipeline
shipments.
Revenues for the Institutional market increased $0.1
million, or 0.8%, to $13.0 million for the three-month period
ended December 31, 1997, from $12.9 million for the three-month
period ended December 31, 1996. This increase was primarily a
result of increases in average sales prices related to the pass
through of higher durum wheat costs offset by decreases in spot
contract business volumes due to capacity restrictions in the
current quarter. Non-contract unit volumes in the Institutional
market generally remained consistent between periods.
Gross Profit. Gross profit increased $1.1 million, or
13.1%, to $9.5 million for the three-month period ended December
31, 1997, from $8.4 million for the three-month period ended
December 31, 1996. This increase is generally related to the
revenue growth. Gross profit as a percentage of revenues
decreased to 26.8% for the three-month period ended December 31,
1997 from 28.4% for the three-month period ended December 31,
1996. The decrease in gross profit as a percentage of revenues
relates to generally lower gross margin Bestfoods volumes, lower
sales volumes of higher margin flavored pasta products, plant
expansion costs, and higher durum wheat costs. Management
expects continued increases in gross profit as a result of
continued revenue increases. However, management expects gross
profit as a percentage of revenues to continue to decrease based
on the anticipated higher Bestfoods volumes and related revenue
share and further plant expansion costs.
Selling and Marketing Expense. Selling and marketing
expense decreased $1.9 million, or 40.9%, to $2.6 million for the
three-month period ended December 31, 1997, from $4.5 million for
the three-month period ended December 31, 1996. Selling and
marketing expense as a percentage of revenues decreased to 7.4%
for the three-month period ended December 31, 1997, from 15.1%
for the comparable prior year period. The decrease was primarily
due to the absence of product introduction costs incurred in the
Company's fiscal 1997 retail introduction of Pasta LaBella
flavored pasta. The Company did not incur product introduction
costs for the three-month period ended December 31, 1997,
compared to $1.4 million of such costs for the three-month period
ended December 31, 1996. The decrease in product introduction
costs was due to the completion of the flavored pasta 1997 launch
program.
General and Administrative Expense. General and
administrative expense increased $0.5 million, or 71.4%, to $1.2
million for the three-month period ended December 31, 1997, from
$0.7 million for the comparable period last year, an increase as
a percentage of revenues from 2.4% to 3.4%. The majority of the
increase in general and administrative expense relates to the
one-time realization of a $0.3 million property tax abatement in
South Carolina during the three-month period ended December 31,
1996. The benefit was realized in 1996 as a result of the
Company's reaching certain capital expansion levels in Columbia,
S.C. which qualified the Company for incremental property tax
abatements.
Operating Profit. Operating profit for the three-month
period ended December 31, 1997, was $5.7 million, increasing $2.4
million or 72.7% over the $3.3 million reported for the three-
month period ended December 31, 1996, and increased as a
percentage of revenues to 16.1% for the three-month period ended
December 31, 1997, from 11.2% for the three-month period ended
December 31, 1996 as a result of the factors discussed above.
Interest Expense. Interest expense for the three-month
period ended December 31, 1997, was $0.3 million, decreasing $2.3
million or 88.5% from the $2.6 million reported for the three-
month period ended December 31, 1996. The decrease was primarily
the result of reduced borrowings under the Company's credit
facility as a result of the $87 million in net proceeds realized
from the Company s October 1997 initial public offering of common
stock.
Income Tax. Income tax expense for the three-month period
ended December 31, 1997, was $2.1 million, increasing $1.8
million from the $0.3 million reported for the three-month period
ended December 31, 1996, and reflects an effective income tax
rate of approximately 38%.
Extraordinary Item. During the three-month period ended
December 31, 1997, the Company incurred a $2.3 million (net of
tax) extraordinary loss due to the write-off of deferred debt
issuance costs in conjunction with the extinguishment and
restructuring of the Company's principal bank credit agreement.
There was no such item for the three-month period ended December
31, 1996.
Net Income. Net income for the three-month period ended
December 31, 1997, was $1.0 million, increasing $0.6 million or
150% from the $0.4 million reported for the three-month period
ended December 31, 1996. Diluted earnings per common share
before the extraordinary item was $0.19 per share for the three-
month period ended December 31, 1997 compared to $0.04 per share
for the three-month period ended December 31, 1996. Diluted
earnings per share after the extraordinary item was $0.06 per
share for the three-month period ended December 31, 1997 compared
to $0.04 per share in the comparable prior year period.
Financial Condition and Liquidity
The Company's primary sources of liquidity are cash provided
by operations and borrowings under its credit facility. The
Company received approximately $86.7 million in net proceeds from
the October 1997 initial public offering, which was used to
reduce indebtedness. Cash and temporary investments totaled $1.7
million, and working capital totaled $14.1 million on December
31, 1997.
The Company's net cash provided by operating activities
totaled $3.7 million for the three-month period ended December
31, 1997 compared to $2.5 million for the three-month period
ended December 31, 1996. This increase of $1.2 million was
primarily due to higher net income and the non-cash extraordinary
loss due to early extinguishment of debt, offset by an increase
in working capital.
Cash used in investing activities principally relates to the
Company's investments in manufacturing, distribution and milling
assets. Capital expenditures were $26.7 million for the three-
month period ended December 31, 1997 compared to $0.8 million in
the comparable prior year period. The increase in spending for
the three-month period ended December 31, 1997 was a result of
the Company s expenditures toward its $86.0 million South
Carolina and Missouri capital expansion programs, which the
Company expects to complete during fiscal year 1998. Total
spending to date related to the aforementioned capital expansion
programs is $49.6 million.
Net cash provided by financing activities was $21.9 million
for the three-month period ended December 31, 1997 compared to
net cash used of $1.8 million for the three-month period ended
December 31, 1996. The $21.9 million is primarily a result of
(1) $86.7 million in net proceeds from the October 1997 initial
public offering and (2) $21.8 million proceeds from issuance of
debt (net of $0.3 million deferred debt issuance costs) offset by
(3) $86.2 million debt repayment.
The Company currently uses cash to fund capital
expenditures, repayments of debt and working capital
requirements. The Company expects that future cash requirements
will principally be for capital expenditures, repayments of
indebtedness and working capital requirements.
The Company has current commitments for $17.5 million in raw
material purchases for fiscal year 1998 and has approximately
$36.4 million in expenditures remaining under the previously
referenced $86.0 million capital expansion programs. The Company
anticipates the capital expansion programs will be fully funded
by the end of fiscal year 1998. The Company expects to fund
these commitments from operations and borrowings under the credit
facility. The credit facility currently has a credit commitment
of $150 million and has scheduled commitment reductions which
begin at the end of fiscal year 1999. At this time, the current
and projected borrowings under the credit facility do not exceed
the facility's available commitment. The facility matures at the
end of fiscal year 2002. The Company anticipates that any
borrowing outstanding at that time will be satisfied with funds
from operations or will be refinanced. The Company currently has
no other material commitments.
Management believes that net cash provided by operating and
financing activities will be sufficient to meet the Company's
expected capital and liquidity needs for the foreseeable future.
Year 2000 Compliance
____________________
Many computer software and hardware systems currently are
not, or will or may not be, able to read, calculate or output
correctly using dates after 1999, and such systems will require
significant modifications in order to be "year 2000 compliant."
This issue may adversely affect the operations and financial
performance of the Company because its computer systems are an
integral part of the Company's manufacturing and distribution
activities as well as its accounting and other information
systems and because the Company will have to divert financial
resources and personnel to address this issue.
The Company has reviewed its computer hardware and software
systems and has recently begun upgrading those systems that it
has identified as not being year 2000 compliant. The existing
systems will be upgraded either through modification or
replacement. The Company currently anticipates this upgrading to
be completed during the current calendar year. The Company has
alternate plans in the event that critical system upgrading is
not completed on time.
Although the Company is not aware of any material
operational impediments associated with upgrading its computer
hardware and software systems to be year 2000 compliant, the
Company cannot make any assurances that the upgrade of the
Company's computer systems will be completed on schedule, that
the upgraded systems will be free of defects or that the
Company's alternate plans will meet the Company's needs. If any
such risks materialize, the Company could experience material
adverse consequences, material costs or both.
Year 2000 compliance may also adversely affect the
operations and financial performance of the Company indirectly by
causing complications of, or otherwise affecting, the operations
of any one or more of the Company's suppliers and customers. The
Company intends to contact its significant suppliers and
customers in the first half of calendar year 1998 in an attempt
to identify any potential year 2000 compliance issues with them.
The Company is currently unable to anticipate the magnitude of
the operational or financial impact on the Company of year 2000
compliance issues with its suppliers and customers.
The Company expects to incur approximately $100,000 in each
fiscal quarter beginning with the second quarter of 1998 through
the first quarter of 1999 to resolve the Company's year 2000
compliance issues. All expenses incurred in connection with year
2000 compliance will be expensed as incurred, other than
acquisitions of new software or hardware, which will be
capitalized.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-------------------------------
Not applicable
Item 2. Changes in Securities
-------------------------------
Not applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
-------------------------------
On October 6, 1997, the security holders of the Company
adopted by written consent resolutions approving the
Company's Amended and Restated Certificate of
Incorporation, Amended and Restated Shareholders'
Agreement and 1997 Equity Incentive Plan. All twelve
holders of the outstanding shares of common stock, no
par value per share, approved such resolutions.
Twenty-nine holders of the issued and outstanding
shares of Class A Common Stock, par value $0.01 per
share, holding at least 80 percent of the Class A
Common Stock approved such resolutions and four holders
of the Class A Common Stock abstained.
Item 5. Other information
-------------------------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
-------------------------------
Exhibits.
Exhibit No. 10 Amended and Restated
$150,000,000 revolving credit facility dated
October 17, 1997 by and between the Company
and Bankers Trust is attached hereto as
Exhibit 10. Such agreement replaces the
Company's Amended and Restated Revolving
Credit Agreement dated April 11, 1997 (which
is Exhibit 10.1 to the Company's Annual
report on Form 10-K for the year ended
October 3, 1997).
Exhibit No. 27 Financial Data Schedule
Reports on Form 8-K.
The Company filed a report on Form 8-K dated
October 29, 1997, which sets forth on Exhibit
99 cautionary statements identifying
significant factors that could cause the
Company's actual operating results or
management's plans to materially differ from
those projected in any forward-looking
statements, whether oral or written, made by
or on behalf of the Company.
<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 thereunto duly authorized.
AMERICAN ITALIAN PASTA COMPANY
January 29, 1998 /s/ Timothy S. Webster
_____________________ __________________________________
Date Timothy S. Webster
President and Chief Executive Officer
(Principal Executive Officer)
January 29, 1998 /s/ David E. Watson
_____________________ __________________________________
Date David E. Watson
Executive Vice President and Chief
Financial Officer, Treasurer and
Secretary
(Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
_____________ _____________________________
10 Amended and Restated Revolving
Credit Facility dated October 17, 1997
27 Financial Data Schedule
CREDIT AGREEMENT
among
AMERICAN ITALIAN PASTA COMPANY,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as ARRANGER and AGENT
Dated as of October 30, 1992
and
Amended and Restated as of July 1, 1994
and
Amended and Restated as of February 26, 1996
and
Amended and Restated as of April 11, 1997
and further
Amended and Restated as of October 17, 1997
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Amount and Terms of Credit . . . . . . . . . . . 1
1.01 The Commitments . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing . . . . . . . . . 4
1.03 Notice of Borrowing . . . . . . . . . . . . . . . 4
1.04 Disbursement of Funds . . . . . . . . . . . . . . 5
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . 6
1.06 Conversions . . . . . . . . . . . . . . . . . . . 7
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . 7
1.08 Interest . . . . . . . . . . . . . . . . . . . . . 7
1.09 Interest Periods . . . . . . . . . . . . . . . . . 8
1.10 Increased Costs; Illegality; etc. . . . . . . . . 9
1.11 Compensation . . . . . . . . . . . . . . . . . . . 12
1.12 Replacement of Banks . . . . . . . . . . . . . . . 13
Section 2. Letters of Credit . . . . . . . . . . . . . . . . 14
2.01 Letters of Credit . . . . . . . . . . . . . . . . 14
2.02 Minimum Stated Amount . . . . . . . . . . . . . . 16
2.03 Letter of Credit Requests . . . . . . . . . . . . 16
2.04 Letter of Credit Participations . . . . . . . . . 17
2.05 Agreement to Repay Letter of Credit Drawings . . . 19
2.06 Increased Costs . . . . . . . . . . . . . . . . . 20
Section 3. Commitment Fees; Fees; Reductions of
Commitment . . . . . . . . . . . . . . . . . . . 21
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . 21
3.02 Voluntary Termination of Unutilized Commitments . 23
3.03 Mandatory Reduction of Commitments . . . . . . . . 24
Section 4. Prepayments; Payments; Taxes . . . . . . . . . . 25
4.01 Voluntary Prepayments . . . . . . . . . . . . . . 25
4.02 Mandatory Repayments . . . . . . . . . . . . . . . 26
4.03 Method and Place of Payment . . . . . . . . . . . 28
4.04 Net Payments . . . . . . . . . . . . . . . . . . . 28
Section 5. Conditions Precedent to the Restatement Effective
Date and to All Credit Events on the Restatement
Effective Date . . . . . . . . . . . . . . . . . 30
5.01 Execution of Agreement; Notes . . . . . . . . . . 30
5.02 Consummation of the Initial Public Offering . . . 31
5.03 Repayment of Existing Loans; Payment of Fees;
etc. . . . . . . . . . . . . . . . . . . . . . . 31
5.04 Officer's Certificate . . . . . . . . . . . . . . 31
5.05 Opinion of Counsel . . . . . . . . . . . . . . . . 31
5.06 Corporate Documents; Proceedings . . . . . . . . . 32
5.07 Employee Benefit Plans; Shareholders'Agreements;
Collective Bargaining Agreements; Tax Sharing
Agreements; Debt Agreements; CPC Contract . . . . 32
5.08 Adverse Change; Approvals; etc. . . . . . . . . . 33
5.09 Litigation . . . . . . . . . . . . . . . . . . . . 33
5.10 Fees; etc. . . . . . . . . . . . . . . . . . . . . 34
5.11 Consent Letter . . . . . . . . . . . . . . . . . . 34
5.12 Financial Statements . . . . . . . . . . . . . . . 34
5.13 Existing Indebtedness . . . . . . . . . . . . . . 34
5.14 Subsidiaries . . . . . . . . . . . . . . . . . . . 34
Section 6. Conditions Precedent to the Restatement Effective
Date and to All Credit Events . . . . . . . . . . 35
6.01 No Default; Representations and Warranties . . . . 35
6.02 Notice of Borrowing; Letter of Credit Request . . 35
6.03 Adverse Change; etc. . . . . . . . . . . . . . . . 35
6.04 Litigation . . . . . . . . . . . . . . . . . . . . 35
Section 7.Representations, Warranties and Agreements . . . . 36
7.01 Corporate Status . . . . . . . . . . . . . . . . . 36
7.02 Corporate Power and Authority . . . . . . . . . . 36
7.03 No Violation . . . . . . . . . . . . . . . . . . . 37
7.04 Governmental Approvals . . . . . . . . . . . . . . 37
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc. . . . . . . . . . . 37
7.06 Litigation . . . . . . . . . . . . . . . . . . . . 39
7.07 True and Complete Disclosure . . . . . . . . . . . 39
7.08 Use of Proceeds; Margin Regulations . . . . . . . 39
7.09 Tax Returns and Payments . . . . . . . . . . . . . 39
7.10 Compliance with ERISA . . . . . . . . . . . . . . 40
7.11 Subsidiaries . . . . . . . . . . . . . . . . . . . 41
7.12 Representations and Warranties in Documents
and in Existing Credit Agreement . . . . . . . . 41
7.13 Properties . . . . . . . . . . . . . . . . . . . . 41
7.14 Capitalization . . . . . . . . . . . . . . . . . . 41
7.15 Compliance with Statutes; etc. . . . . . . . . . . 42
7.16 Investment Company Act . . . . . . . . . . . . . . 42
7.17 Public Utility Holding Company Act . . . . . . . . 42
7.18 Environmental Matters . . . . . . . . . . . . . . 42
7.19 Labor Relations . . . . . . . . . . . . . . . . . 43
7.20 Intellectual Property; Licenses; Franchises;
Formulas . . . . . . . . . . . . . . . . . . . . 43
7.21 Indebtedness . . . . . . . . . . . . . . . . . . . 44
7.22 Restrictions on or Relating to
Subsidiaries . . . . . . . . . . . . . . . . . . 44
7.23 Enterprise Zone . . . . . . . . . . . . . . . . . 44
7.24 Purchase or Other Commitments and
Outstanding Bids . . . . . . . . . . . . . . . . 45
Section 8. Affirmative Covenants . . . . . . . . . . . . . . 45
8.01 Information Covenants . . . . . . . . . . . . . . 46
8.02 Books, Records and Inspections . . . . . . . . . . 49
8.03 Maintenance of Property, Insurance . . . . . . . . 49
8.04 Corporate Franchises . . . . . . . . . . . . . . . 49
8.05 Compliance with Statutes, etc. . . . . . . . . . . 49
8.06 Compliance with Environmental Laws . . . . . . . . 50
8.07 ERISA . . . . . . . . . . . . . . . . . . . . . . 51
8.08 End of Fiscal Years; Fiscal Quarters . . . . . . . 52
8.09 Performance of Obligations . . . . . . . . . . . . 52
8.10 Payment of Taxes . . . . . . . . . . . . . . . . . 52
8.11 Use of Proceeds . . . . . . . . . . . . . . . . . 52
8.12 Register . . . . . . . . . . . . . . . . . . . . . 53
8.13 Further Assurances . . . . . . . . . . . . . . . . 53
Section 9.Negative Covenants . . . . . . . . . . . . . . . . 53
9.01 Liens . . . . . . . . . . . . . . . . . . . . . . 53
9.02 Consolidation; Merger; Purchase or Sale of
Assets; etc. . . . . . . . . . . . . . . . . . . 55
9.03 Dividends . . . . . . . . . . . . . . . . . . . . 56
9.04 Leases . . . . . . . . . . . . . . . . . . . . . . 57
9.05 Indebtedness . . . . . . . . . . . . . . . . . . . 57
9.06 Advances, Investments and Loans . . . . . . . . . 58
9.07 Transactions with Affiliates . . . . . . . . . . . 59
9.08 Cash Flow Coverage Ratio . . . . . . . . . . . . . 59
9.09 Minimum Consolidated Net Worth . . . . . . . . . . 59
9.10 Leverage Ratio . . . . . . . . . . . . . . . . . . 60
9.11 Limitation on Voluntary Payments and
Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. . . . . . . . . . . . . . 60
9.12 Limitation on Certain Restrictions on
Subsidiaries . . . . . . . . . . . . . . . . . . 61
9.13 Business . . . . . . . . . . . . . . . . . . . . . 61
9.14 Limitation on Creation of Subsidiaries . . . . . . 61
Section 10. Events of Default . . . . . . . . . . . . . . . . 61
10.01 Payments . . . . . . . . . . . . . . . . . . . . . 62
10.02 Representations; etc. . . . . . . . . . . . . . . 62
10.03 Covenants . . . . . . . . . . . . . . . . . . . . 62
10.04 Default Under Other Agreements . . . . . . . . . . 62
10.05 Bankruptcy; etc. . . . . . . . . . . . . . . . . . 62
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . 63
10.07 Judgments . . . . . . . . . . . . . . . . . . . . 63
10.08 Change of Control . . . . . . . . . . . . . . . . 64
Section 11. Definitions and Accounting Terms . . . . . . . . 64
11.01 Defined Terms . . . . . . . . . . . . . . . . . . 64
Section 12. The Agent . . . . . . . . . . . . . . . . . . . . 86
12.01 Appointment . . . . . . . . . . . . . . . . . . . 86
12.02 Nature of Duties . . . . . . . . . . . . . . . . . 86
12.03 Lack of Reliance on the Agent . . . . . . . . . . 86
12.04 Certain Rights of the Agent . . . . . . . . . . . 87
12.05 Reliance . . . . . . . . . . . . . . . . . . . . . 87
12.06 Indemnification . . . . . . . . . . . . . . . . . 87
12.07 The Agent in Its Individual Capacity . . . . . . . 88
12.08 Holders . . . . . . . . . . . . . . . . . . . . . 88
12.09 Resignation by the Agent . . . . . . . . . . . . . 88
12.10 Documentation Agent . . . . . . . . . . . . . . . 89
Section 13. Miscellaneous . . . . . . . . . . . . . . . . . . 89
13.01 Payment of Expenses; etc. . . . . . . . . . . . . 89
13.02 Right of Setoff . . . . . . . . . . . . . . . . . 90
13.03 Notices . . . . . . . . . . . . . . . . . . . . . 90
13.04 Benefit of Agreement . . . . . . . . . . . . . . . 91
13.05 No Waiver; Remedies Cumulative . . . . . . . . . . 93
13.06 Payments Pro Rata . . . . . . . . . . . . . . . . 93
13.07 Calculations; Computations . . . . . . . . . . . . 94
13.08 Governing Law; Submission to Jurisdiction;
Venue; Waiver of Jury Trial . . . . . . . . . . . 94
13.09 Counterparts . . . . . . . . . . . . . . . . . . . 96
13.10 Effectiveness . . . . . . . . . . . . . . . . . . 96
13.11 Headings Descriptive . . . . . . . . . . . . . . . 96
13.12 Amendment or Waiver . . . . . . . . . . . . . . . 96
13.13 Survival . . . . . . . . . . . . . . . . . . . . . 98
13.14 Domicile of Loans . . . . . . . . . . . . . . . . 98
13.15 Confidentiality . . . . . . . . . . . . . . . . . 98
13.16 Addition of New Banks; Original Notes . . . . . . 99
SCHEDULE I Commitments
SCHEDULE II Existing Standby Letters of Credit
SCHEDULE III Real Property
SCHEDULE IV Material Liabilities
SCHEDULE V Properties
SCHEDULE VI Environmental Matters
SCHEDULE VII Intellectual Property Rights
SCHEDULE VIII Existing Obligations
SCHEDULE IX Insurance
SCHEDULE X Existing Liens
SCHEDULE XI Bank Addresses
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Revolving Note
EXHIBIT B-2 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Sonnenschein Nath &
Rosenthal
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Consent Letter
EXHIBIT H Form of Assignment and Assumption Agreement
<PAGE>
CREDIT AGREEMENT, dated as of October 30, 1992, amended
and restated as of July 1, 1994, further amended and restated as
of February 26, 1996, further amended and restated as of April
11, 1997, and further amended and restated as of October 17,
1997, among AMERICAN ITALIAN PASTA COMPANY, a corporation
organized and existing under the laws of the State of Delaware
(the "Company"), the Banks party hereto from time to time and
BANKERS TRUST COMPANY, as Arranger and Agent (all capitalized
terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, the Company, the Existing Banks and the
Existing Agent are parties to a Credit Agreement, dated as of
October 30, 1992, amended and restated as of July 1, 1994,
further amended and restated as of February 26, 1996, and further
amended and restated as of April 11, 1997 (as the same has been
amended, modified or supplemented to, but not including, the
Restatement Effective Date, the "Existing Credit Agreement");
WHEREAS, the Company has requested that the Existing
Credit Agreement be further amended and restated and the Banks
and the Agent are willing to amend and restate the same upon the
terms and conditions set forth below.
NOW, THEREFORE, the parties hereto agree that the
Existing Credit Agreement shall be and hereby is further amended
and restated in its entirety as follows:
Section 1. AMOUNT AND TERMS OF CREDIT.
--------------------------
1.01 THE COMMITMENTS. (A) Subject to and upon the
terms and conditions set forth herein, each Bank with a Revolving
Loan Commitment severally agrees at any time and from time to
time after the Restatement Effective Date and prior to the Final
Maturity Date, to make a revolving loan or loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the
Company, which Revolving Loans:
(I) shall, at the option of the Company, be Base Rate
Loans or Eurodollar Loans, PROVIDED that except as otherwise
specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of
the same Type;
(II) may be repaid and reborrowed in accordance with
the provisions hereof; and
(III) shall not exceed for any Bank at any time
outstanding that aggregate principal amount which, when
added to (A) the aggregate amount of all other outstanding
Revolving Loans made by such Bank and (B) the product of (i)
such Bank's RL Percentage, if any, and (ii) the Swingline
Loans then outstanding and the Letter of Credit Outstandings
(exclusive of Unpaid Drawings relating to Letters of Credit
which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of
Revolving Loans or Swingline Loans) at such time, equals the
Revolving Loan Commitment of such Bank at such time.
(B) Subject to and upon the terms and conditions
herein set forth, the Swingline Bank agrees to make at any time
and from time to time after the Initial Borrowing Date and prior
to the Swingline Expiry Date, a loan or loans to the Borrower
(each, a "Swingline Loan" and, collectively, the "Swingline
Loans"), which Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) shall be denominated in U.S. Dollars;
(iii) may be repaid and reborrowed in accordance with
the provisions hereof;
(iv) shall not exceed in aggregate principal amount at
any time outstanding, when combined with the aggregate prin-
cipal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings
relating to Letters of Credit which are repaid with the
proceeds of, and simultaneously with the incurrence of,
Revolving Loans or Swingline Loans) at such time, an amount
equal to the Total Revolving Loan Commitment then in effect;
and
(v) shall not exceed in aggregate principal amount at
any time outstanding the Maximum Swingline Amount.
The Swingline Bank shall not be obligated to make any Swingline
Loans at a time when a Bank Default exists unless the Swingline
Bank has entered into arrangements satisfactory to it and the
Borrower to eliminate the Swingline Bank's risk with respect to
the Defaulting Bank's or Banks' participation in such Swingline
Loans, including by cash collateralizing such Defaulting Bank's
or Banks' RL Percentage of the outstanding Swingline Loans. The
Swingline Bank will not make a Swingline Loan after it has
received written notice from the Borrower or the Required Banks
stating that a Default or an Event of Default exists until such
time as the Swingline Bank shall have received a written notice
of (i) rescission of such notice from the party or parties
originally delivering the same or (ii) a waiver of such Default
or Event of Default from the Required Banks (or all the Banks to
the extent required by Section 13.12).
(C) On any Business Day, the Swingline Bank may, in
its sole discretion, give notice to the RL Banks that its
outstanding Swingline Loans shall be funded with a Borrowing of
Revolving Loans (PROVIDED, that each such notice shall be deemed
to have been automatically given upon the occurrence of a Default
or an Event of Default under Section 10.05 or upon the exercise
of any of the remedies provided in the last paragraph of Section
10), in which case a Borrowing of Revolving Loans constituting
Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all
Banks PRO RATA based on each Bank's RL Percentage, and the
proceeds thereof shall be applied directly to repay the Swingline
Bank for such outstanding Swingline Loans. Each Bank hereby
irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the
date specified in writing by the Swingline Bank notwithstanding
(i) that the amount of the Mandatory Borrowing may not comply
with the minimum amount for Borrowings otherwise required
hereunder, (ii) whether any conditions specified in Sections 5
or 6 are then satisfied, (iii) whether a Default or an Event of
Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) any reduction in the Total Revolving
Loan Commitment after any such Swingline Loans were made. In the
event that any Mandatory Borrowing cannot for any reason be made
on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under
the Bankruptcy Code in respect of the Borrower), each Bank (other
than the Swingline Bank) hereby agrees that it shall forthwith
purchase from the Swingline Bank (without recourse or warranty)
such assignment of the outstanding Swingline Loans as shall be
necessary to cause the Banks to share in such Swingline Loans
ratably based upon their respective RL Percentages, PROVIDED that
(x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Bank until the date the respective
assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the Bank purchasing
same from and after such date of purchase and (y) at the time any
purchased assignment pursuant to this sentence is actually made,
the purchasing Bank shall be required to pay the Swingline Bank
interest on the principal amount of assignment purchased for each
day from and including the day upon which the Mandatory Borrowing
would otherwise have occurred but excluding the date of payment
for such assignment, at the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
1.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate
principal amount of each Borrowing of Loans shall not be less
than $500,000 and, if greater, shall be in an integral multiple
of $100,000; PROVIDED, HOWEVER, that the aggregate principal
amount of each Borrowing of Revolving Loans may be in such lesser
amounts as is acceptable to all Banks and the Agent and PROVIDED
FURTHER, that Mandatory Borrowings shall be in the amounts
required by Section 1.01(C). More than one Borrowing may occur
on the same date, but at no time shall there be outstanding more
than twenty Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Company
desires to make a Borrowing hereunder (excluding Borrowings of
Swingline Loans and Mandatory Borrowings) it shall give the Agent
at its Payment Office at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans and at least three Business
Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Eurodollar Loans to be
made hereunder, PROVIDED that any such notice shall be deemed to
have been given on a certain day only if given before 12:00 Noon
(New York time) on such day. Each such notice (each, a "Notice
of Borrowing"), except as otherwise expressly provided in Section
1.10, shall be irrevocable and, in the case of each written
notice and each confirmation of telephonic notice, shall be given
by the Company in the form of Exhibit A, appropriately completed
to specify (i) the aggregate principal amount of the Loans to be
made pursuant to such Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day) and (iii) whether the Loans being
made pursuant to such Borrowing are to be initially maintained as
Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
initial Interest Period to be applicable thereto. The Agent
shall promptly give each Bank notice of such proposed Borrowing,
of such Bank's proportionate share thereof and of the other
matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Bor-
rowing of Swingline Loans hereunder, it shall give the Swingline
Bank not later than 12:00 Noon (New York time) on the day such
Swingline Loan is to be made, written notice (or telephonic
notice promptly confirmed in writing) of each Swingline Loan to
be made hereunder. Each such notice shall be irrevocable and
shall specify in each case (x) the date of such Borrowing (which
shall be a Business Day) and (y) the aggregate principal amount
of the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the
notice specified in Section 1.01(C), with the Borrower irre-
vocably agreeing, by its incurrence of any Swingline Loan, to the
making of Mandatory Borrowings as set forth in such Section.
(c) Without in any way limiting the obligation of the
Company to confirm in writing any telephonic notice of such
Borrowing of Loans, the Bank or the Swingline Bank, as the case
may be, may act without liability upon the basis of telephonic
notice of such Borrowing, believed by such Bank in good faith to
be from a President, a Vice President, a Treasurer or an
Assistant Treasurer of the Company prior to receipt of written
confirmation. In each such case, the Company hereby waives the
right to dispute the Bank's or the Swingline Bank's record of the
terms of such telephonic notice of such Borrowing of Loans.
1.04 DISBURSEMENT OF FUNDS. No later than 12:00 Noon
(New York time) on the date specified in each Notice of Borrowing
(or (x) in the case of Swingline Loans, no later than 3:00 P.M.
(New York time) on the date specified in Section 1.03(b)(i), or
(y) in the case of Mandatory Borrowings, no later than 12:00 Noon
(New York time) on the date specified in Section 1.01(C)), each
Bank will make available its PRO RATA portion of each such
Borrowing requested to be made on such date. All such amounts
shall be made available in Dollars and in immediately available
funds at the Payment Office of the Agent, and the Agent will make
available to the Company at the Payment Office the aggregate of
the amounts so made available by the Banks. Unless the Agent
shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the
Agent such Bank's portion of any Borrowing to be made on such
date, the Agent may assume that such Bank has made such amount
available to the Agent on such date of Borrowing and the Agent,
in reliance upon such assumption, may (in its sole discretion and
without any obligation to do so) make available to the Company a
corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefore, the Agent shall
notify the Company and the Company shall immediately pay such
corresponding amount to the Agent. The Agent shall also be
entitled to recover on demand from such Bank or the Company, as
the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made
available by the Agent to the Company until the date such
corresponding amount is recovered by the Agent, at a rate per
annum equal to (i) if recovered from such Bank, the cost to the
Agent of acquiring overnight Federal funds and (ii) if recovered
from the Company, the rate of interest applicable to the respec-
tive Borrowing, as determined pursuant to Section 1.08. Nothing
in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights
which the Company may have against any Bank as a result of any
failure by such Bank to make Loans hereunder.
1.05 NOTES. (a) The Company's obligation to pay the
principal of, and interest on, all the Loans made by each Bank
shall be evidenced by (i) if a Revolving Loan, a promissory note
duly executed and delivered by the Company substantially in the
form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes") and (ii) if Swingline Loans, by a
promissory note substantially in the form of Exhibit B-2 with
blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The Revolving Note issued to each Bank with a
Revolving Loan Commitment shall (i) be executed by the Company,
(ii) be payable to the order of such Bank and be dated the date
of issuance thereof, (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Bank and be payable in
the principal amount of the Revolving Loans evidenced thereby
from time to time, (iv) mature on the Final Maturity Date, (v)
bear interest as provided in the appropriate clause of Section
1.08 in respect of the Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (vi) be subject to mandatory
repayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement.
(c) The Swingline Note issued to the Swingline Bank
shall (i) be executed by the Borrower, (ii) be payable to the
order of the Swingline Bank or its registered assigns and be
dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Maximum Swingline Amount and be payable in
the principal amount of the Swingline Loans evidenced thereby,
(iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in Section 1.08 in respect of the Base Rate Loans evi-
denced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01 and mandatory repayment as provided in
Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) Each Bank will note on its internal records the
amount of each Loan made by it and each payment in respect
thereof and will prior to any transfer of any of its Notes
endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such
notation or endorsement shall not affect the Company's
obligations in respect of such Loans.
1.06 CONVERSIONS. The Company shall have the option
to convert all or a portion equal to at least $500,000, of the
outstanding principal amount of the Loans (other than Swingline
Loans which may not be converted pursuant to this Section 1.06)
made pursuant to one or more Borrowings of one Type of Loan into
a Borrowing or Borrowings of the other Type of Loan, PROVIDED
that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable to the Loans being
converted and no such partial conversion of Eurodollar Loans
shall reduce the outstanding principal amount of such Eurodollar
Loans made pursuant to a single Borrowing to less than
$1,000,000, (ii) Base Rate Loans may only be converted into Euro-
dollar Loans if no Default or Event of Default is in existence on
the date of the conversion and (iii) no conversion pursuant to
this Section 1.06 shall result in a greater number of Borrowings
than is permitted under Section 1.02. Each such conversion shall
be effected by the Company by giving the Agent at its Notice
Office prior to 12:00 Noon (New York time) at least three
Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing(s)
pursuant to which such Loans were made and, if to be converted
into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Agent shall give each Bank prompt notice
of any such proposed conversion affecting any of its Loans. Upon
any such conversion the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the out-
standing principal amount of the Loans being converted.
1.07 PRO RATA BORROWINGS. All Borrowings of Loans
(other than Swingline Loans) under this Agreement shall be incur-
red from the Banks PRO RATA on the basis of their respective
Commitments. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder regardless of the failure of
any other Bank to make its Loans hereunder.
1.08 INTEREST. (a) The Company agrees to pay
interest in respect of the unpaid principal amount of each Base
Rate Loan from the date the proceeds thereof are made available
to the Company until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Base Rate in
effect from time to time.
(b) The Company agrees to pay interest in respect of
the unpaid principal amount of each Eurodollar Loan from the date
the proceeds thereof are made available to the Company until the
maturity thereof (whether by acceleration or otherwise) at a rate
per annum which shall, during each Interest Period applicable
thereto, be equal to the sum of the Applicable Margin plus the
Quoted Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan and any other
overdue amount payable hereunder shall, in each case, bear
interest at a rate per annum equal to the greater of (x) 2% per
annum in excess of the rate otherwise applicable to Base Rate
Loans from time to time and (y) the rate which is 2% in excess of
the rate then borne by such Loans, in each case with such inter-
est to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in
arrears on each Quarterly Payment Date, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period appli-
cable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals
after the first day of such Interest Period and (iii) in respect
of each Loan, on any repayment (on the amount repaid), at
maturity (whether by acceleration or otherwise) and, after such
maturity, on demand. Notwithstanding anything to the contrary
contained in this Agreement or in the Existing Credit Agreement,
all accrued (but theretofore unpaid) interest with respect to
Existing Loans which were outstanding on the Restatement
Effective Date immediately prior to giving effect thereto shall
be payable on the Restatement Effective Date.
(e) Upon each Interest Determination Date, the Agent
shall determine the Quoted Rate for each Interest Period
applicable to Eurodollar Loans and shall promptly notify the
Company and the Banks thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all
parties hereto.
1.09 INTEREST PERIODS. At the time it gives any
Notice of Borrowing or Notice of Conversion in respect of the
making of, or conversion into, a Borrowing of any Eurodollar Loan
(in the case of the initial Interest Period applicable thereto)
or prior to 12:00 Noon (New York time) on the third Business Day
prior to the expiration of an Interest Period applicable to such
Eurodollar Loan (in the case of any subsequent Interest Period),
the Company shall have the right to elect, by giving the Agent
notice thereof, the interest period (each an "Interest Period")
applicable to such Eurodollar Loan, which Interest Period shall,
at the option of the Company, be a one, two, three, six or, to
the extent approved by each Bank, in its sole discretion, a
twelve month period, PROVIDED that:
(i) all Eurodollar Loans comprising a single Borrowing
shall at all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar
Loan shall commence on the date of Borrowing of such Loan
(including the date of any conversion thereto from a
Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Loan shall commence
on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar
Loan begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on
a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; PROVIDED,
HOWEVER, that if any Interest Period for a Eurodollar Loan
would otherwise expire on a day which 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;
(v) no Interest Period may be selected at any time
when any Default or Event of Default is then in existence;
(vi) no Interest Period shall be selected which
extends beyond the Final Maturity Date; and
(vii) no Interest Period shall be selected for a
Borrowing of Eurodollar Loans prior to the Initial Revolving
Loan Eurodollar Loan Borrowing Date.
If upon the expiration of any Interest Period applic-
able to a Borrowing of Eurodollar Loans, the Company has failed
to elect, or is not permitted to elect, a new Interest Period to
be applicable to such Eurodollar Loans as provided above or a
Default or an Event of Default then exists, the Company shall be
deemed to have elected to convert such Eurodollar Loans into Base
Rate Loans effective as of the expiration date of such current
Interest Period.
1.10 INCREASED COSTS; ILLEGALITY; ETC. (a) In the
event that any Bank shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding
upon all parties hereto but, with respect to clause (i) below,
may be made only by the Agent):
(i) on any Interest Determination Date that, by reason
of any changes arising after the Original Effective Date
affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Quoted
Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable
hereunder with respect to any Eurodollar Loan because of (x)
any change since the Original Effective Date in any appli-
cable law or governmental rule, regulation, order, guideline
or request (whether or not having the force of law) or in
the interpretation or administration thereof and including
the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of
taxation of payments to any Bank of the principal of or
interest on the Notes or any other amounts payable hereunder
(except for (a) changes in the rate of tax on, or determined
by reference to, the net income or profits of such Bank
imposed by the jurisdiction in which its principal office or
applicable lending office is located and (b) United States
withholding taxes, which shall be governed by the provisions
of Section 4.04) or (B) a change in official reserve
requirements (but, in all events, excluding reserves
required under Regulation D to the extent included in the
computation of the Quoted Rate) and/or (y) other
circumstances since the Original Effective Date affecting
such Bank or the interbank Eurodollar market or the position
of such Bank in such market (excluding, however, differences
in a Bank's cost of funds from those of the Agent which are
solely the result of credit differences between such Bank
and the Agent); or
(iii) at any time, that the making or continuance of
any Eurodollar Loan has been made (x) unlawful by any law or
governmental rule, regulation or order, (y) impossible by
compliance by any Bank in good faith with any governmental
request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after
the Original Effective Date which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case
of clause (i) above) shall promptly give notice (by telephone
confirmed in writing) to the Company and, except in the case of
clause (i) above, to the Agent of such determination (which
notice the Agent shall promptly transmit to each of the other
Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as
the Agent notifies the Company and the Banks that the
circumstances giving rise to such notice by the Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given
by the Company with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be
deemed rescinded by the Company, (y) in the case of clause (ii)
above, the Company shall pay to such Bank, upon written demand
therefore, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as
shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the
Company by such Bank shall, absent manifest error, be final and
conclusive and binding on all the parties hereto; however, the
failure to give any such notice (unless the respective Bank has
intentionally withheld or delayed such notice, in which case the
respective Bank shall not be entitled to receive additional
amounts pursuant to this Section 1.10(a)(y) for periods occurring
prior to the 180th day before the giving of such notice) shall
not release or diminish the Company's obligations to pay
additional amounts pursuant to this Section 1.10(a)(y)) and (z)
in the case of clause (iii) above, the Company shall take one of
the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law. In
determining such additional amounts pursuant to clause (y) of the
immediately preceding sentence, each Bank shall act reasonably
and in good faith and will, to the extent the increased costs or
reductions in amounts receivable relate to such Bank's loans in
general and are not specifically attributable to a Loan
hereunder, use averaging and attribution methods which are
reasonable and which cover all loans similar to the Loans made by
such Bank whether or not the loan documentation for such other
loans permits the Bank to receive increased costs of the type
described in this Section 1.10(a).
(b) At any time that any Eurodollar Loan is affected
by the circumstances described in Section 1.10(a)(ii) or (iii),
the Company may (and in the case of a Eurodollar Loan affected by
the circumstances described in Section 1.10(a)(iii) shall) either
(i) if the affected Eurodollar Loan is then being made initially
or pursuant to a conversion, by giving the Agent telephonic
notice (confirmed in writing) on the same date that the Company
was notified by the affected Bank or the Agent pursuant to Sec-
tion 1.10(a)(ii) or (iii), cancel the respective Borrowing, or
(ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' written notice to the Agent, require
the affected Bank to convert such Eurodollar Loan into a Base
Rate Loan, PROVIDED that if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant
to this Section 1.10(b).
(c) If at any time after the Original Effective Date,
any Bank determines that the introduction of or any change in any
applicable law or governmental rule, regulation, order, guideline
or request (whether or not having the force of law) concerning
capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the
amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank based on the
existence of such Bank's Commitment hereunder or its obligations
hereunder, then the Company shall pay to such Bank, upon its
written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for
the increased cost to such Bank or such other corporation or the
reduction in the rate of return to such Bank or such other corpo-
ration as a result of such increase of capital. In determining
such additional amounts, each Bank will act reasonably and in
good faith and will use averaging and attribution methods which
are reasonable and which will, to the extent the increased costs
or reduction in the rate of return relates to such Bank's commit-
ments or obligations in general and are not specifically
attributable to the Commitment and obligations hereunder, cover
all commitments and obligations similar to the Commitment and
obligations of such Bank hereunder whether or not the loan
documentation for such other commitments or obligations permits
the Bank to make the determination specified in this Section
1.10(c), and such Bank's determination of compensation owing
under this Section 1.10(c) shall, absent manifest error, be final
and conclusive and binding on all the parties hereto. Each Bank,
upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Company, which notice shall show the basis for
calculation of such additional amounts, although the failure to
give any such notice (unless the respective Bank has inten-
tionally withheld or delayed such notice, in which case the
respective Bank shall not be entitled to receive additional
amounts pursuant to this Section 1.10(c) for periods occurring
prior to the 180th day before the giving of such notice) shall
not release or diminish any of the Company's obligations to pay
additional amounts pursuant to this Section 1.10(c).
1.11 COMPENSATION. The Company shall compensate each
Bank, upon its written request (which request shall set forth the
basis for requesting such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required
by such Bank to fund its Eurodollar Loans) which such Bank may
sustain: (i) if for any reason (other than a default by such
Bank or the Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefore in
a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Company or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including, without limitation,
any repayment made pursuant to Section 4.02 and any repayment of
Existing Loans to occur on the Restatement Effective Date
pursuant to Section 5.03) of any of its Eurodollar Loans (or, in
the case of Existing Loans, eurodollar loans under the Existing
Credit Agreement) occurs on a date which is not the last day of
an Interest Period (or, in the case of Existing Loans, an
interest period under the Existing Credit Agreement) with respect
thereto; (iii) if any prepayment of any of its Eurodollar Loans
is not made on any date specified in a notice of prepayment given
by the Company; or (iv) as a consequence of (x) any other default
by the Company to repay its Loans when required by the terms of
this Agreement or any Note held by such Bank or (y) any election
made pursuant to Section 1.10(b). A Bank's basis for requesting
compensation pursuant to this Section 1.11, and a Bank's cal-
culations of the amounts thereof, shall, absent manifest error,
be final and conclusive and binding on all parties hereto.
1.12 REPLACEMENT OF BANKS. If any Bank (other than
the Agent) (x) is owed increased costs under Section 1.10(a)(ii)
or (iii), Section 1.10(c), Section 2.06 or Section 4.04
materially in excess of those of the other Banks or (y) refuses
to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been
approved by the Required Banks as provided in Section 13.12(b),
the Company shall have the right, if no Default or Event of
Default then exists, to replace such Bank (the "Replaced Bank")
with one or more other Eligible Transferee or Transferees
(collectively, the "Replacement Bank") acceptable to the Agent,
PROVIDED that:
(i) at the time of any replacement pursuant to
this Section 1.12, the Replacement Bank shall enter into one
or more assignment agreements, in form and substance
satisfactory to the Agent, pursuant to which the Replacement
Bank shall acquire all of the Commitment and outstanding
Loans of, and participations in Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the
sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to all Unpaid Drawings that have
been funded by (and not reimbursed to) such Replaced Bank,
together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01 hereof and (y) the appropriate Issuing Bank
an amount equal to such Replaced Bank's RL Percentage of any
Unpaid Drawing (which at such time remains an Unpaid
Drawing), to the extent such amount was not theretofore
funded by such Replaced Bank and (z) the Swingline Bank an
amount equal to such Replaced Bank's RL Percentage of any
Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Bank; and
(ii) all obligations of the Company owing to the
Replaced Bank (including, without limitation, such increased
costs and excluding those specifically described in clause
(i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in
full to such Replaced Bank concurrently with such
replacement.
Upon the execution of the respective assignment
documentation, the payment of amounts referred to in clauses (i)
and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes
executed by the Company, the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification and clawback
provisions under this Agreement, which shall survive as to such
Replaced Bank. Notwithstanding anything to the contrary con-
tained above, no Issuing Bank may be replaced hereunder at any
time while it has Letters of Credit outstanding hereunder unless
arrangements satisfactory to such Issuing Bank (including the
furnishing of a standby letter of credit in form and substance,
and issued by an issuer satisfactory to such Issuing Bank or the
furnishing of cash collateral in amounts and pursuant to arrange-
ments satisfactory to such Issuing Bank) have been made with
respect to such outstanding Letters of Credit.
Section 2. LETTERS OF CREDIT.
-----------------
2.01 LETTERS OF CREDIT. (a) Subject to and upon the
terms and conditions herein set forth, the Company may request
any Issuing Bank at any time and from time to time on and after
the Restatement Effective Date and prior to the Final Maturity
Date to issue, (x) for the account of the Company and for the
benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable
Indebtedness of the Company, an irrevocable standby letter of
credit in a form customarily used by such Issuing Bank or in such
other form as has been approved by the Company and such Issuing
Bank in support of said L/C Supportable Indebtedness (each such
standby letter of credit, a "Standby Letter of Credit" and
collectively, the "Standby Letters of Credit") and (y) for the
account of the Company and for the benefit of any obligee of
trade obligations of the Company, an irrevocable trade letter of
credit in a form customarily used by such Issuing Bank or in such
other form as has been approved by such Issuing Bank and the
Company, in support of trade obligations of the Company (each
such trade letter of credit, a "Trade Letter of Credit" and
collectively, the "Trade Letters of Credit," each Trade Letter of
Credit and each Standby Letter of Credit, a "Letter of Credit"
and the Trade Letters of Credit and the Standby Letters of
Credit, collectively, the "Letters of Credit"). All Letters of
Credit shall be denominated in Dollars. It is hereby
acknowledged and agreed that the standby letters of credit which
were issued by the respective Issuing Bank under the Original
Credit Agreement or the Existing Credit Agreement and which
remain outstanding on the Restatement Effective Date (the
"Existing Standby Letters of Credit") shall constitute Standby
Letters of Credit for all purposes of this Agreement and shall be
deemed issued, with the same maturity date, on the Restatement
Effective Date for purposes of Sections 2.04(a) and 3.01. The
Existing Standby Letters of Credit and the Stated Amounts and the
expiry dates thereof and the beneficiaries thereunder are
described on Schedule II.
(b) Each Issuing Bank hereby agrees, in its sole
discretion, that it will, and BTCo hereby agrees that, in the
event a requested Letter of Credit is not issued by any one of
the other Issuing Banks, it will (subject to the terms and con-
ditions contained herein), at any time and from time to time on
and after the Restatement Effective Date and prior to the Final
Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Company one or more
Letters of Credit, (x) in the case of Standby Letters of Credit,
in support of such L/C Supportable Indebtedness of the Company as
is permitted to remain outstanding without giving rise to a
Default or Event of Default hereunder and (y) in the case of
Trade Letters of Credit, in support of obligees of trade
obligations of the Company as referenced in Section 2.01(a);
PROVIDED that the respective Issuing Bank shall be under no obli-
gation to issue any Letter of Credit of the types described above
if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin
or restrain such Issuing Bank from issuing such Letter of
Credit or any requirement of law applicable to such Issuing
Bank or any request or directive (whether or not having the
force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or
request that such Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Bank with
respect to such Letter of Credit any restriction or reserve
or capital requirement (for which such Issuing Bank is not
otherwise compensated) not in effect on the Original
Effective Date, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuing
Bank as of the Original Effective Date, and which such
Issuing Bank in good faith deems material to it;
(ii) such Issuing Bank shall have received notice from
any Bank prior to the issuance of such Letter of Credit of
the type described in the penultimate sentence of Section
2.03(b); or
(iii) a Bank Default exists, unless such Issuing Bank
has entered into arrangements satisfactory to it and the
Company to eliminate such Issuing Bank's risk with respect
to the Bank which is the subject of the Bank Default includ-
ing by cash collateralizing such Bank's applicable RL
Percentage of the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of
Credit shall be issued the Stated Amount of which, when added to
the Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid on the date of, and prior to the issuance of,
the respective Letter of Credit) at such time, would exceed (x)
$15,000,000 or (y) when added to the aggregate principal amount
of all Revolving Loans and Swingline Loans then outstanding, an
amount equal to the Total Revolving Loan Commitment then in
effect, (ii) each Standby Letter of Credit shall by its terms
terminate on or before the earlier of (x) the date which occurs
12 months after the date of the issuance thereof (although any
such Standby Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond 5 Business Days prior
to the Final Maturity Date, on terms acceptable to the Agent and
the Issuing Bank with any such extension to be treated as a new
issuance of the Standby Letter of Credit being extended) and (y)
5 Business Days prior to the Final Maturity Date, (iii) each
Trade Letter of Credit shall by its terms terminate on or before
the earlier of (x) the date which occurs 24 months after the date
of the issuance thereof and (y) 5 Business Days prior to the
Final Maturity Date and (iv) each Letter of Credit will be issued
on a sight basis only.
2.02 MINIMUM STATED AMOUNT. The Stated Amount of each
Letter of Credit shall be not less than $100,000 or such lesser
amount as is acceptable to the Issuing Bank issuing such Letter
of Credit.
2.03 LETTER OF CREDIT REQUESTS. (a) Whenever the
Company desires that a Letter of Credit be issued for its
account, the Company shall give the Agent and the respective
Issuing Bank at least ten Business Days' (or such shorter period
as is acceptable to such Issuing Bank in any given case) written
notice prior to the proposed date of issuance (which shall be a
Business Day). Each notice shall be in the form of Exhibit C
(each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall
be deemed to be a representation and warranty by the Company that
such Letter of Credit may be issued in accordance with, and will
not violate the requirements of, Section 2.01(c). Unless the
respective Issuing Bank has received notice from any Bank before
it issues a Letter of Credit that one or more of the applicable
conditions specified in Section 5 or 6 are not then satisfied, or
that the issuance of such Letter of Credit would violate Section
2.01(c), then such Issuing Bank shall issue on the date of
issuance requested in the applicable Letter of Credit Request the
requested Letter of Credit for the account of the Company in
accordance with such Issuing Bank's usual and customary
practices. Upon its issuance of, or its entering into an
amendment with respect to, any Letter of Credit, the respective
Issuing Bank shall promptly notify each Bank of such issuance or
amendment, which notice shall be accompanied by a copy of the
Letter of Credit actually issued or amendment entered into, as
the case may be, by such Issuing Bank.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immedi-
ately upon the issuance by the respective Issuing Bank of any
Letter of Credit (and on the Restatement Effective Date in the
case of Existing Letters of Credit), such Issuing Bank shall be
deemed to have sold and transferred to each Bank, other than such
Issuing Bank (each such Bank, in its capacity under this Section
2.04, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received
from such Issuing Bank, without recourse or warranty, an un-
divided interest and participation, to the extent of such
Participant's RL Percentage in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the
obligations of the Company under this Agreement with respect
thereto, and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments of
the Banks pursuant to Section 1.12 or 13.04, it is hereby agreed
that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new
RL Percentages of the assignor and assignee Banks or of all Banks
with Revolving Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of
Credit, no Issuing Bank shall have any obligation relative to the
other Banks other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the
requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Bank under or in connection
with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct as determined by a court
of competent jurisdiction, shall not create for such Issuing Bank
any resulting liability to the Company or any Bank.
(c) In the event that any Issuing Bank makes any
payment under any Letter of Credit and the Company shall not have
reimbursed such amount in full to the respective Issuing Bank
pursuant to Section 2.05(a), the respective Issuing Bank shall
promptly notify the Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly
and unconditionally pay to the Agent for the account of such
Issuing Bank the amount of such Participant's applicable RL
Percentage of such unreimbursed payment in Dollars and in same
day funds. If the Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall
make available to the Agent at the Payment Office of the Agent
for the account of such Issuing Bank in Dollars such Parti-
cipant's applicable RL Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its applicable RL Per-
centage of the amount of such payment available to the Agent for
the account of such Issuing Bank, such Participant agrees to pay
to the Agent for the account of such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Agent
for the account of such Issuing Bank at the cost to such Issuing
Bank of acquiring overnight Federal funds. The failure of any
Participant to make available to the Agent for the account of
such Issuing Bank its applicable RL Percentage of any payment
under any Letter of Credit shall not relieve any other Partici-
pant of its obligation hereunder to make available to the Agent
for the account of such Issuing Bank its applicable RL Percentage
of any Letter of Credit on the date required, as specified above,
but no Participant shall be responsible for the failure of any
other Participant to make available to the Agent for the account
of such Issuing Bank such other Participant's applicable RL
Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which the Agent has received for
the account of such Issuing Bank any payments from the
Participants pursuant to clause (c) above, such Issuing Bank
shall pay to the Agent and the Agent shall promptly pay each
Participant which has paid its applicable RL Percentage thereof,
in Dollars and in same day funds, an amount equal to such
Participant's share (based on the proportionate aggregate amount
funded by such Participant to the aggregate amount funded by all
Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing
Bank shall furnish to such Participant copies of any Letter of
Credit issued by it and such other documentation as may
reasonably be requested by such Participant.
(f) The obligations of each respective Participant to
make payments to the Agent for the account of each Issuing Bank
with respect to Letters of Credit issued which such Participant
has a participation in shall be irrevocable and not subject to
any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under
all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Company may have at any time against a
beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such trans-
feree may be acting), the Agent, any Participant, or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying
transaction between the Company and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or any 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) the surrender or impairment of any security for
the performance or observance of any of the terms of this
Agreement or any of the other Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) the Company hereby agrees to reimburse the respective
Issuing Bank, by making payment to the Agent in immediately
available funds at the Payment Office (or by making the payment
directly to the respective Issuing Bank at such location as may
otherwise have been agreed upon by the Company and the respective
Issuing Bank), for any payment or disbursement made by such
Issuing Bank under any Letter of Credit (each such amount so paid
until reimbursed, an "Unpaid Drawing"), immediately after, and in
any event on the date of, such payment or disbursement, if the
respective Issuing Bank has given the Company notice of such
payment or disbursement prior to 2:00 P.M. (New York time) on the
date of such payment or disbursement (which notice such Issuing
Bank shall be under no obligation to give), and in any event on
the Business Day immediately succeeding such payment or disburse-
ment, with interest on the amount so paid or disbursed by the
respective Issuing Bank, to the extent not reimbursed prior to
12:00 Noon (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to
but excluding the date such Issuing Bank is reimbursed by the
Company therefor at a rate per annum which shall be (x) unless a
Bankruptcy Default exists on the date of the respective payment
or disbursement, for the period from and including the date of
the respective payment or disbursement until the earlier to occur
of a Bankruptcy Default or the date of receipt by the Company
from such Issuing Bank or the Agent of written or telephonic
notice of such payment or disbursement, the Base Rate in effect
from time to time plus the Applicable Margin for Base Rate Loans
at the time of such payment or disbursement, and (y) from and
including the date of the respective payment or disbursement if a
Bankruptcy Default then exists or, if a Bankruptcy Default does
not exist on the date of the respective payment or disbursement,
from and including the earlier to occur of the date upon which a
Bankruptcy Default subsequently occurs or the date of receipt by
the Company from such Issuing Bank or the Agent of written or
telephonic notice of such payment or disbursement to but ex-
cluding the date such Issuing Bank was reimbursed by the Company
therefor, the Base Rate in effect from time to time plus the
Applicable Margin for Base Rate Loans plus 2%, in each case with
such interest to be payable on demand. Each Issuing Bank shall
provide the Company and the Agent prompt notice of any payment or
disbursement made under the Letter of Credit issued by such
Issuing Bank, although the failure of, or the delay in, giving
any such notice shall not release or diminish the obligations of
the Company under this Section 2.05(a) or under any other Section
of this Agreement.
(b) The obligations of the Company under this Section
2.05 to reimburse each Issuing Bank with respect to Unpaid Draw-
ings (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment
which the Company may have or have had against any Bank
(including in its capacity as Issuing Bank or as Participant) or
any beneficiary or any transferee of the respective Letter of
Credit, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any
nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing or any draft, demand, certificate or any
other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any or all
respects or any statement therein being untrue or inaccurate in
any respect; PROVIDED, HOWEVER, that the Company shall not be
obligated to reimburse any Issuing Bank for any wrongful payment
made by such Issuing Bank under a Letter of Credit as a result of
acts or omissions constituting willful misconduct as determined
by a court of competent jurisdiction or gross negligence on the
part of such Issuing Bank.
2.06 INCREASED COSTS. If at any time after the
Original Effective Date any Issuing Bank or any Participant
determines that the introduction of or any change in any applic-
able law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any Participant
with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by any Issuing Bank
or participated in by any Participant, or (ii) impose on any
Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the
cost to any Issuing Bank or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce
the amount of any sum received or receivable by any Issuing Bank
or any Participant hereunder or reduce the rate of return on its
capital with respect to Letters of Credit, then, upon demand to
the Company by any Issuing Bank or any Participant (a copy of
which demand shall be sent by such Issuing Bank or such
Participant to the Agent), the Company shall pay to such Issuing
Bank or such Participant such additional amount or amounts as
will compensate such Bank for such increased cost or reduction in
the amount receivable or reduction on the rate of return on its
capital. In determining such additional amounts pursuant to the
preceding sentence, each Issuing Bank or Participant will act
reasonably and in good faith and will, to the extent the
increased costs or reductions in amounts receivable or reductions
in rates of return relate to such Issuing Bank's or Participant's
letters of credit in general and are not specifically
attributable to the Letters of Credit hereunder, use averaging
and attribution methods which are reasonable and which cover all
letters of credit similar to the Letters of Credit issued by or
participated in by such Issuing Bank or Participant whether or
not the documentation for such other Letters of Credit permit
such Issuing Bank or Participant to receive amounts of the type
described in this Section 2.06. Any Issuing Bank or any
Participant, upon determining that any additional amounts will be
payable pursuant to this Section 2.06, will give prompt written
notice thereof to the Company, which notice shall include a
certificate submitted to the Company by such Issuing Bank or such
Participant (a copy of which certificate shall be sent by such
Issuing Bank or such Participant to the Agent), setting forth in
reasonable detail the basis for the calculation of such addi-
tional amount or amounts necessary to compensate such Issuing
Bank or such Participant, although failure to give any such
notice (unless the respective Issuing Bank or Participant has
intentionally withheld or delayed such notice, in which case the
respective Issuing Bank or Participant shall not be entitled to
receive additional amounts pursuant to this Section 2.06 for
periods occurring prior to the 180th day before the giving of
such notice) shall not release or diminish the Company's obliga-
tions to pay additional amounts pursuant to this Section 2.06.
The certificate required to be delivered pursuant to this Section
2.06 shall, absent manifest error, be final, conclusive and bind-
ing on the Company.
Section 3. COMMITMENT FEES; FEES; REDUCTIONS OF
------------------------------------
COMMITMENT.
----------
3.01 FEES. (a) The Company agrees to pay to the
Agent for distribution to each Bank with a Revolving Loan Commit-
ment a commitment fee (the "Commitment Commission") for the
period from and including the Restatement Effective Date to and
including the Final Maturity Date (or such earlier date as the
Total Revolving Loan Commitment shall have been terminated)
computed at the rate for each day equal to the Applicable
Commitment Commission Percentage per annum on the daily
Unutilized Revolving Loan Commitment of such Bank. Accrued
Commitment Commission shall be due and payable in immediately
available funds quarterly in arrears on each Quarterly Payment
Date and on the Final Maturity Date or such earlier date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Company agrees to pay to the Agent for
distribution to each Bank a fee in respect of each Letter of
Credit issued hereunder (the "Letter of Credit Fee"), for the
period from and including the date of issuance of such Letter of
Credit (or, in the case of Existing Letters of Credit, from the
Restatement Effective Date) to and including the termination of
such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Eurodollar Loans of the daily Stated Amount
of such Letter of Credit. Letter of Credit Fees shall be
distributed by the Agent to the Banks with Revolving Loan
Commitments on the basis of their respective RL Percentages as in
effect from time to time. Accrued Letter of Credit Fees shall be
due and payable in immediately available funds quarterly in
arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment on which
no Letters of Credit remain outstanding.
(c) The Company agrees to pay to each Issuing Bank at
all times when there is more than one Bank with a Revolving Loan
Commitment, for its own account, a facing fee in respect of each
Letter of Credit issued by such Issuing Bank hereunder (the
"Facing Fee") for the period from and including the date of
issuance (or, (x) in the case of Existing Letters of Credit, the
Restatement Effective Date or (y) in the event that on the date
of issuance (or the Restatement Effective Date in the case of
Existing Letters of Credit) there is only one Bank with a
Revolving Loan Commitment on such later date on which there is
more than one Bank with a Revolving Loan Commitment) of such
Letter of Credit to and including the termination of such Letter
of Credit, equal to the greater of (x) $500.00 per annum and (y)
1/8 of 1% per annum (or such lessor rate as may be agreed to with
the Issuing Bank issuing such Letter of Credit) of the daily
Stated Amount of such Letter of Credit. Accrued Facing Fees
shall be due and payable in immediately available funds quarterly
in arrears on each Quarterly Payment Date and on the first day
after the termination of the Total Revolving Loan Commitment on
which no Letters of Credit remain outstanding.
(d) The Company hereby agrees to pay in immediately
available funds directly to each Issuing Bank upon each issuance
of, payment under, and/or amendment of, a Letter of Credit issued
by such Issuing Bank such amount as shall at the time of such
issuance, payment or amendment be the administrative charge which
such Issuing Bank is customarily charging for issuances of,
payments under or amendments of, letters of credit issued by it
or such alternative amounts as may have been agreed upon in
writing by the Company and such Issuing Bank.
(e) Notwithstanding anything to the contrary contained
in this Agreement or in the Existing Credit Agreement, all unpaid
Fees under, and as defined in, the Existing Credit Agreement
(including, without limitation, any Commitment Commission, Letter
of Credit Fees and Facing Fees (as each such term is defined in
the Existing Credit Agreement)) accrued to the Restatement
Effective Date (immediately prior to giving effect thereto) shall
be payable on the Restatement Effective Date.
(f) The Company shall pay (x) to the Agent, for its
own account, on the Restatement Effective Date, such fees of the
Agent as have heretofore been agreed to in writing by the Company
and the Agent and (y) to the Agent and each Bank, for their
respective accounts, such other fees as have been agreed to in
writing from time to time by the Company and the Agent when and
as due.
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS.
(a) Upon at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) to the Agent at
its Notice Office, which notice the Agent shall promptly transmit
to each of the Banks, the Company shall have the right, without
premium or penalty, to terminate, in whole or in part, the Total
Unutilized Revolving Loan Commitment, PROVIDED that any partial
reduction pursuant to this Section 3.02(a) shall be in integral
multiples of $1,000,000.
(b) In the event of certain refusals by a Bank as
provided in Section 13.12(b) to consent to certain proposed
changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks, the
Company may, subject to its compliance with the requirements of
said Section 13.12(b), upon five Business Days' written notice to
the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks) terminate the Revolving
Loan Commitment of such Bank so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, owing to
such Bank are repaid concurrently with the effectiveness of such
termination (at which time Schedule I shall be deemed modified to
reflect such changed amounts), and at such time such Bank shall
no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
13.01 and 13.06), which shall survive as to such repaid Bank.
(c) Any partial reduction to the Total Revolving Loan
Commitment pursuant to this Section 3.02 shall be applied (x)
FIRST, to the extent any portion of any Scheduled Commitment
Reduction for the twelve months immediately following the date of
such Scheduled Commitment Reduction have not been effected, to
reduce the then remaining Scheduled Commitment Reductions to
occur in such twelve month period in direct order of maturity and
(y) second, to the extent remaining after the applications pursu-
ant to the preceding clause (x), to reduce the then remaining
Scheduled Commitment Reductions on a PRO RATA basis (based upon
the then remaining principal amount of each such Scheduled
Commitment Reduction after giving effect to all prior reductions
thereto).
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The
Total Commitment (and the Commitment of each Bank) shall
terminate on November 15, 1997 and the Existing Credit Agreement
shall continue in effect without being amended and restated by
this Agreement, unless the Restatement Effective Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Revolving
Loan Commitment (and the Revolving Loan Commitment of each Bank)
shall terminate on the Final Maturity Date.
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date after the
Restatement Effective Date upon which a mandatory prepayment of
Revolving Loans pursuant to Section 4.02(B)(a) is required (and
exceeds in amount the aggregate principal amount of Revolving
Loans then outstanding) or would be required if Revolving Loans
were then outstanding, the Total Revolving Loan Commitment shall
be permanently reduced by the amount, if any, by which the amount
required to be applied pursuant to said Section (determined as if
an unlimited amount of Revolving Loans were actually outstanding)
exceeds the aggregate principal amount of Revolving Loans then
outstanding.
(d) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date set forth
below (each, a "Scheduled Commitment Reduction Date"), the
Revolving Loan Commitment shall be permanently reduced by the
amount set forth opposite such date (each such reduction, as such
reduction may have been reduced pursuant to Section 3.02 and/or
3.03(e), a "Scheduled Commitment Reduction"):
SCHEDULED COMMITMENT REDUCTION DATE AMOUNT
----------------------------------- ------
September 30, 1999 $10,000,000.00
September 30, 2000 $15,000,000.00
September 30, 2001 $25,000,000.00
Final Maturity Date $100,000,000.00
(e) Each partial reduction to the Total Revolving Loan
Commitment pursuant to Section 3.03(c) shall reduce the then
remaining Scheduled Commitment Reductions on a PRO RATA basis
(based upon the then remaining principal amount of each such
Scheduled Commitment Reduction after giving effect to all prior
reductions thereto). Each partial reduction to the Total
Revolving Loan Commitment pursuant to this Section 3.03 shall be
applied proportionately to reduce the Revolving Loan Commitment
of each Bank with such a Commitment.
Section 4. PREPAYMENTS; PAYMENTS; TAXES.
----------------------------
4.01 VOLUNTARY PREPAYMENTS. (a) The Company shall
have the right to prepay the Loans, without premium or penalty,
in whole or in part from time to time on the following terms and
conditions:
(i) the Company shall give the Agent prior to 12:00
Noon (New York time) at its Notice Office (x) at least one
Business Day's prior written notice (or telephonic notice
confirmed in writing) of its intent to prepay Base Rate
Loans, (y) on the date of such prepayment in the case of
Swingline Loans and (z) at least three Business Days' prior
written notice (or telephonic notice confirmed in writing)
of its intent to prepay Eurodollar Loans, the amount of such
prepayment and, in the case of Eurodollar Loans, the specif-
ic Borrowing or Borrowings pursuant to which made, which
notice the Agent shall, except in the case of Swingline
Loans, promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate
principal amount of at least $500,000 and, if greater, in
integral multiples of $100,000, PROVIDED that no partial
prepayment of Eurodollar Loans made pursuant to any Bor-
rowing shall reduce the outstanding Loans made pursuant to
such Borrowing to an amount less than $1,000,000;
(iii) prepayments of Eurodollar Loans made pursuant to
this Section 4.01(a) may only be made on the last day of an
Interest Period applicable thereto; and
(iv) each prepayment of Loans made pursuant to a
Borrowing shall be applied PRO RATA among such loans.
(b) In the event of certain refusals by a Bank as
provided in Section 13.12(b) to consent to certain proposed
changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks, the
Company may, upon five Business Days' written notice to the Agent
at its Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) repay all Loans, together with
accrued and unpaid interest, Fees, and other amounts owing to
such Bank in accordance with, and subject to the requirements of,
said Section 13.12(b) so long as the Revolving Loan Commitment of
such Bank is terminated concurrently with such repayment (at
which time Schedule I shall be deemed modified to reflect the
changed Revolving Loan Commitments).
4.02 MANDATORY REPAYMENTS.
--------------------
(A) REQUIREMENTS:
------------
(a) If on any date the sum of the aggregate out-
standing principal amount of the Revolving Loans, Swingline Loans
(after giving effect to all other repayments thereof on such
date) and the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Company shall
prepay on such date the principal of Swingline Loans, and if no
Swingline Loans are or remain outstanding, the principal of
Revolving Loans in an amount equal to such excess. If, after
giving effect to the prepayment of all outstanding Swingline
Loans and Revolving Loans, the Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment as then in effect,
the Company shall pay to the Agent at its Payment Office on such
date an amount of cash or Cash Equivalents equal to the amount of
such excess, such cash or Cash Equivalents to be held as security
for all Obligations of the Company hereunder in a cash collateral
account to be established by the Agent.
(b) On each date after the Restatement Effective Date
upon which the Company or any of its Subsidiaries receives any
proceeds from any incurrence by the Company or any of its
Subsidiaries of Indebtedness for borrowed money (other than
Indebtedness for borrowed money permitted by Section 9.05 as such
Section is in effect on the Restatement Effective Date), an
amount equal to 100% of the cash proceeds of the respective
incurrence (net of any underwriting discounts and commissions and
other reasonable costs associated therewith) shall be applied as
provided in Section 4.02(B).
(c) On each date after the Restatement Effective Date
upon which the Company or any of its Subsidiaries receives pro-
ceeds from any sale of assets (including capital stock of
Subsidiaries and securities but excluding (i) sales of inventory
and Cash Equivalents in the ordinary course of business, (ii)
sales of equipment which, in the reasonable judgment of the
Company have become obsolete, worn out or uneconomic, in the
ordinary course of business, the proceeds of which are used to
purchase other equipment used in the Company's business within
180 days from the date of sale so long as the aggregate amount of
Net Sale Proceeds excluded pursuant to this clause (ii) in any
fiscal year does not exceed $250,000 and (iii) sales of
receivables of the Company so long as the aggregate face value of
all such receivables to be excluded pursuant to this clause (iii)
in any fiscal year does not exceed $250,000), an amount equal to
100% of the Net Sale Proceeds therefrom, to the extent during any
fiscal year such proceeds exceed $2,000,000 but only to the
extent that the Net Sale Proceeds in excess of $2,000,000 is at
least $1,000,000 shall be applied as provided in Section 4.02(B).
(d) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline
Loans shall be repaid in full on the Swingline Expiry Date and
(ii) all other then outstanding Loans shall be repaid in full on
the Final Maturity Date.
(B) APPLICATION:
-----------
(a) Each mandatory repayment of Loans pursuant to
Sections 4.02(A)(b) or (c) shall be applied:
(i) first, to repay Swingline Loans to the extent then
outstanding;
(ii) second, to prepay the principal of outstanding
Revolving Loans (with a corresponding reduction to the Total
Revolving Loan Commitment) on a PRO RATA basis based on the
aggregate principal amount of all Revolving Loans
outstanding at such time;
(iii) third, to cash collateralize Letter of Credit
Outstandings in an amount equal to such Letter of Credit
Outstandings (with a corresponding reduction to the Total
Revolving Loan Commitment); and
(iv) fourth, to reduce the remaining (i.e., after
giving effect to all prior reductions thereto, including,
without limitation, the reductions theretofore effected
pursuant to the preceding clauses (i)-(iii)) Total Revolving
Loan Commitment on a PRO RATA basis based on the aggregate
principal amount of the then Total Revolving Loan Commitment
(it being understood and agreed that the amount of such
reductions shall be deemed to be an application of proceeds
for purposes of this Section 4.02(B)(a)(iv) even though cash
is not actually applied).
(b) All mandatory reductions to the Total Revolving
Loan Commitment arising as a result of the application of this
Section 4.02(B) shall be applied to reduce each of the then-
remaining Scheduled Commitment Reductions on a PRO RATA basis
(based upon the then remaining principal amount of each such
Scheduled Commitment Reduction after giving effect to all prior
reductions thereto).
(c) With respect to each repayment of Loans required
by this Section 4.02, the Company may designate the Types of
Loans which are to be repaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which
made, PROVIDED that: (i) repayments of Eurodollar Loans pursuant
to this Section 4.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans
with Interest Periods ending on such date of required repayment
and all Base Rate Loans have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $1,000,000, such Borrowing
shall immediately be converted into Base Rate Loans; and (iii)
each repayment of any Loans made pursuant to a Borrowing shall be
applied PRO RATA among such Loans. In the absence of a designa-
tion by the Company as described in the preceding sentence, the
Agent shall, subject to the above, make such designation in its
sole discretion.
(d) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, all outstanding Revolving Loans
shall be repaid in full on the Final Maturity Date.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments made by the Company
under this Agreement or any Note shall be made to the Agent for
the account of the Bank or Banks entitled thereto not later than
12:00 Noon (New York time) (or 1:00 P.M. (New York time) in the
case of Swingline Loans) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office
of the Agent. Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of princi-
pal, interest shall be payable at the applicable rate during such
extension.
4.04 NET PAYMENTS. (a) All payments made by the
Company under this Agreement or under any Note will be made
without setoff, counterclaim or other defense. Except as
provided in Section 4.04(b), all such payments will be made free
and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or
profits of a Bank pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of such
Bank is located or any political subdivision or taxing authority
thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes,
levies, imports, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Company agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under
any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, then the Company agrees to
reimburse each Bank, upon the written request of such Bank, for
taxes imposed on or measured by the net income or profits of such
Bank pursuant to the laws of the jurisdiction or any political
subdivision or taxing authority thereof or therein in which the
principal office or applicable lending office of such Bank is
located and for any withholding of income or similar taxes
imposed by the United States of America as such Bank shall deter-
mine are payable by such Bank in respect of such additional
amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on
behalf of such Bank pursuant to this sentence. The Company will
furnish to the Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Company. The Company
agrees to indemnify and hold harmless each Bank, and reimburse
such Bank upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees
to deliver to the Company and the Agent on or prior to the
Restatement Effective Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement
pursuant to Section 1.12 or 13.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, or (ii) if the Bank
is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001
or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Bank's entitlement to
a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement
and under any Note. In addition, each Bank agrees that from time
to time after the Restatement Effective Date, when a lapse in
time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it
will deliver to the Company and the Agent two new accurate and
complete original signed copies of Internal Revenue Service Form
4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and
any Note, or it shall immediately notify the Company and the
Agent of its inability to deliver any such Form or Certificate,
in which case such Bank shall not be required to deliver any such
form or certificate pursuant to this Section 4.04(b). Notwith-
standing anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the Company shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision
or taxing authority thereof or therein) from interest, fees or
other amounts payable hereunder for the account of any Bank which
is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Bank has not provided to the Company U.S.
Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Company
shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or
similar taxes imposed by the United States if (I) such Bank has
not provided to the Company the Internal Revenue Service Forms
required to be provided to the Company pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to
a Bank described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary contained
in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 13.04(b), the Company agrees to
pay additional amounts and to indemnify each Bank in the manner
set forth in Section 4.04(a) (without regard to the identity of
the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in
the immediately preceding sentence as a result of any changes
after the Restatement Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or with-
holding of income or similar Taxes.
Section 5. CONDITIONS PRECEDENT TO THE RESTATEMENT
EFFECTIVE DATE AND TO ALL CREDIT EVENTS ON THE RESTATEMENT
EFFECTIVE DATE. The occurrence of the Restatement Effective Date
pursuant to Section 13.10, the obligation of each Bank to make
Loans and the obligation of any Issuing Bank to issue Letters of
Credit, in each case, on the Restatement Effective Date is
subject, at the time of the making of such Loans or the issuance
of such Letters of Credit, to the satisfaction of the following
conditions:
5.01 EXECUTION OF AGREEMENT; NOTES. On or prior to
the Restatement Effective Date (i) this Agreement shall have been
executed and delivered in accordance with clause (i) of the first
sentence of Section 13.10, and (ii) there shall have been
delivered to the Agent for the account of each of the Banks with
a Revolving Loan Commitment the appropriate Revolving Note and to
the Swingline Bank, the Swingline Note, in each case executed by
the Company and in the amount, maturity and as otherwise provided
herein.
5.02 CONSUMMATION OF THE INITIAL PUBLIC OFFERING. On
the Restatement Effective Date, (i) the Company shall have gross
cash proceeds of at least $60 million, and shall have received
Net Cash Proceeds of at least $55,000,000, from the initial
public offering by the Company of Common Stock (the "Initial
Public Offering") and (ii) the Banks shall have received true and
correct copies of the registration statement, as amended (without
exhibits) and underwriting agreement relating to the Initial
Public Offering (the "Initial Public Offering Documents"). The
Company shall have utilized the proceeds from the Initial Public
Offering to make all payments then owing in connection with the
Transaction and the Agent and the Banks shall have received an
officers' certificate to such effect setting forth in reasonable
detail the uses of such proceeds. The Initial Public Offering
shall have occurred in accordance with the terms and conditions
of the Initial Public Offering Documents and all applicable law.
5.03 REPAYMENT OF EXISTING LOANS; PAYMENT OF FEES;
ETC. On or prior to the Restatement Effective Date or
concurrently with the initial Credit Event on the Restatement
Effective Date, the Company shall have (x) repaid in full (i) all
outstanding Existing Loans and (ii) all interest accrued to the
Restatement Effective Date on all Existing Loans and (y) paid (I)
all amounts contemplated by Sections 3.01(e) and (f) of this
Agreement to the extent then due and (II) all other costs, fees
and expenses owing to any of the Existing Banks and/or the
Existing Agent, respectively, under the Existing Credit
Agreement, to the extent then due in accordance with the terms of
the Existing Credit Agreement. Except as provided in Section
2.01(a), no Letters of Credit (as defined in the Existing Credit
Agreement) issued under the Existing Credit Agreement shall be
outstanding and all Unpaid Drawings (as defined in the Existing
Credit Agreement) relating to Letters of Credit (as defined in
the Existing Credit Agreement) shall have been paid in full,
together with all interest, fees and other amounts applicable
thereto. After giving effect to the payments pursuant to this
Section, no Existing Loans shall be outstanding on the
Restatement Effective Date after giving effect to the
transactions contemplated hereby.
5.04 OFFICER'S CERTIFICATE. On the Restatement Ef-
fective Date, the Agent shall have received a certificate dated
the Restatement Effective Date signed on behalf of the Company by
the President or any Vice President of the Company stating that
all of the conditions in Sections 5.02, 5.03, 5.08, 5.09, 5.13,
5.14, 6.01, 6.03 and 6.04 have been satisfied on such date,
provided the certificate shall not be required to certify as to
the acceptability of any items to the Agent and/or the Required
Banks or as to whether the Agent and/or the Required Banks are
satisfied with any of the matters described in said Sections.
5.05 OPINION OF COUNSEL. On the Restatement Effective
Date, the Agent shall have received from Sonnenschein Nath &
Rosenthal, special counsel to the Company, an opinion addressed
to the Agent and each of the Banks and dated the Restatement
Effective Date, which shall be in form and substance reasonably
satisfactory to the Agent and the Required Banks and which shall
cover the matters set forth in Exhibit E and such other matters
incident to the transactions contemplated herein as the Agent may
reasonably request.
5.06 CORPORATE DOCUMENTS; PROCEEDINGS. (a) On the
Restatement Effective Date, the Agent shall have received a
certificate, dated the Restatement Effective Date, signed by the
President or any Vice President of the Company, and attested to
by the Secretary or any Assistant Secretary of the Company, in
the form of Exhibit F with appropriate insertions, together with
copies of the Certificate of Incorporation and By-Laws of the
Company and the resolutions of the Company referred to in such
certificate, and the foregoing shall be acceptable to the Agent
and the Required Banks in their sole discretion.
(b) All corporate and legal proceedings and all
instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Documents shall be
satisfactory in form and substance to the Agent and the Required
Banks, and the Agent shall have received all information and
copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams, if any, which the Agent or
the Required Banks reasonably may have requested in connection
therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
5.07 EMPLOYEE BENEFIT PLANS; SHAREHOLDERS' AGREEMENTS;
COLLECTIVE BARGAINING AGREEMENTS; TAX SHARING AGREEMENTS; DEBT
AGREEMENTS; CPC CONTRACT. On or prior to the Restatement
Effective Date, there shall have been delivered to the Agent true
and correct copies, certified as true and complete by an appro-
priate officer of the Company, of (i) all employee benefit plans
or any other similar plans or arrangements for the benefit of
employees of the Company and any profit sharing plans and
deferred compensation plans of the Company (collectively, the
"Employee Benefit Plans") other than Stock Option Plans, (ii) all
agreements entered into by the Company governing the terms and
relative rights of its capital stock and any agreements entered
into by shareholders relating to the Company with respect to
their capital stock (collectively, the "Shareholders' Agree-
ments"), (iii) all collective bargaining agreements applying or
relating to any employee of the Company (collectively, the
"Collective Bargaining Agreements"), (iv) any tax sharing, dis-
affiliation, tax allocation and other similar agreements entered
into by the Company (collectively, the "Tax Sharing Agreements"),
(v) all agreements evidencing or relating to the Existing
Obligations of the Company (collectively, the "Debt Agreements")
and (vi) the CPC Contract; all of which Employee Benefit Plans
(other than Stock Option Plans), Shareholders' Agreements,
Collective Bargaining Agreements, Tax Sharing Agreements, Debt
Agreements and the CPC Contract, shall be in form and substance
satisfactory to the Agent and the Required Banks and shall be in
full force and effect on the Restatement Effective Date;
PROVIDED, HOWEVER, that only those Employee Benefit Plans (other
than Stock Option Plans), Shareholders' Agreements, Collective
Bargaining Agreements, Tax Sharing Agreements, Debt Agreements
and CPC Contract which were not in existence on April 11, 1997
or, if in existence on April 11, 1997, which have been changed in
any material respect since such date, shall be required to be
delivered pursuant to this Section 5.07.
5.08 ADVERSE CHANGE; APPROVALS; ETC. (a) Since
September 30, 1996, nothing shall have occurred (and the Banks
shall have become aware of no facts or conditions not previously
known) which the Agent or the Required Banks shall reasonably
determine (i) has, or could have, a material adverse effect on
the rights or remedies of the Banks or the Agent, or on the abil-
ity of the Company to perform its obligations to the Agent and
the Banks under this Agreement or any other Credit Document, (ii)
which has, or would reasonably be expected to have, a Material
Adverse Effect or (iii) indicates the inaccuracy in any material
respect of the information previously provided to the Agent or
the Banks (taken as a whole) or indicates that the information
previously provided omitted to disclose any material information.
(b) On or prior to the Restatement Effective Date, all
necessary governmental (domestic and foreign) and third party
approvals in connection with this Agreement and the Transaction
and the transactions contemplated by the Documents and otherwise
referred to herein or therein shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon
the consummation of all or any part of the Transaction or the
other transactions contemplated by the Documents and otherwise
referred to herein or therein. Additionally, there shall not
exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other re-
straint pending or notified prohibiting or imposing materially
adverse conditions upon all or any part of the Transaction, the
transactions contemplated by the Documents or otherwise referred
to herein or therein or the making of the Loans or the issuance
of Letters of Credit.
5.09 LITIGATION. On the Restatement Effective Date,
no litigation by any entity (private or governmental) shall be
pending or, to the best knowledge of the Company, threatened
with respect to this Agreement, any other Document or any docu-
mentation executed in connection herewith or the transactions
contemplated hereby (including, without limitation, the
Transaction), or with respect to any of the Existing Obligations
or the obligations being refinanced in connection with the
consummation of the Transaction or which the Agent or the
Required Banks shall determine could reasonably be expected to
have a materially adverse effect on the Transaction or the busi-
ness, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company.
5.10 FEES; ETC. On the Restatement Effective Date,
the Company shall have paid to the Agent and the Banks all
reasonable costs, fees and expenses (including, without
limitation, all legal fees and expenses) payable to the Agent and
the Banks, respectively, to the extent then due.
5.11 CONSENT LETTER. On the Restatement Effective
Date, the Agent shall have received a letter from CT Corporation
System, presently located at 1633 Broadway, New York, New York
10019, substantially in the form of Exhibit G hereto, indicating
its consent to its appointment by the Company as its agent to
receive service of process as specified in Section 13.08 of this
Agreement.
5.12 FINANCIAL STATEMENTS. On or prior to the
Restatement Effective Date, the Agent and each of the Banks shall
have received the Financial Statements referred to in Section
7.05.
5.13 EXISTING INDEBTEDNESS. On the Restatement Ef-
fective Date and after giving effect to the Transaction and the
other transactions contemplated hereby that are to be consummated
on the Restatement Effective Date and the related financing
therefor, the Company shall not have any Indebtedness outstanding
except for (i) the Loans, (ii) the Letters of Credit and (iii)
the Existing Obligations. The Existing Obligations shall not
have been incurred in connection with, or in contemplation of,
the Transaction and the other transactions contemplated hereby,
and the terms and conditions of the Existing Obligations shall be
satisfactory to the Agent and the Required Banks. All of the
Existing Obligations shall remain outstanding after the
consummation of the Transaction and the other transactions
contemplated hereby that are to be consummated on the Restatement
Effective Date and the related financing therefor, without any
default or events of default existing thereunder or arising as a
result of the consummation of such transactions contemplated
hereby. Except as may have been requested or approved by the
Agent and the Required Banks, there shall not be any amendments
or modifications to the agreements and instruments governing or
evidencing the Existing Obligations. All security interests of
the Existing Banks under the Existing Credit Agreement shall have
been released.
5.14 SUBSIDIARIES. On the Restatement Effective Date,
the Company shall have no Subsidiaries.
Section 6. CONDITIONS PRECEDENT TO THE RESTATEMENT
EFFECTIVE DATE AND TO ALL CREDIT EVENTS. The occurrence of the
Restatement Effective Date pursuant to Section 13.10, the
obligation of each Bank to make Loans (including Loans made on
the Restatement Effective Date) and the obligation of any Issuing
Bank to issue any Letter of Credit, is subject, at the time of
each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. On
the Restatement Effective Date and at the time of each Credit
Event and also after giving effect thereto (i) there shall exist
no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents
shall be true and correct in all material respects with the same
effect as though such representations and warranties had been
made on the Restatement Effective Date and/or the date of making
of such Loans or the issuance of such Letter of Credit, provided
that any representation or warranty which by its terms is made as
of a specified date shall be required to be true and correct at
the time of each such Credit Event only as of such specified
date.
6.02 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST.
(a) Prior to the making of each Loan, the Agent shall have re-
ceived a Notice of Borrowing meeting the requirements of Section
1.03.
(b) Prior to the issuance of each Letter of Credit
(other than an Existing Letter of Credit), the Agent and the
respective Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.03.
6.03 ADVERSE CHANGE; ETC. At the time of each such
Credit Event and also after giving effect thereto, nothing shall
have occurred (and the Banks shall have become aware of no facts
or conditions not previously known) which the Agent or the
Required Banks shall reasonably determine (i) has, or could have,
a material adverse effect on the rights or remedies of the Banks
or the Agent, or on the ability of the Company to perform its
obligations to the Agent and the Banks under this Agreement or
any other Credit Document, (ii) has, or could reasonably be
expected to have, a Material Adverse Effect or (iii) indicates
the inaccuracy, at the time provided, in any material respect of
the information previously provided to the Agent or the Banks
(taken as a whole) or indicates, that the information previously
provided, at the time provided, omitted to disclose any material
information.
6.04 LITIGATION. At the time of each such Credit
Event and also after giving effect thereto, no litigation by any
entity (private or governmental) shall be pending or, to the best
knowledge of the Company, threatened with respect to this Agree-
ment, any other Document or any documentation executed in
connection herewith or the transactions contemplated hereby, or
with respect to any Existing Obligations or which the Agent or
the Required Banks shall determine could reasonably be expected
to have a Material Adverse Effect.
The occurrence of the Restatement Effective Date and
the acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Company to each
of the Banks that all the applicable conditions specified in
Sections 5 and 6 exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers
referred to in Sections 5 and 6, unless otherwise specified,
shall be satisfactory in form and substance to the Agent and the
Required Banks and shall be delivered to the Agent at its Notice
Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks.
Section 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Banks to enter into this Agreement and to
make the Loans, and issue (or participate in) the Letters of
Credit as provided herein, the Company makes the following
representations, warranties and agreements as of the Restatement
Effective Date and as of the date of each subsequent Credit
Event, all of which shall survive the execution and delivery of
this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of each
Credit Event on or after the Restatement Effective Date being
deemed to constitute a representation and warranty that the
matters specified in this Section 7 are true and correct on and
as of the Restatement Effective Date and on and as of the date of
each such Credit Event, provided that any representation or
warranty which by its terms is made as of a specified date shall
be required to be true and correct on the date of each Credit
Event but only as of such specified date:
7.01 CORPORATE STATUS. Each of the Company and each
of its Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction
of its incorporation, (ii) has the corporate power and authority
to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage in and (iii)
is duly qualified and is authorized to do business and is in good
standing in (x) Delaware, Missouri and South Carolina and (y) in
each other jurisdiction where the ownership, leasing or operation
of property or the conduct of its business requires such qual-
ifications, except in the case of clause (y) for such failures to
be so qualified which, in the aggregate, would not have a
Material Adverse Effect.
7.02 CORPORATE POWER AND AUTHORITY. The Company has
the corporate power and authority to execute, deliver and perform
the terms and provisions of each of the Documents to which it is
party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such
Documents. The Company has duly executed and delivered each of
the Documents to which it is party, and each of such Documents
constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at
law).
7.03 NO VIOLATION. Neither the execution, delivery or
performance by the Company or any of its Subsidiaries of the
Documents to which it is a party, nor compliance by it with the
terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any
provision of any law, statute, rule or regulation binding on or
applicable to the Company or any of its Subsidiaries or any
order, writ, injunction or decree of any court or governmental
instrumentality binding on or applicable to the Company or any of
its Subsidiaries, (ii) will conflict with or result in any breach
of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien
upon any of the property or assets of the Company or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or loan agreement, or any other
agreement, contract or instrument, to which the Company or any of
its Subsidiaries is a party or by which it or any of its property
or assets is bound or to which it may be subject or (iii) will
violate any provision of the Certificate of Incorporation or By-
Laws of the Company or any of its Subsidiaries.
7.04 GOVERNMENTAL APPROVALS. No order, consent,
approval, license, authorization or validation of, or filing,
recording or registration with (except as have been obtained or
made on or prior to the Restatement Effective Date), or exemption
by, any governmental or public body or authority, or any sub-
division thereof, is required to authorize, or is required in
connection with, (i) the execution, delivery and performance of
any Document or (ii) the legality, validity, binding effect or
enforceability of any such Document.
7.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION;
UNDISCLOSED LIABILITIES; ETC. (a) (i) The audited balance sheet
of the Company at September 30, 1996 and the related statements
of operations, cash flows and shareholders' equity of the Company
for the fiscal year ended on such date and the unaudited balance
sheet of the Company at August ___, 1997 and the related
statements of operations, cash flows and shareholders' equity of
the Company for the eight month period ended on such date, copies
of which have hereto been furnished to the Banks prior to the
Restatement Effective Date which have been audited by Ernst &
Young, independent certified public accountants, who delivered an
unqualified opinion in respect thereto in the case of the annual
statement, and (ii) the PRO FORMA (after giving effect to the
Transaction, the related financing thereof and the other
transactions contemplated hereby and thereby) balance sheet of
the Company at August __, 1997, copies of which have heretofore
been furnished to the Banks prior to the Restatement Effective
Date, present fairly the financial condition of the Company at
the date of such balance sheets and the results of the operations
and the cash flows and shareholders' equity of the Company for
such fiscal year or other period, as the case may be (or, in the
case of the PRO FORMA balance sheet, presents a good faith
estimate of the PRO FORMA financial condition of the Company
(after giving effect to the Transaction, the related financing
thereof and the other transactions contemplated hereby and
thereby) at the date thereof). All such financial statements
have been prepared in accordance with generally accepted account-
ing principles and practices consistently applied (except as may
be indicated in the notes thereto) subject to normal year-end
adjustments in the case of the unaudited statements. Since
September 30, 1996, there has been no material adverse change in
the business, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of the Company or
of the Company and its Subsidiaries taken as a whole.
(b) On and as of the Restatement Effective Date, after
giving effect to the Transaction and to all Indebtedness (includ-
ing the Loans and the Letters of Credit) being incurred, and to
be incurred (and the use of proceeds thereof), and Liens created,
and to be created, by the Company in connection with the
transactions contemplated hereby, (i) the sum of the assets, at a
fair valuation, of the Company will exceed its debts; (ii) the
Company has not incurred nor intends to, nor believes that it
will, incur debts beyond its ability to pay such debts as such
debts mature; and (iii) the Company will have sufficient capital
with which to conduct its business. For purposes of this Section
7.05(b) "debt" means any liability on a claim, and "claim" means
(x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or
not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.
(c) Except as fully reflected in the financial state-
ments and the notes related thereto delivered pursuant to Section
7.05(a) and on Schedule IV, there were as of the Restatement
Effective Date (and after giving effect to the Transaction and
the other transactions contemplated hereby) no liabilities or
obligations with respect to the Company of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether
or not due) which, either individually or in the aggregate, would
be material to the Company. As of the Restatement Effective Date
(and after giving effect to the Transaction and the other
transactions contemplated hereby), the Company does not know of
any basis for the assertion against the Company of any liability
or obligation of any nature whatsoever that is not fully re-
flected in the financial statements delivered pursuant to Section
7.05(a) and on Schedule IV which, either individually or in the
aggregate, could be material to the Company.
7.06 LITIGATION. There are no actions, suits or
proceedings pending or, to the best knowledge of the Company,
threatened (i) with respect to any Document, (ii) with respect to
any Indebtedness or preferred stock of the Company or any of its
Subsidiaries or (iii) that are reasonably likely to have a Mate-
rial Adverse Effect.
7.07 TRUE AND COMPLETE DISCLOSURE. All factual in-
formation (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Company or any of its
Subsidiaries in writing to any Bank (including, without limita-
tion, all information contained in the Documents) for purposes of
or in connection with this Agreement or any transaction contem-
plated herein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of the Company or
any of its Subsidiaries in writing to any Bank for purposes of or
in connection with this Agreement or any transaction contemplated
herein will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material
respect at such time in light of the circumstances under which
such information was provided.
7.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All
proceeds of Revolving Loans and Swingline Loans shall be used by
the Company for working capital and general corporate purposes of
the Company.
(b) No part of the proceeds of any Loan will be used
to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the
making of any Loan nor the use of the proceeds thereof nor the
occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System.
7.09 TAX RETURNS AND PAYMENTS. Each of the Company
and each of its Subsidiaries has timely filed or caused to be
timely filed with the appropriate taxing authority, all returns,
statements, forms and reports for taxes (the "Returns") required
to be filed by or with respect to the income, properties or
operations of the Company and/or any of its Subsidiaries. The
Returns accurately reflect all liability for taxes of the Company
and its Subsidiaries for the periods covered thereby. Each of
the Company and each of its Subsidiaries has paid all taxes
payable by it before they have become delinquent other than those
contested in good faith and for which adequate reserves have been
established. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge
of the Company, threatened by any authority regarding any taxes
relating to the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has entered into an agreement
or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or
collection of taxes of the Company or any of its Subsidiaries, or
is aware of any circumstances that would cause the taxable years
or other taxable periods of the Company or any of its Sub-
sidiaries not to be subject to the normally applicable statute of
limitations. Neither the Company nor any of its Subsidiaries
have provided, with respect to themselves or property held by
them, any consent under Section 341 of the Code. Neither the
Company nor any of its Subsidiaries has incurred, or will incur,
any tax liability in connection with the Transaction or the other
transactions contemplated hereby.
7.10 COMPLIANCE WITH ERISA. Each Plan is in substan-
tial compliance with ERISA and the Code; no Reportable Event has
occurred with respect to a Plan; no Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability; no
Plan has an accumulated or waived funding deficiency, has
permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the
meaning of Section 412 of the Code; neither the Company nor any
of its Subsidiaries nor any ERISA Affiliate has incurred any
material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 4971, 4975 or 4980 of the Code or
expects to incur any liability under any of the foregoing
Sections with respect to any Plan; no proceedings have been
instituted to terminate or appoint a trustee to administer any
Plan; no condition exists which presents a material risk to the
Company or any of its Subsidiaries or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the Company and its Subsidiaries
and its ERISA Affiliates would not have any liability to all
Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of any Credit Event; no Lien
imposed under the Code or ERISA on the assets of the Company or
any of its Subsidiaries or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and the Company and its
Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by
Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) the obligations with respect to
which could reasonably be expected to have a material adverse
effect on the ability of the Company to perform its obligations
under this Agreement. For purposes of this Section 7.10, the
term "ERISA Affiliate" shall not include any Person that would
otherwise be included within such term solely by reason of MS
Shareholders's ownership interest in such Person and the term
Plan shall not include any Plan which was ever maintained by any
such ERISA Affiliate.
7.11 SUBSIDIARIES. The Company has no Subsidiaries
other than Subsidiaries created in accordance with Section 9.14.
7.12 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS AND
IN EXISTING CREDIT AGREEMENT. All representations and warranties
set forth in the other Documents were true and correct in all
material respects at the time as of which such representations
and warranties were made or deemed made and shall be true and
correct in all material respects as of the Restatement Effective
Date as if such representations and warranties were made on and
as of such date. In addition, all representations and warranties
set forth in the Existing Credit Agreement were true and correct
in all material respects as of the time such representations and
warranties were made or deemed made thereunder.
7.13 PROPERTIES. Except as set forth in Schedule V,
the Company and each of its Subsidiaries have good and marketable
title to all properties owned by them including, without
limitation, all property reflected in the most recent balance
sheet of the Company as referred to in Section 7.05(a)(i) and in
the PRO FORMA balance sheet referred to in Section 7.05(a)(ii)
and in Section 5.12 (except as sold or otherwise disposed of
since the date of such balance sheet in the ordinary course of
business or, in the case of any sale or disposition after the
Restatement Effective Date, as otherwise permitted under this
Agreement), free and clear of all Liens, other than (i) as
referred to in such balance sheet or in the notes thereto or in
the PRO FORMA balance sheet or (ii) otherwise permitted by
Section 9.01.
7.14 CAPITALIZATION. On the Restatement Effective
Date and after giving effect to the issuance of common stock on
such date pursuant to the Initial Public Offering, the authorized
capital stock of the Company shall consist of (i) 75,000,000
shares of Class A Common Stock, of which 16,776,061 shares shall
be issued and outstanding, (ii) 25,000,000 shares of Class B
Common Stock, of which no shares shall be issued and outstanding,
and (iii) 10,000,000 shares of preferred stock, par value $.001
per share, of which no shares shall be issued and outstanding.
Upon issuance thereof, all such outstanding shares have been or
shall be duly and validly issued, are or shall be fully paid and
nonassessable and, except as set forth in the Company's Certifi-
cate of Incorporation, are or shall be free of preemptive rights.
On the Restatement Effective Date, except (i) for the
convertability of certain shares of Class A Common Stock into
Class B Common Stock (and vice versa) in accordance with the
terms thereof and (ii) as provided in or contemplated by the
Stockholders Agreement, the Company does not have outstanding any
securities convertible into or exchangeable for its capital stock
or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to, its capital stock other
than options to purchase shares of Common Stock granted to man-
agement and employees of the Company pursuant to the Employment
Agreements or the Stock Option Plans, the aggregate number of
such shares subject to such options not to exceed 4,000,000.
7.15 COMPLIANCE WITH STATUTES; ETC. Each of the
Company and its Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as would not,
in the aggregate, have a Material Adverse Effect.
7.16 INVESTMENT COMPANY ACT. Neither the Company nor
any of its Subsidiaries is an "investment company," or a company
"controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940, as amended.
7.17 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the
Company nor any of its Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.18 ENVIRONMENTAL MATTERS. (a) The Company and each
of its Subsidiaries have complied in all material respects with,
and on the Restatement Effective Date and on the date of each
Credit Event are in compliance in all material respects with, all
applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no material
past, pending and to the best knowledge of the Company,
threatened Environmental Claims against the Company or any of its
Subsidiaries or any Real Property owned or at any time operated
by the Company or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences on any Real Property
owned or at any time operated by the Company or any of its Sub-
sidiaries or, to the best knowledge of the Company, on any
property adjoining any Real Property owned or operated by the
Company and its Subsidiaries that could reasonably be expected
(i) to form the basis of an Environmental Claim against the
Company or any of its Subsidiaries or any such Real Property, or
(ii) to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability
of such Real Property under any Environmental Law.
(b) Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported to or from,
any Real Property owned or at any time operated by the Company or
any of its Subsidiaries except in material compliance with
Environmental Laws. Hazardous Materials have not at any time
been Released on or from any Real Property owned or at any time
operated by the Company or any of its Subsidiaries except in
material compliance with Environmental Laws. Except as disclosed
on Schedule VI, there are not now and never have been any
underground storage tanks located on any Real Property owned or
at any time operated by the Company or any of its Subsidiaries.
7.19 LABOR RELATIONS. Neither the Company nor any of
its Subsidiaries is engaged in any unfair labor practice that
could have a material adverse effect on the Company or on the
Company and its Subsidiaries taken as a whole. There is (i) no
significant unfair labor practice complaint pending against the
Company or any of its Subsidiaries or, to the best knowledge of
the Company, threatened against any of them before the National
Labor Relations Board, and no significant grievance or
significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company
or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against
the Company or any of its Subsidiaries or, to the best knowledge
of the Company, threatened against the Company or any of its
Subsidiaries and (iii) to the best knowledge of the Company, no
question concerning union representation exists with respect to
the employees of the Company or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or
(iii) above, either individually or in the aggregate) such as
could not have a Material Adverse Effect.
7.20 INTELLECTUAL PROPERTY; LICENSES; FRANCHISES;
FORMULAS. Each of the Company and its Subsidiaries owns all the
patents, patent applications, trademarks, service marks,
trademark and service mark registrations and applications
therefor, trade names, copyrights, copyright registrations and
applications therefor, trade secrets, proprietary information,
computer programs, data bases, licenses, permits, franchises and
formulas, or rights with respect to the foregoing (collectively,
"Intellectual Property"), and has obtained assignments of all
leases and other rights of whatever nature, necessary for the
present conduct of its business, without any known conflict with
the rights of others. Except as set forth on Schedule VII,
neither the Company nor any of its Subsidiaries has knowledge of
any existing or threatened claim by any Person contesting the
validity, enforceability, use or ownership of the Intellectual
Property, or of any existing state of facts that would support a
claim that use by the Company or any of its Subsidiaries of any
such Intellectual Property has infringed or otherwise violated
any proprietary rights of any other Person.
7.21 INDEBTEDNESS. Schedule VIII sets forth a true
and complete list of all Indebtedness (other than the Loans and
the Letters of Credit) of the Company as of the Restatement
Effective Date and which is to remain outstanding after giving
effect to the Transaction (the "Existing Obligations"), in each
case showing the aggregate principal amount thereof (and the
aggregate amount of any undrawn commitments with respect thereto)
and the name of the respective obligor and any other entity which
directly or indirectly guaranteed such debt. No Existing
Obligation has been incurred in connection with, or in
contemplation of, the Transaction or the other transactions
contemplated hereby.
7.22 RESTRICTIONS ON OR RELATING TO SUBSIDIARIES.
There does not exist any encumbrance or restriction on the
ability of (a) any Subsidiary of the Company to pay dividends or
make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or
any Subsidiary of the Company, or to pay any Indebtedness owed to
the Company or a Subsidiary of the Company, (b) any Subsidiary of
the Company to make loans or advances to the Company or any of
the Company's Subsidiaries or (c) the Company or any of its
Subsidiaries to transfer any of its properties or assets to the
Company or any of its Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (i) applicable
law, (ii) this Agreement or the other Credit Documents or (iii)
customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of the Company or a Sub-
sidiary of the Company.
7.23 ENTERPRISE ZONE. Pursuant to and in accordance
with City of Excelsior Springs Ordinance No. 87-1-4, the Company
has been granted enterprise zone tax abatements and exemptions by
the City of Excelsior Springs, Missouri and Clay County, Missouri
with respect to substantially all of the Real Property of the
Company, together with the Missouri Facility and other
improvements thereon (including certain equipment which has been
classified as real property qualified for said abatements and
exemptions), as follows:
Such Real Property shall be one hundred percent (100%)
exempt from all taxes for a fifteen (15) year period,
commencing January 1, 1988. For the next ten (10) years
there shall be a fifty percent (50%) abatement of all taxes
as to schools, county and any other funds except the general
fund, for which there shall be a one hundred percent (100%)
abatement of taxes. The one hundred percent (100%)
abatement for the general fund of the City of Excelsior
Springs shall be for a period of ten (10) years or until
such time as One Hundred Eleven Thousand ($111,000.00)
Dollars has been abated, whichever time shall occur first.
The tax abatements and exemptions claimed as described above are
and shall be available to the Company as claimed with respect to
any taxable period (or portion thereof) ending on or before the
close of business on the Restatement Effective Date (whether for
the Company's real property, improvements thereon or equipment
classified as real property are therefore qualified for said
exemptions and abatements). For taxable periods (or portions
thereof) ending after the Restatement Effective Date, such tax
abatements and exemptions shall be available to the Company with
respect to substantially all of the Company's real property,
together with improvements thereon; PROVIDED, HOWEVER, that for
taxable periods (or portions thereof) ending after the Restate-
ment Effective Date, the Company makes no representation or war-
ranty that such tax abatements and exemptions shall be available
to the Company with respect to equipment (including equipment
which has previously been classified as real property entitled to
the benefit of such abatements and exemptions).
7.24 PURCHASE OR OTHER COMMITMENTS AND OUTSTANDING
BIDS. No material purchase or other commitment of the Company is
in excess of the normal, ordinary, and usual requirements of its
business, or was made at any price in excess of the then current
market price, or contains terms and conditions more onerous than
those usual and customary in the applicable industry. There is
no outstanding bid, sales or promotional proposal, contract, or
unfilled order of the Company which (i) will, or could if
accepted, require the Company to supply goods or services at a
cost to the Company in excess of the revenues to be received
therefor, or (ii) quotes prices which do not include a markup
over reasonably estimated costs consistent with past markups on
similar business or market conditions current at that time.
Section 8. AFFIRMATIVE COVENANTS. The Company
covenants and agrees that on and after the Restatement Effective
Date and until the Total Commitments and all Letters of Credit
have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other obligations incurred
hereunder and thereunder, are paid in full:
8.01 INFORMATION COVENANTS. The Company will furnish,
or cause to be furnished, to each Bank:
(a) QUARTERLY FINANCIAL STATEMENTS. Within forty-five
days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Company, the
consolidated balance sheets of the Company and its Subsidiaries
as at the end of such quarterly period, and the related consol-
idated statements of operations, shareholders' equity and cash
flows for such quarterly period and the elapsed portion of the
fiscal year ended with the last day of such quarterly period, in
each case setting forth comparative figures for the related per-
iods in the prior fiscal year and the budgeted figures for such
period as set forth in the respective budget delivered pursuant
to Section 8.01(d), all of which shall be certified by the Chief
Financial Officer of the Company, subject to normal year-end
audit adjustments.
(b) ANNUAL FINANCIAL STATEMENTS. Within ninety days
after the close of each fiscal year of the Company, the
consolidated balance sheets of the Company and its Subsidiaries
as at the end of such fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for
such fiscal year, reported on by Ernst & Young or other indepen-
dent certified public accountants of recognized national standing
reasonably acceptable to the Agent and the Required Banks and in
each case setting forth comparative figures for the preceding
fiscal year, together with an unqualified opinion of such
accounting firm and a letter stating that in the course of its
regular audit of the financial statements of the Company and its
Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm ob-
tained no knowledge of any Default or Event of Default arising
under Sections 9.02, 9.03, 9.04, 9.05, 9.06 or 9.08 through 9.11,
inclusive, insofar as such Sections relate to accounting matters
or require computations to be made which are ordinarily made by
accountants which has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or Event of
Default has occurred and is continuing, a statement as to the
nature and period of existence thereof. The Company shall
provide a comparison between the consolidated balance sheets of
the Company and its Subsidiaries and the related consolidated
statements of operations, shareholders' equity and cash flows
referred to above and the budgeted figures for the relevant
period as set forth in the respective budget delivered pursuant
to Section 8.01(d).
(c) MANAGEMENT LETTERS. Promptly after receipt
thereof, a copy of any "management letter" received by the
Company or any of its Subsidiaries from its certified public
accountants.
(d) BUDGETS. As soon as available and in any event
within ninety days following the first day of each fiscal year of
the Company, a budget in form satisfactory to the Agent and the
Required Banks (including budgeted statements of operations, cash
flows and shareholders' equity and balance sheets) prepared by
the Company for each fiscal quarter of such fiscal year, in each
case prepared in reasonable detail, with appropriate presentation
and discussion of the principal assumptions upon which such
budgets are based, which shall be accompanied by the statement of
the Chief Financial Officer of the Company to the effect that, to
the best of his knowledge, such budget is a reasonable estimate
for the period covered thereby.
(e) OFFICER'S CERTIFICATES. At the time of the
delivery of the financial statements provided for in Section
8.01(a) and (b), a certificate of the Chief Financial Officer of
the Company to the effect that no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default
has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall also set forth if delivered with
the financial statements required by Section 8.01(a) or (b), the
calculations required to establish whether the Company was in
compliance with the provisions of Sections 3.03, 4.02, 9.02,
9.03, 9.04, 9.05, 9.06 and 9.08 through 9.11, inclusive.
(f) NOTICE OF DEFAULT OR LITIGATION, ETC. Notice of
Default or Litigation, etc. Promptly, and in any event within
three Business Days after an officer of the Company or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or Event of
Default, (ii) any litigation or governmental investigation or
proceeding pending (x) against the Company or any of the
Subsidiaries which could materially and adversely affect the
business, property, assets, nature of assets, liabilities, condi-
tion (financial or otherwise) or prospects of the Company or of
the Company and its Subsidiaries taken as a whole, (y) with
respect to any material Indebtedness or preferred stock of the
Company or any of its Subsidiaries or (z) with respect to any
Document, (iii) any adverse judgment rendered against the Company
or any of its Subsidiaries, which imposes punitive damages or
otherwise providing for a recovery which is, to the extent not
covered by insurance, in excess of $100,000, and (iv) any other
event which could have a Material Adverse Effect.
(g) OTHER REPORTS AND FILINGS. Promptly, copies of
all financial information, proxy materials and other information
and reports, if any, which the Company or any of its Subsidiaries
shall file with the Securities and Exchange Commission or any
successor thereto (the "SEC") or deliver to holders of its
Indebtedness pursuant to the terms of the documentation governing
such Indebtedness or (or any trustee, agent or other representa-
tive therefor).
(h) ENVIRONMENTAL MATTERS. Promptly upon, and in any
event within three Business Days after an officer of the Company
or any of its Subsidiaries obtains knowledge thereof, notice of
one or more of the following environmental matters: (i) any
pending or threatened material Environmental Claim against the
Company or any of its Subsidiaries or any Real Property owned or
at any time operated by the Company or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or at any time operated by the Company or any of
its Subsidiaries that (a) results in material noncompliance by
the Company or any of its Subsidiaries with any applicable
Environmental Law, or (b) could reasonably be expected to form
the basis of a material Environmental Claim against the Company
or any of its Subsidiaries or any such Real Property; (iii) any
condition or occurrence on any Real Property owned or at any time
operated by the Company or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject
to any material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental
Law; and (iv) the taking of any material removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned or at any time
operated by the Company or any of its Subsidiaries as required by
any Environmental Law or any governmental or other administrative
agency. All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or
removal or remedial action and the Company's or such Subsidiary's
response thereto. In addition, the Company will provide the
Banks with copies of all written communications with any govern-
ment or governmental agency relating to Environmental Laws, all
communications with any Person relating to Environmental Claims,
and such detailed reports of any Environmental Claim as may
reasonably be requested by the Banks.
(i) ANNUAL MEETINGS WITH BANKS. Within 120 days after
the close of each fiscal year of the Company, the Company shall
hold a meeting with respect to which all of the Banks shall have
received notice at least fourteen (14) days in advance, and to
which all the Banks shall be invited to attend, at which meeting
shall be reviewed the financial results of the previous fiscal
year and the financial condition of the Company and its
Subsidiaries and the budgets presented for the current fiscal
year of the Company and its Subsidiaries.
(j) SYSCO CONTRACT NOTICES. Promptly, and in any
event within two Business Days after the Company (i) receives a
notice from Sysco pursuant to Section 5.2 of the Sysco Contract
or any other material notices delivered to the Company pursuant
to the Sysco Contract or (ii) delivers or receives any material
notice pursuant to the CPC Contract, copies of all such notices.
(k) OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) as the Agent or
the Required Banks may reasonably request.
8.02 BOOKS, RECORDS AND INSPECTIONS. The Company will,
and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries in
conformity with United States generally accepted accounting prin-
ciples and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. The
Company will, and will cause each of its Subsidiaries to, permit
officers and designated representatives of the Agent or any Bank
to visit and inspect, under guidance of officers of the Company
or such Subsidiary, any of the properties of the Company or such
Subsidiary, and to examine the books of account of the Company or
such Subsidiary and discuss the affairs, finances and accounts of
the Company or such Subsidiary with, and be advised as to the
same by, its and their officers, all at such reasonable times and
intervals, upon reasonable notice and to such reasonable extent
as the Agent or such Bank may request.
8.03 MAINTENANCE OF PROPERTY, INSURANCE. Schedule IX
sets forth a true and complete listing of all insurance main-
tained by the Company as of the Restatement Effective Date. The
Company will, and will cause each of its Subsidiaries to, (i)
keep all property useful and necessary in its business in good
working order and condition, (ii) maintain with financially sound
and reputable insurance companies insurance, including, but not
limited to, business interruption insurance, on all its assets
and properties in at least such amounts and against at least such
risks as is consistent and in accordance with industry practice
for companies similarly situated, and (iii) furnish to each Bank,
on the Restatement Effective Date and on each anniversary
thereof, full information as to the insurance carried. At any
time that insurance at levels described in Schedule IX is not
being maintained by the Company or any Subsidiary of the Company,
the Company will notify the Banks in writing within two Business
Days thereof and, if thereafter notified by the Agent or the
Required Banks to do so, the Company or any such Subsidiary, as
the case may be, shall obtain insurance at such levels at least
equal to those set forth on Schedule IX. It is understood and
agreed that the Company may provide self-insurance for workers'
compensation claims in an amount not to exceed $2,000,000 over
any two year period.
8.04 CORPORATE FRANCHISES. The Company will, and will
cause each of its Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect
its existence, and all material rights, franchises, licenses and
patents; PROVIDED, HOWEVER, that nothing in this Section 8.04
shall prevent the withdrawal by the Company or any of its
Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not have a Material
Adverse Effect.
8.05 COMPLIANCE WITH STATUTES, ETC. The Company will,
and will cause each of its Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business
and the ownership of its property, except such noncompliances as
could not, individually or in the aggregate, have a Material
Adverse Effect.
8.06 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) The
Company will, and will cause each of its Subsidiaries to, comply,
in all material respects with all Environmental Laws applicable
to ownership or use of the Real Property owned or operated by the
Company or any of its Subsidiaries, will promptly pay or cause to
be paid all costs and expenses incurred in such compliance and
will keep or cause to be kept all such Real Properties free and
clear of any Liens imposed pursuant to such Environmental Laws.
Neither the Company nor any of its Subsidiaries will generate,
use, treat, store, release or dispose of, or permit the genera-
tion, use, treatment, storage, release or disposal of, Hazardous
Materials on any Real Property owned, leased or operated by the
Company or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real
Property except for limited quantities of Hazardous Materials
generated, used, treated, stored, released or disposed of at such
Real Properties in material compliance with all applicable
Environmental Laws and required in connection with the normal
operation, use and maintenance of such Real Property. The
Company and its Subsidiaries shall not dispose of any Hazardous
Materials off site except in material compliance with all applic-
able Environmental Law.
(b) At the written request of the Agent or the
Required Banks, which request shall specify in reasonable detail
the basis therefor, at any time and from time to time, the Com-
pany will provide, at the Company's sole cost and expense, an
environmental site assessment report concerning any Real
Property, at the time of such request owned, operated or leased
by the Company or any of its Subsidiaries, prepared by an
environmental consulting firm approved by the Agent and the
Required Banks, indicating the presence, Release or absence of
Hazardous Materials on or from any such Real Property and the
potential cost of any removal, remedial or corrective action in
connection with any such Hazardous Materials on such Real
Property; PROVIDED, HOWEVER, no such request may be made unless
(i) the Agent or the Required Banks reasonably believes that the
facts or circumstances evidence or suggest that the Company or
any of its Subsidiaries is in material non-compliance with any
Environmental Law, (ii) a Default or Event of Default is in
existence and continuing or (iii) upon the acquisition of any
Real Property by the Company or any of its Subsidiaries
subsequent to the Original Effective Date provided that such
request shall be limited to such newly acquired Real Property.
If the Company fails to provide the same sixty (60) days after
such request was made, the Agent may order the same, and the
Company shall grant and hereby grants to the Agent and the Banks
and their agents access to such Real Property and specifically
grants the Agent and the Banks an irrevocable and non-xclusive
license, subject to the rights of tenants, to undertake such an
assessment all at the expense of the Company.
8.07 ERISA. As soon as possible and, in any event,
within ten Business Days after the Company or any of its
Subsidiaries or any ERISA Affiliate knows or has reason to know
of the occurrence of any of the following, the Company will
deliver to each of the Banks a certificate of the Chief Financial
Officer of the Company setting forth details as to such
occurrence and the action, if any, which the Company, such
Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given
to or filed with or by the Company, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator
with respect thereto: that a Reportable Event has occurred; that
a contributing sponsor (as defined in Section 4001(a)(13) of
ERISA) of a Plan is subject to the advance reporting requirement
of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in
subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such
Plan within the following thirty days; that an accumulated
funding deficiency has been incurred or an application may be or
has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any
required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to
a Plan; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability giving rise to a Lien
under ERISA or the Code; that proceedings may be or have been
instituted to terminate a Plan; that a proceeding has been insti-
tuted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Company, any of its Subsidiaries
or any ERISA Affiliate will or may incur any liability (including
any contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to
a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code
or Section 409 or 502(i) or 502(l) of ERISA; or that the Company
or any Subsidiary may incur any material liability pursuant to
any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA)
or any employee pension benefit plan (as defined in Section 3(2)
of ERISA). The Company will deliver to each of the Banks a com-
plete copy of the annual report (Form 5500) of each Plan required
to be filed with the Internal Revenue Service. In addition to
any certificates or notices delivered to the Banks pursuant to
the first sentence hereof, copies of annual reports and any
notices received by the Company or any of its Subsidiaries or any
ERISA Affiliate with respect to any Plan, shall be delivered to
the Banks no later than ten (10) Business Days after the later of
the date such report or notice has been filed with the Internal
Revenue Service or received by the Company or the Subsidiary or
the ERISA Affiliate. Except to the extent set forth below, this
Section 8.07 shall not apply with respect to any Person that is
an "ERISA Affiliate" solely by reason of MS Shareholders's owner-
ship interest in such Person nor to any Plan maintained or
contributed to by any such Person and the Company shall have no
obligation to provide the information otherwise required by this
Section 8.07 with respect to any such Person or Plan unless the
Company shall have actual knowledge of such information;
PROVIDED, HOWEVER, it is expressly understood that the Company
shall have no obligation to inquire with respect to any such
Person or Plan and that MS Shareholders's knowledge with respect
to any such person or Plan shall not be deemed to be knowledge of
the Company nor shall cause the Company to have reason to know of
such information.
8.08 END OF FISCAL YEARS; FISCAL QUARTERS. The Company
will cause (i) each of its, and each of its Subsidiaries', fiscal
years and fourth fiscal quarter to end within five Business Days
prior to or after the last Business Day of September 30, and
(ii) each of its, and each of its Subsidiaries', first three fis-
cal quarters to end within five Business Days prior to or after
the last Business Day of each December, March and June.
8.09 PERFORMANCE OF OBLIGATIONS. The Company will, and
will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, indenture, security
agreement and other debt instrument by which it is bound and each
other agreement or contract to which it is a party, except such
non-performances as could not in the aggregate have a Material
Adverse Effect.
8.10 PAYMENT OF TAXES. The Company will pay and
discharge, and will cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties
attached thereto, and all lawful claims which, if unpaid, might
become a lien or charge upon any properties of the Company or any
of its Subsidiaries; PROVIDED that neither the Company nor any of
its Subsidiaries shall be required to pay any such tax, assess-
ment, charge, levy or claim which is being contested in good
faith and by proper proceedings or the taking of other proper
actions if it has maintained adequate reserves with respect
thereto in accordance with generally accepted accounting
principles.
8.11 USE OF PROCEEDS. All proceeds of the Loans shall
be used as provided in Section 7.08.
8.12 REGISTER. The Company hereby designates the Agent
to serve as the Company's agent, solely for purposes of this
Section 8.12, to maintain a register (the "Register") on which it
will record the Commitments from time to time of each of the
Banks, the Loans made by each of the Banks and each repayment in
respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such
recordation shall not affect the Company's obligations in respect
of such Loans. With respect to any Bank, the transfer of the
Commitments of such Bank and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitments shall not
be effective until such transfer is recorded on the Register
maintained by the Agent with respect to ownership of such
Commitments and Loans and prior to such recordation all amounts
owing to the transferor with respect to such Commitments and
Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Agent on the Register only upon
the acceptance by the Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 13.04(b).
Coincident with the delivery of such an assignment and assumption
agreement to the Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Bank shall
surrender the Note evidencing such Loan, and thereupon one or
more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank.
The Company agrees to indemnify the Agent from and against any
and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by
the Agent in performing its duties under this Section 8.12.
8.13 FURTHER ASSURANCES. The Company agrees to cause
each Subsidiary established or created in accordance with Section
9.15 to execute and deliver a guaranty of all Obligations in form
and substance satisfactory to the Agent and the Required Banks.
Section 9. NEGATIVE COVENANTS. The Company hereby
covenants that on and after the Restatement Effective Date and
until the Total Commitments and all Letters of Credit have
terminated and the Loan, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
9.01 LIENS. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets
(real or personal, tangible or intangible) of the Company or any
of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse
to the Company or any of its Subsidiaries), or assign any right
to receive income or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any
similar recording or notice statute; PROVIDED that the provisions
of this Section 9.01 shall not prevent the creation, incurrence,
assumption or existence of the following (liens described below
are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes not yet due or Liens for
taxes being contested in good faith and by appropriate pro-
ceedings for which adequate reserves have been established
in accordance with United States generally accepted account-
ing principles;
(ii) Liens in respect of property or assets of the
Company imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for bor-
rowed money, such as carriers', warehousemen's, material-
men's and mechanics' liens and other similar Liens arising
in the ordinary course of business, and (x) which do not in
the aggregate materially detract from the value of the
Company's property or assets or materially impair the use
thereof in the operation of the business of the Company or
(y) which Liens or the obligations secured thereby are being
contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or
sale of the property or assets subject to any such Lien;
(iii) Liens of the Company in existence on the
Restatement Effective Date which are listed, and the
property subject thereto described, on Schedule X, without
giving effect to any extensions or renewals thereof except
such extensions or renewals as are expressly set forth on
Schedule X as permitted, and only to the respective date, if
any, set forth on such Schedule X for the removal and ter-
mination of any such Liens;
(iv) Liens placed upon equipment or machinery of the
Company used in the ordinary course of the business of the
Company and liens placed on equipment, machinery or
buildings and the underlying related real property to such
buildings in connection with the increase in the capacity of
the distribution center at the South Carolina Facility at
the time of acquisition thereof by the Company to secure
Indebtedness incurred to pay all or a portion of the pur-
chase price thereof, PROVIDED that (x) the aggregate
principal amount of all Indebtedness secured by Liens per-
mitted by this clause (iv) is permitted to be incurred
pursuant to Section 9.05(v) and (y) in all events, the Lien
encumbering the buildings, equipment or machinery so
acquired does not encumber any other asset of the Company or
any of its Subsidiaries;
(v) Liens securing Indebtedness of the Company evid-
enced by Capitalized Lease Obligations to the extent per-
mitted by Section 9.05(v), PROVIDED that such Liens only
serve to secure the payment of Indebtedness arising under
such Capitalized Lease Obligation and the Lien encumbering
the asset being leased pursuant to the Capitalized Lease
Obligation does not encumber any other asset of the Company
or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, encroach-
ments and other similar charges or encumbrances arising in
the ordinary course of business and not materially interfer-
ing with the conduct of the business of the Company or any
of its Subsidiaries;
(vii) Liens arising from precautionary UCC financing
statement filings regarding operating leases;
(viii) Liens placed on unutilized Real Property (and any
crops grown thereon) of the Company which do not in the
aggregate materially detract from the value of the Company's
property or assets or materially impair the use thereof in
the operation of the business of the Company;
(ix) the Permitted Filot Transaction; and
(x) Liens not otherwise permitted by the foregoing
clauses (i) through (ix), inclusive, to the extent attaching
to properties and assets with an aggregate fair value not in
excess of, and securing liabilities not in excess of,
$1,000,000 in the aggregate at any one time outstanding.
9.02 CONSOLIDATION; MERGER; PURCHASE OR SALE OF ASSETS;
ETC. The Company will not, and will not permit any of its
Subsidiaries to, wind up, liquidate or dissolve its affairs or
enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of all or any part of its prop-
erty or assets, or enter into any partnerships, joint ventures or
sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property
or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of
business) of any Person (or agree to do any of the foregoing at
any future time), except that:
(i) Capital Expenditures by the Company shall be
permitted;
(ii) the Company may, in the ordinary course of
business, sell, lease or otherwise dispose of any assets
which, in the reasonable judgment of the Company, have
become uneconomic, obsolete or worn out so long as the
aggregate amount of Net Sale Proceeds from all such sales in
any one fiscal year does not exceed $5,000,000;
(iii) the Company may lease (as lessee) real or personal
property to the extent permitted by Section 9.04 and Section
9.05 and the Company may lease (as lessor) Real Property in
accordance with Section 9.01(viii);
(iv) the Company may make sales or other dispositions
of inventory and Cash Equivalents in the ordinary course of
business and the Company may otherwise dispose of inventory
by providing samples to potential customers, vendors and
other parties in amounts and at times and otherwise in the
ordinary course of business and consistent with past
practice;
(v) investments may be made to the extent permitted by
Section 9.06;
(vi) sales of receivables as described in, and in
accordance with the provisions of, Section 4.02(A)(c)(iii)
shall be permitted;
(vii) the Company may transfer assets to newly created
or established Subsidiaries in accordance with Section 9.15;
and
(viii) the Permitted Filot Transaction shall be
permitted.
9.03 DIVIDENDS. The Company shall not, and shall not
permit any of its Subsidiaries to, authorize, declare or pay any
Dividends with respect to the Company or any of its Subsidiaries,
except that (i) any Subsidiary of the Company may pay Dividends
to the Company or any Wholly-Owned Subsidiary of the Company and,
(ii) the Company may pay cash Dividends to its shareholders if at
the time of, and immediately after giving effect on a pro forma
basis to, the declaration or payment of the proposed Dividend,
(1) no Default or Event of Default shall have occurred and be
continuing and (2) the aggregate amount of all Dividends declared
or made after the Restatement Effective Date shall not exceed the
sum of:
(A) $1,000,000, plus
(B) 50% of the aggregate cumulative Consolidated Net
Income of the Company accrued on a cumulative basis during
the period beginning on September 30, 1997 and ending on the
last day of the Company's last fiscal quarter ending prior
to the date of such proposed Dividend (or, if such aggregate
cumulative Consolidated Net Income shall be a loss, minus
100% of such amount).
9.04 LEASES. The Company will not permit the aggregate
payments (including, without limitation, any property taxes paid
as additional rent or lease payments) made by the Company and its
Subsidiaries on a consolidated basis under any agreement to rent
or lease any real or personal property (or any extension or
renewal thereof) (excluding Capitalized Lease Obligations) to
exceed $2,000,000 in any fiscal year of the Company.
Notwithstanding anything to the contrary contained in the fore-
going, the payments to be made by the Company pursuant to the
Lease Agreement shall not be taken into account when determining
compliance with this Section 9.04.
9.05 INDEBTEDNESS. The Company will not, and will not
permit any of its Subsidiaries to, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement
and the other Credit Documents;
(ii) Indebtedness of the Company existing on the
Restatement Effective Date shall be permitted to the extent
the same is listed on Schedule VIII, PROVIDED that no
refinancings or renewals of the Indebtedness except as
expressly set forth on Schedule VIII shall be permitted and,
in any event, refinancings and renewals shall not be in
excess of the respective amounts set forth on Schedule VIII
and such refinancing or renewal shall be at customary and
market terms at the time of such refinancing;
(iii) accrued expenses and current trade accounts
payable by the Company and incurred in the ordinary course
of business of the Company;
(iv) Indebtedness of the Company constituting
Contingent Obligations arising pursuant to a guaranty of the
obligations of any employee of the Company, to the extent
permitted by Section 9.06(iii);
(v) Indebtedness of the Company evidenced by Capital-
ized Lease Obligations, unsecured Indebtedness and
Indebtedness secured by Liens permitted under Section
9.01(iii)(only with respect to Indebtedness secured
thereunder), (iv) and (v) in an amount not to exceed at any
time $15,000,000;
(vi) Indebtedness of the Company arising in connection
with entering into futures or forward purchase contracts in
accordance with Section 9.06(v); and
(vii) Indebtedness of Subsidiaries of the Company to the
Company to the extent permitted by Section 9.06(vi).
9.06 ADVANCES, INVESTMENTS AND LOANS. The Company will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, lend money or credit or make advances to any Person,
or purchase or acquire any stock, obligations or securities of,
or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures
contract or hold any cash or Cash Equivalents, except that the
following shall be permitted:
(i) the Company may acquire and hold accounts receiv-
ables owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accor-
dance with customary terms;
(ii) the Company may acquire and hold cash and Cash
Equivalents;
(iii) the Company may (x) make or maintain advances to
employees of the Company in the ordinary course of business,
and (y) guaranty, in the ordinary course of business, loans
and advances to employees of the Company, PROVIDED that the
aggregate principal amount of all such advances and guaran-
teed obligations pursuant to this clause 9.06(iii) shall not
exceed $500,000 in the aggregate at any one time
outstanding;
(iv) the Company may enter into interest rate protec-
tion or other interest rate or currency hedging agreements
in the ordinary course of business to protect against
fluctuations in interest rates and currencies so long as
such agreements are not entered into for speculative
purposes;
(v) the Company may enter into forward purchase
contracts with suppliers of durum wheat to meet its normal
raw material supply requirements in the ordinary course of
business or futures contracts entered into for delivery of
durum wheat in the ordinary course of business; and
(vi) the Company may make loans or advances to, or
investments in, Subsidiaries created or established in
accordance with Section 9.15 so long as the fair market
value of the assets loaned, advanced to, or invested in, all
such Subsidiaries, together with the fair market value of
all assets transferred to, all such Subsidiaries does not
exceed $2,000,000 at any time.
9.07 TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any of its Subsidiaries to, enter into
any transaction or series of related transactions, whether or not
in the ordinary course of business, with any Affiliate of the
Company other than on terms and conditions substantially as
favorable to the Company or such Subsidiary as would be obtain-
able by the Company or such Subsidiary at that time in a compar-
able arm's-length transaction with a Person other than an Affili-
ate; PROVIDED that the following shall be permitted: (i) the
payment of customary fees to members of the Board of Directors of
the Company, (ii) transactions expressly permitted by Sections
9.03, 9.06(iii) and 9.06(vi), and (iii) the payment of fees to
Morgan Stanley Group Inc. or its Affiliates from time to time for
financial, consulting and underwriting services provided to the
Company so long as such fees do not exceed the then usual and
customary fees of Morgan Stanley Group Inc. or its Affiliates for
similar services.
9.08 CASH FLOW COVERAGE RATIO. The Company will not
permit the ratio of (i) Consolidated EBITDA to (ii) the sum of
Consolidated Interest Expense and Dividends paid by the Company
or its Subsidiaries (other than Dividends paid to the Company or
a Wholly-Owned Subsidiary of the Company), for any Test Period
ended on the last day of a fiscal quarter set forth below to be
less than the ratio set forth opposite such fiscal quarter:
Fiscal Quarter
Ended In Ratio
______________ _____
December 1997 3.50:1.00
and the last day of
each fiscal quarter
thereafter
9.09 MINIMUM CONSOLIDATED NET WORTH. The Company will
not permit its Consolidated Net Worth at any time during any
fiscal quarter after the Restatement Effective Date to be less
than an amount equal to the sum of (i) the Net Cash Proceeds
received by the Company from the Initial Public Offering, (ii)
the Consolidated Net Worth as of the end of the fiscal year
ending September, 1997 and (iii) 50% of the aggregate cumulative
Consolidated Net Income, excluding 100% of any net losses during
such period, accrued on a quarterly basis during the period
beginning on the fiscal quarter starting closest to October 1,
1997, minus $5,000,000.
9.10 LEVERAGE RATIO. The Company will not permit the
ratio of (i) Consolidated Total Indebtedness to (ii) Consolidated
EBITDA, for any Test Period ended on the last day of a fiscal
quarter set forth below to be greater than the ratio set forth
opposite such fiscal quarter:
Fiscal Quarter
Ended In Ratio
______________ _____
December 1997 3.50:1.00
and the last day of
each fiscal quarter
thereafter
9.11 LIMITATION ON VOLUNTARY PAYMENTS AND
MODIFICATIONS OF INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF
INCORPORATION, BY-LAWS AND CERTAIN OTHER AGREEMENTS; ETC. The
Company will not, and will not permit any of its Subsidiaries to,
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption (including pur-
suant to any change of control provision) or acquisition for
value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before
due for the purpose of paying when due) any Existing Obligations,
(ii) amend or modify, or permit the amendment or modification of,
any provision of the Existing Obligations (except as provided in
Section 9.05(ii)), any Permitted Filot Transaction Document or
any agreement (including, without limitation, any purchase agree-
ment, indenture, loan agreement or security agreement) relating
to any of the foregoing, (iii) amend, modify or change (x) its
Certificate of Incorporation (including, without limitation, by
the filing or modification of any certificate of designation) or
By-Laws other than (A) any amendment increasing the authorized
number of shares of common equity which may be issued by such
Person, to the extent the issuance of such equity is permitted by
this Agreement and (B) any other amendment, modification, or
change which does not authorize redeemable common stock or any
preferred stock and which would not adversely affect any Bank, or
(y) any agreement (other than any agreement with respect to which
amendments, modifications or changes are covered by clause (vii)
below) entered into by it with respect to its capital stock, or
enter into any new agreement with respect to its capital stock
except agreements which are not adverse to any Bank, do not
violate or breach, and are not inconsistent with, any of the
terms of this Agreement and which do not, and will not, involve
the payment by the Company of any amounts and do not result in
the Company incurring then or at any time in the future any
liability or monetary obligation, (iv) amend, modify or change,
terminate or enter into any new Shareholders' Agreement except
amendments, modifications or changes which are not adverse to any
Bank, do not violate or breach, and are not inconsistent with,
any of the terms of this Agreement and which do not, and will
not, involve the payment by the Company of any amounts and do not
result in the Company incurring then or at any time in the future
any liability or monetary obligation, (v) enter into any Tax
Sharing Agreement, (vi) amend, modify, change or terminate any
material provision of the CPC Contract or (vii) enter into any
new Employee Benefit Plan or Employment Agreement or amend,
modify or change any Employee Benefit Plan or Employment
Agreement, except in the case of this clause (vii) if the aggre-
gate costs to the Company and its Subsidiaries as a result of
such amendments, modifications, changes and/or new agreements are
not reasonably likely to have a Material Adverse Effect.
9.12 LIMITATION ON CERTAIN RESTRICTIONS ON
SUBSIDIARIES. The Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or
any other interest or participation in its profits owned by the
Company or any Subsidiary of the Company, or pay any Indebtedness
owed to the Company or a Subsidiary of the Company, (b) make
loans or advances to the Company or any of the Company's
Subsidiaries or (c) transfer any of its properties or assets to
the Company (other than in the case of this clause (c) restric-
tions existing as a result of Permitted Liens on such properties
or assets), except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) this Agreement and
the other Credit Documents and (iii) customary provisions
restricting subletting or assignment of any lease governing a
leasehold interest of the Company or a Subsidiary of the Company.
9.13 BUSINESS. The Company will not engage (directly
or indirectly) in any business other than the business in which
it is engaged on the Restatement Effective Date and any other
reasonably related businesses.
9.14 LIMITATION ON CREATION OF SUBSIDIARIES. The
Company shall not, and shall not permit any of its Subsidiaries
to, establish, create or acquire any Subsidiary, except the Com-
pany may establish or create Subsidiaries and transfer assets to
such newly established or created Subsidiaries so long as (x) the
aggregate fair market value of all assets transferred to all such
Subsidiaries at the time of such transfer does not exceed
$2,000,000 and (y) the aggregate fair market value of all assets
held by all such Subsidiaries at any time does not exceed
$2,000,000.
Section 10. EVENTS OF DEFAULT. Upon the occurrence of
any of the following specified events (each an "Event of
Default"):
10.01 PAYMENTS. The Company shall (i) default in the
payment when due of any principal of any Loan or any Note or any
Unpaid Drawing, or (ii) default, and such default shall continue
unremedied for two or more Business Days, in the payment when due
of any interest on any Loan, Note or Unpaid Drawing or of any Fee
or of other amounts owing hereunder or under any Credit Document;
or
10.02 REPRESENTATIONS; ETC. Any representation, war-
ranty or statement made by the Company or any of its Subsidiaries
herein or in any other Credit Document or in any certificate
delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made;
or
10.03 COVENANTS. The Company shall (i) default in the
due performance or observance by it of any term, covenant or
agreement contained in Section 8.01(f)(i), 8.08, 8.12 or Section
9 or (ii) default in the due performance or observance by it of
any other term, covenant or agreement contained in this Agreement
and such default shall continue unremedied for a period of thirty
(30) days after written notice to the Company by the Agent or any
Bank; or
10.04 DEFAULT UNDER OTHER AGREEMENTS. The Company or
any Subsidiary of the Company shall (i) default in any payment of
any Indebtedness (other than the Notes) beyond the period of
grace (not to exceed thirty (30) days), if any, provided in the
instrument or agreement under which such Indebtedness was created
or (ii) default in the observance or performance of any agreement
or condition relating to any Indebtedness (other than the Notes
or contained in any instrument or agreement evidencing, securing
or relating thereto), or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is re-
quired), any such Indebtedness to become due prior to its stated
maturity, or (iii) any Indebtedness (other than the Notes) of the
Company or any Subsidiary of the Company shall be declared to be
due and payable, or required by its terms to be prepaid other
than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, PROVIDED that it shall not be a Default
or Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding
clauses (i) through (iii), inclusive, is at least $2,500,000; or
10.05 BANKRUPTCY; ETC. The Company or any Subsidiary
of the Company shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy,"
as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against
the Company or any Subsidiary of the Company, and the petition is
not controverted within ten (10) days, or is not dismissed or
discharged within sixty (60) days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of
the property of the Company or any Subsidiary of the Company, or
the Company or any Subsidiary of the Company commences any other
proceeding under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any Subsidiary of the Company,
or there is commenced against the Company or any Subsidiary of
the Company any such proceeding which remains undismissed or
undischarged for a period of sixty (60) days, or the Company or
any Subsidiary of the Company is adjudicated insolvent or bank-
rupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company or any Subsidiary
of the Company suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue
undischarged or unstayed for a period of sixty (60) days; or the
Company or any Subsidiary of the Company makes a general assign-
ment for the benefit of creditors; or any corporate action is
taken by the Company or any Subsidiary of the Company for the
purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the
minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amorti-
zation period is sought or granted under Section 412 of the Code,
any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA, any Plan shall
have an Unfunded Current Liability, the Company or any Subsidiary
of the Company or any ERISA Affiliate has incurred or is likely
to incur a liability to or on account of a Plan under Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204, or
4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the
Code, or the Company or any Subsidiary of the Company has
incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1)
of ERISA) which provide benefits to retired employees (other than
as required by Section 601 of ERISA) or employee pension benefit
plans (as defined in Section 3(2) of ERISA); (b) there shall
result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material
risk of incurring a liability; and (c) which lien, security
interest or liability, in the opinion of the Required Banks, will
have a material adverse effect upon the business, operations,
condition (financial or otherwise) or prospects of the Company or
of any Subsidiary; or
10.07 JUDGMENTS. One or more judgments or decrees
shall be entered against the Company or any Subsidiary of the
Company involving in the aggregate for the Company and its Sub-
sidiaries a liability (to the extent not paid or covered by a
reputable insurance company which has accepted liability in writ-
ing) of $2,500,000 or more and all such judgments or decrees
shall not be vacated, discharged or stayed or bonded pending
appeal for any period of thirty (30) consecutive days; or
10.08 CHANGE OF CONTROL. A Change of Control shall
occur;
then, and in any such event, and at any time thereafter, if any
Event of Default shall then be continuing, the Agent, upon the
written request of the Required Banks, shall by written notice to
the Company, take any or all of the following actions, without
prejudice to the rights of the Agent, any Bank or the holder of
any Note to enforce its claims against the Company (PROVIDED
that, if an Event of Default specified in Section 10.05 shall
occur with respect to the Company, the result which would occur
upon the giving of written notice by the Agent to the Company as
specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total
Commitments terminated, whereupon all Commitments of each Bank
shall forthwith terminate immediately and any Commitment
Commission and other Fees shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and the Notes
and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company; (iii) terminate
any Letter of Credit which may be terminated in accordance with
its terms; and (iv) direct the Company to pay (and the Company
agrees that upon receipt of such notice, or upon the occurrence
of an Event of Default specified in Section 10.05 with respect to
the Company it will pay) to the Agent at the Payment Office such
additional amount of cash, to be held as security by the Agent,
as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Company and then
outstanding.
Section 11. DEFINITIONS AND ACCOUNTING TERMS.
11.01 DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of
the terms defined):
"Affiliate" shall mean, with respect to any Person, any
other Person directly or indirectly controlling (including but
not limited to all directors and officers of such Person),
controlled by, or under direct or indirect common control with,
such Person; PROVIDED, HOWEVER, that for purposes of Section
9.07, an Affiliate of the Company shall include any Person that
directly or indirectly owns more than 5% of any class of the
capital stock of the Company and any officer or director of the
Company or any such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean Bankers Trust Company, in its
capacity as Agent for the Banks hereunder, and shall include any
successor to the Agent appointed pursuant to Section 12.09.
"Agreement" shall mean this Credit Agreement, as
modified, supplemented or amended from time to time.
"Applicable Margin or Applicable Commitment Commission
Percentage" shall mean, as of any date of determination, the
ratio of Consolidated Total Indebtedness as of the most recent
fiscal quarter ending immediately prior to such date of
determination to Consolidated EBITDA for the four fiscal quarter
period ending immediately prior to such determination date as set
forth below:
APPLICABLE APPLICABLE APPLICABLE
CONSOLIDATED TOTAL COMMITMENT MARGIN FOR MARGIN FOR
INDEBTEDNESS/ COMMISSION BASE RATE EURODOLLAR
CONSOLIDATED EBITDA PERCENTAGE LOANS LOANS
___________________ __________ __________ __________
less than or equal
to 1.00 0.225% 0.00 0.375
less than or equal
to 1.75 but greater
than 1.00 0.250% 0.00 0.50
less than or equal
to 2.25 but greater
than 1.75 0.275% 0.00 0.625
less than or equal
to 2.75 but greater
than 2.25 0.300% 0.00 0.75
less than or equal
to 3.25 but greater
than 2.75 0.350% 0.00 1.00
less than or equal
to 3.50 but greater
than 3.25 0.400% 0.25 1.25
PROVIDED, however from the Restatement Effective Date and prior
to the delivery of the first certificate of the Company, as
described below for the first fiscal quarter ending December
1997, the Applicable Margin or Applicable Commitment Commission
Percentage shall assume that the Consolidated Total Indebtedness
to Consolidated EBITDA is less than or equal to 1.00, so long as
the Company's outstanding Loans and Letter of Credit Outstandings
shall be less than $22,000,000 and shall be assumed to be less
than or equal to 1.75 but greater than 1.00 to the extent the
Company's outstanding Loans and Letter of Credit Outstandings is
greater than $22,000,000.
To the extent there shall exist a Default or Event of Default the
Applicable Commitment Commission Percentage and Applicable Margin
shall be determined as if the ratio of Consolidated Total
Indebtedness to Consolidated EBITDA is equal to 3.50.
The Applicable Commitment Commission Percentage and Applicable
Margin shall be determined by the delivery of a certificate of
the Company, certified by the Chief Financial Officer of the
Company, together with the financial statements required to be
delivered pursuant to Section 8.01 which certificates shall set
forth the Applicable Commitment Commission Percentage and
Applicable Margin arising from the calculation of the ratio of
Consolidated Total Indebtedness to Consolidated EBITDA as of the
end of the fiscal quarter or fiscal year for which such
certificate if being delivered. The Applicable Commitment
Commission Percentage and Applicable Margin shall apply except as
set forth above in the case of a Default or Event of Default to
the period beginning on the date such financial statements are
delivered pursuant to Section 8.01 and ending on the earlier of
(the "End Date") (i) the next date of actual delivery of the
financial statements required to be delivered pursuant to Section
8.01 and (ii) the date on which such financial statements are
required to be delivered. The day of delivery of such financial
statements in which such period commences is herein being
referred to as the "Start Date".
"Approved Fund" shall mean, with respect to any Bank that
is a fund that invests in bank loans (the "Relevant Bank"), any
other fund that invests in bank loans that is managed by the
investment manager, or an Affiliate of such manager, that manages
the Relevant Bank.
"Arranger" shall mean Bankers Trust Company, in its
capacity as Arranger for the Banks hereunder.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any institution which becomes a "Bank"
hereunder pursuant to Section 1.12 and/or 13.04.
"Bank Default" shall mean (i) the refusal (which has not
been retracted) of a Bank to make available its portion of any
Borrowing (including a Mandatory Borrowing) or to fund its
portion of any unreimbursed payment under Section 2.04(c) or
(ii) a Bank having notified in writing the Company and/or the
Agent that it does not intend to comply with its obligations
under this Agreement, in either case as a result of any takeover
of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in
Section 10.05.
"Bankruptcy Default" shall mean any Default or Event of
Default existing with respect to the Company pursuant to Section
10.05.
"Base Rate" shall mean the higher of the rate which is
(i) 1/2 of 1% in excess of the Federal Funds Effective Rate and
(ii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and
(ii) each Loan designated or deemed designated as such by the
Company at the time of the incurrence thereof or conversion
thereto.
"Borrowing" shall mean the borrowing of one Type of Loan
from all the Banks having Commitments on a given date (or
resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period,
PROVIDED that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual
capacity.
"Business Day" shall mean (i) for all purposes other than
as covered by clause (ii) below, any day except Saturday, Sunday
and any day which shall be in New York City a legal holiday or a
day on which banking institutions are authorized or required by
law or other government action to close and (ii) with respect to
all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is
a Business Day described in clause (i) above and which is also a
day for trading by and between banks in the New York interbank
Eurodollar market.
"Capital Expenditures" shall mean, with respect to any
Person, all expenditures by such Person which should be capital-
ized in accordance with generally accepted accounting principles,
including all such expenditures with respect to fixed or capital
assets (including, without limitation, expenditures for
maintenance and repairs which should be capitalized in accordance
with generally accepted accounting principles) and amounts
representing capitalized slotting and other marketing costs
(whether or not such amounts should be capital expenditures in
accordance with generally accepted accounting principles) and,
without duplication, the amount of Capitalized Lease Obligations
incurred by such Person, PROVIDED that Capital Expenditures shall
not include interest capitalized in accordance with generally
accepted accounting principles.
"Capitalized Lease Obligations" of any Person shall mean
all rental obligations which, under generally accepted accounting
principles, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof
accounted for as indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by
the United States or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and
certificates of deposit of (x) any Bank or (y) any other commer-
cial bank having, or which is the principal banking subsidiary of
a bank holding company having, a long-term unsecured debt rating
of at least "A" or the equivalent thereof from Standard & Poor's
Corporation ("S&P") or "A2" or the equivalent thereof from
Moody's Investors Service, Inc. ("Moody's") with maturities of
not more than six months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial
paper issued by any Person incorporated in the United States
rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's and in each case matur-
ing not more than six months after the date of acquisition by
such Person and (v) investments in money market funds substanti-
ally all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same
may be amended from time to time, 42 U.S.C. 9601 ET SEQ.
"Change of Control" shall mean and include the occurrence
of one or more of the following: (i) any Person, entity or
"group" (within the meaning of Section 13(d) and 14(d) of the
Securities Exchange Act), other than the MS Shareholders, shall
become the "beneficial owner" (as defined in Rules 13d-3 and 13d-
5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) of 20% or more of
any outstanding class of capital stock of the Company having
ordinary voting power in the election of directors (PROVIDED,
however, that no Person, entity or group shall be deemed to
beneficially own any shares of such capital stock solely by
reason of being a party to the Stockholders Agreement), or (ii)
the Board of Directors of the Company shall cease to consist of
Continuing Directors.
"Class A Common Stock" shall mean the Class A Convertible
Common Stock of the Company, par value $0.001 per share.
"Class B Common Stock" shall mean the Class B Convertible
Common Stock of the Company, par value $0.001 per share.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and
the rulings issued thereunder. Section references to the Code
are to the Code, as in effect at the date of this Agreement, and
to any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.07.
"Commitment" shall mean, with respect to each Bank, such
Bank's Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided
in Section 3.01(a).
"Common Stock" shall mean the Class A Common Stock and
the Class B Common Stock.
"Company" shall have the meaning provided in the first
paragraph of this Agreement.
"Consolidated Current Assets" shall mean, at any time,
the consolidated current assets of the Company and its Subsidi-
aries at such time plus the Total Unutilized Revolving Loan
Commitment.
"Consolidated Current Liabilities" shall mean, at any
time, the consolidated current liabilities of the Company and its
Subsidiaries at such time, but excluding the current portion of
any long-term Indebtedness and any Revolving Loans which would
otherwise be included therein.
"Consolidated EBITDA" shall mean, for any period, the
Consolidated Net Income of the Company and its Subsidiaries,
before interest income, Consolidated Interest Expense and provi-
sion for taxes and without giving effect to (x) any extraordinary
gains or gains from sales of assets other than inventory sold in
the ordinary course of business (determined after taking into
account losses from sales of such assets) and (y) the write-off
of deferred debt issuance costs (including, without limitation,
all legal fees, financing fees and all other costs and expenses
incurred in connection with any amendment to the Existing Credit
Agreement and any amendment to this Agreement) and adjusted by
adding thereto the amount of all amortization of intangibles and
depreciation and other non-cash charges related to stock options
and similar employee benefit plans that were deducted in arriving
at Consolidated Net Income for such period; PROVIDED, that to the
extent Consolidated EBITDA is being determined for any period of
less than four consecutive fiscal quarters, the amount of
Consolidated EBITDA to be used for purposes of calculations being
made pursuant to Section 9.10 for the period of determination
shall be equal to the product of the amount of Consolidated
EBITDA for such period and a fraction, the numerator of which is
4 and the denominator of which is the number of quarters in such
period.
"Consolidated Interest Expense" shall mean, for any
period, the total consolidated interest expense, net of interest
income, of the Company and its Subsidiaries for such period
(calculated without regard to any limitations on the payment
thereof but excluding amortization of all deferred debt issuance
costs (including, without limitation, all legal fees, financing
fees and all other costs and expenses incurred in connection with
any amendment to the Existing Credit Agreement and any amendment
to this Agreement)), including, but not limited to, interest
capitalized in accordance with generally accepted accounting
principles, plus, without duplication, that portion of
Capitalized Lease Obligations of the Company and its Subsidiaries
representing the interest factor for such period.
"Consolidated Net Income" shall mean, for any period, the
net after-tax income of the Company and its Subsidiaries for such
period determined on a consolidated basis.
"Consolidated Net Worth" shall mean the net worth of the
Company and its Subsidiaries determined on a consolidated basis.
"Consolidated Total Indebtedness" shall mean, at any
time, all Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis (other than Indebtedness of
the type described in clause (vii) of the definition thereof)
except to the extent amounts are owing with respect thereto upon
the termination of the respective agreement constituting such
Indebtedness), plus any original issue discount attributable to
such Indebtedness that would be payable at such time if such
Indebtedness were to be or become due and payable.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary obli-
gor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii)
to advance or supply funds (x) for the purchase or payment of any
such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency of the primary obligor, (iii) to pur-
chase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect there-
of; PROVIDED, HOWEVER, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean each director of the
Company on the Restatement Effective Date and each other director
or director of the Company nominated for election to the board of
directors by a majority of the then Continuing Directors.
"CPC" shall mean CPC International Inc., a Delaware
corporation.
"CPC Contract" shall mean the Manufacturing and
Distribution Agreement dated April 15, 1997 between CPC and the
Company.
"Credit Documents" shall mean this Agreement and, after
the execution and delivery thereof, each Note, each Notice of
Borrowing, each Notice of Conversion, each Letter of Credit and
each Letter of Credit Request.
"Credit Event" shall mean the making of any Loan and the
issuance of any Letter of Credit.
"CVC" shall mean Citicorp Venture Capital, Ltd., a New
York corporation.
"Debt Agreements" shall have the meaning provided in
Section 5.07.
"Default" shall mean any event, act or condition which
with notice or lapse of time, or both, would constitute an Event
of Default.
"Defaulting Bank" shall mean any Bank with respect to
which a Bank Default is in effect.
"Dividend" with respect to any Person shall mean that
such Person has declared or paid a dividend or returned any
equity capital to its stockholders or authorized or made any
other distribution, payment or delivery of property (other than
common stock of such Person) or cash to its stockholders as such,
or redeemed, retired, purchased or otherwise acquired, directly
or indirectly, for a consideration any shares of any class of its
capital stock outstanding on or after the Restatement Effective
Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of
the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration
any shares of any class of the capital stock of such Person
outstanding on or after the Restatement Effective Date (or any
options or warrants issued by such Person with respect to its
capital stock). Without limiting the foregoing, "Dividends" with
respect to any Person shall also include all payments made or
required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans
or any similar plans or setting aside of any funds for the
foregoing purposes.
"Documents" shall mean the Credit Documents, the CPC
Contract, the Initial Public Offering Documents and each of the
other agreements, instruments and other documents executed and
delivered in connection with the transactions contemplated hereby
on the Restatement Effective Date.
"Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States.
"Drawing" shall have the meaning provided in Section
2.05(b).
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, other "accredited investor" (as
defined in Regulation D of the Securities Act) or a "qualified
institutional buyer" as defined in Rule 144A of the Securities
Act.
"Employee Benefit Plans" shall have the meaning provided
in Section 5.07.
"Employment Agreements" means the Employment Agreement
effective as of October 15, 1997, between the Company and Timothy
S. Webster; the Employment Agreement dated as of September 30,
1997 between the Company and Norman F. Abreo; the Employment
Agreement dated as of September 30, 1997 between the Company and
Horst W. Schroeder; the Employment Agreement dated September 30,
1997 between the Company and David E. Watson; and the Employment
Agreement dated September 30, 1997 between the Company and David
B. Potter.
"End Date" shall have the meaning provided in the
definition of "Applicable Margin."
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, directives,
demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to
any Environmental Law or any permit issued, or any approval
given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by govern-
mental or regulatory authorities for enforcement, cleanup, re-
moval, response, remedial or other actions or damages pursuant to
any applicable Environmental Law, and (b) any and all Claims by
any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Law" means any federal, state or local
statute, law, rule, regulation, ordinance, code, guideline, writ-
ten policy and rule of common law now or hereafter in effect and
in each case as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limit-
ation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. 1251 ET SEQ.; the Toxic Substances Control Act, 15
U.S.C. 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. 7401 ET
SEQ.; the Safe Drinking Water Act, 42 U.S.C. 300(f) ET SEQ.;
the Oil Pollution Act of 1990, 33 U.S.C. 2701 ET SEQ.; Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 136 ET
SEQ.; and any state and local counterparts or equivalents
thereof.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regu-
lations promulgated and rulings issued thereunder. Section
references to ERISA are to ERISA, as in effect at the date of
this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Company or any of
its Subsidiaries would be deemed to be a "single employer" within
the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean each Loan designated as such
by the Company at the time of the incurrence thereof or
conversion thereto.
"Event of Default" shall have the meaning provided in
Section 10.
"Existing A Term Loans" shall mean the "A Term Loans"
under, and as defined in, the Existing Credit Agreement.
"Existing Agent" shall mean BTCo as "Agent" under, and as
defined in, the Existing Credit Agreement.
"Existing B Term Loans" shall mean the "B Term Loans"
under, and as defined in, the Existing Credit Agreement.
"Existing Banks" shall mean each Person which was a
"Bank" under, and as defined in, the Existing Credit Agreement
immediately prior to the Restatement Effective Date.
"Existing C Term Loans" shall mean the "C Term Loans"
under, and as defined in, the Existing Credit Agreement.
"Existing Credit Agreement" shall have the meaning
provided in the first Whereas clause of this Agreement.
"Existing D Term Loans" shall mean the "D Term Loans"
under, and as defined in, the Existing Credit Agreement.
"Existing Letters of Credit" shall mean (i) Existing
Standby Letters of Credit and (ii) Existing Trade Letters of
Credit.
"Existing Loans" shall mean, collectively, the Existing A
Term Loans, the Existing B Term Loans, the Existing C Term Loans,
the Existing D Term Loans and the Existing Revolving Loans.
"Existing Obligations" shall have the meaning provided in
Section 7.21.
"Existing Revolving Loans" shall mean all "Revolving
Loans" under, and as defined in, the Existing Credit Agreement.
"Existing Standby Letters of Credit" shall have the
meaning provided in Section 2.01(a).
"Existing Trade Letters of Credit" shall mean each of the
"Trade Letters of Credit" issued under, and as defined in, the
Existing Credit Agreement.
"Facing Fee" shall have the meaning provided in Section
3.01(d).
"Federal Funds Effective Rate" shall mean 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 the
Agent from three Federal Funds brokers of recognized standing
selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or
referred to in Section 3.01.
"Final Maturity Date" shall mean the fifth anniversary of
the Restatement Effective Date.
"Hazardous Materials" means (a) any petroleum or petro-
leum products, radioactive materials, asbestos in any form that
is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "re-
stricted hazardous substances," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar
import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest,
fees and charges) of such Person for borrowed money or for the
deferred purchase price of property or services (other than trade
payables and construction trade payables incurred in the ordinary
course of business), (ii) the maximum amount available to be
drawn under all letters of credit issued for the account of such
Person and all unpaid drawings in respect of such letters of
credit, (iii) all Indebtedness of the types described in clause
(i), (ii), (iv), (v), (vi) or (vii) secured by any Lien on any
property owned by such Person, whether or not such Indebtedness
has been assumed by such Person, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to
pay a specified purchase price for goods or services, whether or
not delivered or accepted, I.E., take-or-pay and similar obliga-
tions, (vi) all Contingent Obligations of such Person and (vii)
all obligations under any Interest Rate Protection or Other
Hedging Agreement.
"Indemnitee" shall have the meaning provided in Section
13.01.
"Initial Public Offering" shall have the meaning provided
in Section 5.02.
"Initial Public Offering Documents" shall have the
meaning provided in Section 5.02.
"Initial Revolving Loan Eurodollar Loan Borrowing Date"
shall mean the first date occurring at least three Business Days
following the Restatement Effective Date on which a Borrowing of
Revolving Loans which constitute Eurodollar Loans occurs
(including as a result of a conversion on such date).
"Intellectual Property" shall have the meaning provided
in Section 7.20.
"Interest Determination Date" shall mean, with respect to
any Eurodollar Loan, the second Business Day prior to the
commencement of any Interest Period relating to such Eurodollar
Loan.
"Interest Period" shall have the meaning provided in
Section 1.09.
"Issuing Bank" shall mean (a) with respect to each
Existing Letter of Credit, the Issuing Bank set forth in Schedule
II for such Letter of Credit and (b) with respect to all other
Letters of Credit, (x) BTCo and (y) any other Bank with a
Revolving Loan Commitment, to the extent such Bank agrees in its
sole discretion (and the Company and the Agent consent), to
become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2.
"L/C Supportable Indebtedness" shall mean (i) obligations
of the Company incurred in the ordinary course of business with
respect to workers compensation, surety bonds and other similar
statutory obligations and (ii) such other obligations of the
Company as are reasonably acceptable to the Issuing Bank and the
Agent and otherwise permitted to exist pursuant to the terms of
this Agreement.
"Lease Agreement" shall mean the Lease Agreement, dated
as of December 29, 1995, between Richland County, South Carolina
and the Company.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under
leases or licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(c).
"Letter of Credit Outstandings" shall mean, at any time,
the sum of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning
provided in Section 2.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority or other security agreement of any
kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financ-
ing or similar statement or notice filed under the UCC or any
other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline
Loan.
"Mandatory Borrowings" shall have the meaning provided in
Section 1.01(C).
"Manufacturing Facilities" shall mean the Missouri
Facility and the South Carolina Facility.
"Margin Stock" shall mean "Margin Stock" under, and as
defined in, Regulation G or Regulation U.
"Material Adverse Effect" shall mean a material adverse
effect on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of
the Company or the Company and its Subsidiaries taken as a whole.
"Maximum Swingline Amount" shall mean $5,000,000.
"Missouri Facility" shall mean the facility (including
all property, fixtures, plant and equipment) of the Company
located on approximately 88 acres of land at 1000 Italian Way,
Excelsior Springs, Missouri and which is used by the Company for
the manufacture and distribution of pasta products. The Missouri
Facility includes, without limitation, the Company's executive
offices, durum wheat mill, pasta production facility and
warehouses and all land not yet used for production.
"MS Shareholders" shall mean The Morgan Stanley Leveraged
Equity Fund II, L.P., Morgan Stanley Capital Partners III, L.P.,
Morgan Stanley Capital Investors, L.P. and MSCP III 892
Investors, L.P., each a Delaware limited partnership.
"Net Cash Proceeds" shall mean with respect to any sale
or issuance of equity the cash proceeds thereof less registration
costs, underwriting discounts, commissions and other reasonable
costs associated therewith.
"Net Sale Proceeds" shall mean, from any sale of assets,
the gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received from such sale
of assets, net of (i) reasonable transaction costs, (ii) the
amount of such gross cash proceeds required to be used to repay
any Indebtedness which is secured by the respective assets which
were sold, and (iii) the estimated marginal increase in income
taxes which will be payable by the Company's consolidated group
with respect to the fiscal year in which the sale occurs as a
result of such sale.
"New Bank" shall mean each Bank on the Restatement
Effective Date which is not an Existing Bank and each of The
Prudential Insurance Company of America; Bank One, Wisconsin;
Caisse Nationale De Credit Agricole; Wachovia Bank, N.A.;
Merchantile Bank; Bank Polska Kasa Opieki S.A. -Pekao S.A. Group
New York Branch; Commerce Bank, N.A.; and UMB Bank, N.A.
"Note" shall mean each Revolving Note and the Swingline
Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent
located at 233 South Wacker Drive, Chicago, Illinois 60606,
Attention: John Moses, Managing Director or such other office as
the Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to the Agent
or any Bank pursuant to the terms of this Agreement or any other
Credit Document.
"Original Agent" shall mean BTCo as "Agent" under, and as
defined in, the Original Credit Agreement.
"Original Credit Agreement" shall mean the Credit
Agreement, dated as of October 30, 1992, among the Company, the
Banks party thereto and the Original Agent.
"Original Effective Date" shall mean the "Effective Date"
under, and as defined in, the Original Credit Agreement.
"Original Restatement Effective Date" shall mean the
"Restatement Effective Date" under, and as defined in, the
Existing Credit Agreement.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Agent
located at One Bankers Trust Plaza, New York, New York 10006, or
such other office as the Agent may hereafter designate in writing
as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corpor-
ation established pursuant to Section 4002 of ERISA or any suc-
cessor thereto.
"Permitted Filot Transaction" shall mean the sale and the
subsequent leaseback of the South Carolina Facility to and from
Richland County, South Carolina and of the equipment and
machinery used by the Company located thereon pursuant to, and in
accordance with the terms of, the Permitted Filot Transaction
Documents.
"Permitted Filot Transaction Documents" shall mean (i)
the Bill of Sale, dated as of December 29, 1995, between the
Company and Richland County, South Carolina, (ii) the Lease
Agreement and (iii) the Deed, dated as of December 29, 1995,
between Richland County, South Carolina and the Company.
"Permitted Liens" shall have the meaning provided in
Section 9.01.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enter-
prise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer
plan as defined in Section 4001 of ERISA and which is subject to
any of the requirements of Title IV of ERISA, which is maintained
or contributed to by (or to which there is an obligation to
contribute of), or at any time during the five calendar years
preceding the date of any Credit Event was maintained or contrib-
uted to by (or to which there was an obligation to contribute
of), the Company or any of its Subsidiaries or an ERISA
Affiliate.
"Prime Lending Rate" shall mean the rate which the Agent
announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate
changes. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to
any customer. The Agent may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Quarterly Payment Date" shall mean the last Business Day
of each February, May, August and November occurring after the
Restatement Effective Date.
"Quoted Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by
the Agent for U.S. dollar deposits of amounts in immediately
available funds comparable to the outstanding principal amount of
the Eurodollar Loan of the Agent for which an interest rate is
then being determined with maturities comparable to the Interest
Period to be applicable to such Eurodollar Loan as determined as
of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided
(and rounded off to the nearest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency funding or liabilities
as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"RCRA" shall mean the Resources Conservation and Recovery
Act, as the same may be amended from time to time, 42 U.S.C.
6901 ET SEQ.
"Real Property" of any Person shall mean all the right,
title and interest of such Person in and to land, improvements
and fixtures, including Leaseholds.
"Register" shall have the meaning provided in Section
8.12.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof establishing
reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or any portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or any portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or any portion thereof.
"Release" means disposing, discharging, injecting, spill-
ing, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, seeping, placing, pouring and the like, into or upon
any land or water or air, or otherwise entering into the
environment.
"Replaced Bank" shall have the meaning provided in
Section 1.12.
"Replacement Bank" shall have the meaning provided in
Section 1.12.
"Reportable Event" shall mean an event described in
Section 4043(c) of ERISA with respect to a Plan as to which the
thirty-day notice requirement has not been waived by the PBGC.
"Required Banks" shall mean Banks, the sum of whose
outstanding Revolving Loan Commitments (or if after the Total
Revolving Loan Commitment has terminated, the sum of outstanding
Revolving Loans and RL Percentages of outstanding Swingline Loans
and Letter of Credit Outstandings) represent an amount greater
than 50% of the sum of the Total Revolving Loan Commitment (or
after the termination thereof, the sum of the then total
outstanding Revolving Loans, Swingline Loans and Letter of Credit
Outstandings).
"Restatement Effective Date" shall have the meaning
provided in Section 13.10.
"Returns" shall have the meaning provided in Section
7.09.
"Revolving Loan Commitment" shall mean, with respect to
each Bank, the amount set forth opposite such Bank's name in
Schedule I hereto directly below the column entitled "Revolving
Loan Commitment," as the same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from
such Bank pursuant to Section 1.12 and/or 13.04.
"Revolving Loans" shall have the meaning provided in
Section 1.01.
"Revolving Note" shall have the meaning provided in
Section 1.05(b).
"RL Percentage" shall mean, for any Bank with a Revolving
Loan Commitment, at any time, a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which
is the Total Revolving Loan Commitment at such time, PROVIDED
that if the RL Percentage of any Bank is to be determined after
the Total Revolving Loan Commitment has been terminated, then the
RL Percentages of such Banks shall be determined immediately
prior (and without giving effect) to such terminations.
"Scheduled Commitment Reduction" shall have the meaning
provided in Section 3.03(d).
"Scheduled Commitment Reduction Date" shall have the
meaning provided in Section 3.03(d).
"SEC" shall have the meaning provided in Section 8.01(g).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Securities Act" shall mean the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
"Shareholders' Agreements" shall have the meaning
provided in Section 5.07.
"South Carolina Facility" shall mean the facility
(including all leaseholds, property, fixtures, plant and
equipment) of the Company located on approximately 60 acres of
land in Richland County, South Carolina and which is used by the
Company for the manufacture and distribution of pasta products.
"Standby Letter of Credit" shall have the meaning
provided in Section 2.01(a).
"Start Date" shall have the meaning provided in the
definition of "Applicable Margin".
"Stated Amount" of each Letter of Credit shall, at any
time, mean the maximum amount available to be drawn thereunder at
such time (in each case determined without regard to whether any
conditions to drawing could then be met).
"Stockholders Agreement" shall mean the Amended and
Restated Shareholders' Agreement dated as of October 6, 1997 by
and among the Company, MS Shareholders and each of the other
signatories listed on the signature pages thereof, as amended as
of October 14, 1997.
"Stock Option Plans" shall mean the Company's 1992 Non-
Statutory Stock Option Plan, the Company's 1993 Non-Qualified
Stock Option Plan, and the Company's 1997 Equity Incentive Plan.
"Subsidiary" shall mean, as to any Person, (i) any cor-
poration more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such
Person and/or one or more Subsidiaries of such Person and (ii)
any partnership, association, firm, joint venture or other entity
or enterprise in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest
at the time.
"Swingline Bank" shall mean Bankers Trust Company, in its
capacity as the lender of Swingline Loans.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Final Maturity Date.
"Swingline Loans" shall have the meaning provided in
Section 1.01(B).
"Swingline Note" shall have the meaning provided in
Section 1.05(a).
"Sysco" shall mean Sysco Corporation, a Delaware
corporation.
"Sysco Contract" shall mean the Supplier Agreement, dated
as of August 1, 1986, between the Company and Sysco as amended
and extended on or prior to the Original Effective Date.
"Tax Sharing Agreements" shall have the meaning provided
in Section 5.07.
"Taxes" shall have the meaning provided in Section 4.04.
"Test Period" shall mean for any determination under this
Agreement the four consecutive fiscal quarters of the Company
ended on the date of determination (or, if such date of
determination is not the last day of a fiscal quarter of the
Company, the four consecutive fiscal quarters of the Company last
ended prior to such date of determination), taken as one
accounting period; PROVIDED, however, that the Test Period for
(x) the fiscal quarter ending December 1997 shall be based on
such fiscal quarter, (y) the fiscal quarter ending March 1998
shall be based on the two consecutive fiscal quarters of the
Company last ended and (z) the fiscal quarter ending June 1998
shall be based on the three consecutive fiscal quarters of the
Company last ended.
"Total Commitment" shall mean, at any time, the sum of
the Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any
time, the sum of the Revolving Loan Commitments of each of the
Banks.
"Total Unutilized Revolving Loan Commitment" shall mean,
at any time, an amount equal to the remainder of (i) the then
Total Revolving Loan Commitment less (ii) the sum of the
aggregate principal amount of Revolving Loans and Swingline Loans
then outstanding at such time plus the Letter of Credit
Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided
in Section 2.01(a).
"Transaction" shall mean and include each of (i) the
Credit Events occurring on the Restatement Effective Date, (ii)
the making of the payments required by Section 5.03 (including,
without limitation, the repayment in full of each of the Existing
Loans and all accrued interest thereon on the Restatement
Effective Date), (iii) the Initial Public Offering, (iv) the
payment of the Transaction Fees and Expenses and (v) the
occurrence of the Restatement Effective Date.
"Transaction Fees and Expenses" shall mean all fees and
expenses incurred in connection with and arising out of the
Transaction.
"Type" shall mean the type of Loan determined with regard
to the interest option applicable thereto, I.E., whether a Base
Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time
to time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the
amount, if any, by which the actuarial present value of the
accumulated plan benefits under the Plan as of the close of its
most recent plan year, determined in accordance with Statement of
Executive Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section
412 of the Code.
"United States" and "U.S." shall each mean the United
States of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" with respect to
any Bank at any time shall mean such Bank's Revolving Loan
Commitment at such time less the sum of (i) the aggregate
outstanding principal amount of all Revolving Loans made by such
Bank and (ii) such Bank's RL Percentage of the Letter of Credit
Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean, as to any Person,
(i) any corporation 100% of whose capital stock (other than
director's qualifying shares) is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and
(ii) any partnership, association, joint venture or other entity
in which such Person and/or one or more Wholly-Owned Subsidiaries
of such Person has a 100% equity interest at such time.
Section 12. THE AGENT.
12.01 APPOINTMENT. The Banks hereby designate BTCo as
Agent to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Agent to take such action on its
behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may
perform any of its duties hereunder by or through its officers,
directors, agents, employees or affiliates.
12.02 NATURE OF DUTIES. The Agent shall have no duties
or responsibilities except those expressly set forth in this
Agreement. Neither the Agent nor any of its officers, directors,
agents, employees or affiliates shall be liable for any action
taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless
caused by the gross negligence or willful misconduct of the
Agent. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note;
and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as
to impose upon the Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set
forth herein or therein.
12.03 LACK OF RELIANCE ON THE AGENT. Independently and
without reliance upon the Agent, each Bank and the holder of each
Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the
financial condition and affairs of the Company and its Sub-
sidiaries in connection with the making and the continuance of
the Loans and the participation in Letters of Credit and the
taking or not taking of any action in connection herewith and
(ii) its own appraisal of the creditworthiness of the Company and
its Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank or the
holder of any Note with any credit or other information with
respect thereto, whether coming into its possession before the
making of the Loans or the participation in the Letters of Credit
or at any time or times thereafter. The Agent shall not be
responsible to any Bank or the holder of any Note for any
recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, col-
lectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of the Company
or its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Company or its Sub-
sidiaries or the existence or possible existence of any Default
or Event of Default.
12.04 CERTAIN RIGHTS OF THE AGENT. If the Agent shall
request instructions from the Required Banks with respect to any
act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Agent shall be
entitled to refrain from such act or taking such action unless
and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the
foregoing, no Bank and no holder of any Note shall have any right
of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting hereunder or under any other
Credit Document in accordance with the instructions of the
Required Banks.
12.05 RELIANCE. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or
facsimile message, cablegram, radiogram, order or other document
or telephone message signed, sent or made by any Person that the
Agent believed to be the proper Person, and, with respect to all
legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of
counsel selected by it.
12.06 INDEMNIFICATION. To the extent the Agent is not
reimbursed and indemnified by the Company the Banks will reim-
burse and indemnify the Agent, in proportion to their respective
"percentages" as used in determining the Required Banks for and
against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed
on, asserted against or incurred by the Agent in performing its
duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit
Document; PROVIDED that no Bank shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct.
12.07 THE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to make Loans under this Agreement and
to issue or participate in Letters of Credit, the Agent shall
have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not per-
forming the duties specified herein; and the term "Banks,"
"Required Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust
or other business with the Company or any Affiliate of the
Company as if it were not performing the duties specified herein,
and may accept fees and other consideration from the Company or
any Affiliate of the Company for services in connection with this
Agreement and otherwise without having to account for the same to
the Banks.
12.08 HOLDERS. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed
with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority
or consent, is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee, assignee or in-
dorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.
12.09 RESIGNATION BY THE AGENT. (a) The Agent may
resign from the performance of all its functions and duties here-
under and/or under the other Credit Documents at any time by
giving 15 Business Days' prior written notice to the Company and
the Banks. Such resignation shall take effect upon the appoint-
ment of a successor Agent pursuant to clauses (b) and (c) below
or as otherwise provided below.
(b) Upon any such notice of resignation of the Agent,
the Banks shall appoint a successor Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably
acceptable to the Company (it being understood and agreed that
any Bank is deemed to be acceptable to the Company).
(c) If a successor Agent shall not have been so
appointed within such 15 Business Day period, the Agent, with the
consent of the Company, shall then appoint a successor Agent who
shall serve as the Agent hereunder or thereunder until such time,
if any, as the Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the
date such notice of resignation was given by the Agent, the
Agent's resignation shall become effective and the Banks shall
thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the
Banks appoint a successor Agent as provided above.
12.10 DOCUMENTATION AGENT. The Documentation Agent,
in its capacity as such, shall not have any rights, duties or
responsibilities pursuant to this Agreement or any of the other
Credit Documents.
Section 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES; ETC. The Company shall:
(i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses
of the Agent (including, without limitation, the reasonable fees
and disbursements of White & Case and of any local counsel) in
connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Agent (in-
cluding, without limitation, the reasonable fees and disburse-
ments of White & Case) in connection with its syndication efforts
with respect to this Agreement and of the Agent and each of the
Banks in connection with the enforcement of this Agreement and
the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Agent
and for each of the Banks); (ii) pay and hold each of the Banks
harmless from and against any and all present and future stamp,
excise and other similar taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any
and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank)
to pay such taxes; and (iii) defend, protect, indemnify and hold
harmless the Agent, the Documentation Agent and each Bank, and
each of their respective officers, directors, employees,
affiliates, representatives and agents (each an "Indemnitee" and,
collectively called the "Indemnities") from and against any and
all liabilities, obligations (including removal, remedial or
corrective actions), losses, damages (including foreseeable and
unforeseeable consequential damages and punitive damages), penal-
ties, claims, actions, judgments, suits, costs, expenses and
disbursements incurred by, imposed on or assessed against any
Indemnitee directly or indirectly based on, as a result of, or
arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding or claim
(whether or not any Indemnitee is a party thereto) related to the
entering into and/or performance of this Agreement or any other
Document or the use of any Letter of Credit or the proceeds of
any Loan hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the
Transaction) or in any other Document or the exercise of any of
their rights or remedies provided herein or in the other
Documents, or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned or at any time
operated by the Company or any of its Subsidiaries, the genera-
tion, storage, transportation, handling or disposal by or on
behalf of the Company and its Subsidiaries of Hazardous Materials
at any location, whether or not owned or operated by the Company
or any of its Subsidiaries, the non-compliance of any Real
Property at any time owned or operated by the Company or any of
its Subsidiaries with federal, state and local laws, regulations,
and ordinances (including applicable permits thereunder) applica-
ble to such Real Property, or any Environmental Claim asserted
against the Company, any of its Subsidiaries or any Real Property
at any time owned or operated by the Company or any of its
Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation,
litigation or other proceeding or claim (whether or not any
Indemnitee is a party thereto) (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the
Person to be indemnified).
13.02 RIGHT OF SETOFF. In addition to any rights now
or hereafter granted under applicable law or otherwise, and not
by way of limitation of any such rights, upon the occurrence of
an Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or
other notice of any kind to the Company or any of its Sub-
sidiaries or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of each of the
Company and its Subsidiaries against and on account of the
Obligations and liabilities of such Person to such Bank under
this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations pur-
chased by such Bank pursuant to Section 13.06(b), and all other
claims of any nature or description arising out of or in connec-
tion with this Agreement or any other Credit Document, irre-
spective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
13.03 NOTICES. Except as otherwise expressly provided
herein, all notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex,
facsimile or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Company, at
its address specified opposite its signature below; if to any
Bank, at its address specified on Schedule XI attached hereto;
and if to the Agent, at its Notice Office; or, as to the Company
or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and,
as to each Bank, at such other address as shall be designated by
such Bank in a written notice to the Company and the Agent. All
such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be,
or sent by telex or telecopier, except that notices and
communications to the Agent shall not be effective until received
by the Agent.
13.04 BENEFIT OF AGREEMENT. (a) This Agreement shall
be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto;
PROVIDED, HOWEVER, the Company may not assign or transfer any of
its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of the Banks
and, PROVIDED FURTHER, that although any Bank may transfer,
assign or grant participations in its rights hereunder, such Bank
shall remain a "Bank" for all purposes hereunder (and may not
transfer or assign all or any portion of its Commitments
hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder and, PROVIDED FURTHER, that no
Bank shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final
maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Final Maturity Date)
in which such participant is participating, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount there-
of, or increase the amount of the participant's participation
over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory
Commitment reduction or of a mandatory prepayment shall not con-
stitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without the
consent of any participant if the participant's participation is
not increased as a result thereof) or (ii) consent to the assign-
ment or transfer by the Company of any of its rights and obliga-
tions under this Agreement. In the case of any such
participation, the participant shall not have any rights under
this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by
such Bank in favor of the participant relating thereto) and all
amounts payable by the Company hereunder shall be determined as
if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any
Bank together with one or more other Banks) may (x) assign all or
a portion of its Revolving Loan Commitment and related out-
standing Obligations (i) to one or more other Banks or to such
assigning Bank's parent company and/or any affiliate of such Bank
which is at least 50% owned by such Bank or its parent company or
(ii) in the case of any Bank that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed
by the same investment advisor of such Bank or by an Affiliate of
such investment advisor or (y) assign all or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the
assigning Bank of such Revolving Loan Commitment and related
outstanding Obligations to one or more Eligible Transferee or
Eligible Transferees (treating any fund that invests in bank
loans and any other fund that invests in bank loans and is
managed by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption
agreement substantially in the form of Exhibit I (appropriately
completed), PROVIDED that (i) at such time Schedule I shall be
deemed modified to reflect the Commitments (and/or outstanding
Loans, as the case may be) of such new Bank and of the existing
Banks, (ii) new Notes will be issued at the Company's expense to
such new Bank and to the assigning Bank upon the request of such
new Bank or assigning Bank, such new Notes to be in conformity
with the requirements of Section 1.05 to the extent needed to
reflect the revised Commitments (and/or outstanding Loans, as the
case may be), (iii) the consent of BTCo shall be required in con-
nection with any assignment, PROVIDED, HOWEVER consent of BTCo
shall not be required in the case of assignments between Banks,
so long as notice of any such assignment is delivered to BTCo,
(iv) the consent of the Company shall be required in connection
with any assignment of Commitments to an assignee pursuant to
clause (y) above (which consent shall not be unreasonably
withheld), (v) the consent of each Issuing Bank shall be required
in connection with any assignment of Revolving Loan Commitments,
PROVIDED, HOWEVER consent of each Issuing Bank shall not be
required in the case of assignments between Banks, so long as
notice of any such assignment is delivered to each Issuing Bank,
and (vi) the Agent shall receive at the time of each such
assignment, the payment of a non-refundable assignment fee of
$3,500 and, PROVIDED FURTHER, that such transfer or assignment
will not be effective until recorded by the Agent on the Register
pursuant to Section 8.14 hereof. To the extent of any assignment
pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to
this Section 13.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. federal
income tax purposes, the respective assignee shall provide to the
Company and the Agent, the appropriate Internal Revenue Service
Forms (and, if applicable, a Section 4.04(b)(ii) Certificate)
described in Section 4.04(b).
(c) Nothing in this Agreement shall prevent or
prohibit any Bank from pledging its Loans and Notes hereunder to
a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank and, with the consent of the
Agent, any Bank which is a fund may pledge all or any portion of
its Loans and Notes to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall
release the transferor Bank from any of its obligations
hereunder.
13.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Agent or any Bank or any holder of any
Note in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between
the Company and the Agent or any Bank or the holder of any Note
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and rem-
edies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or rem-
edies which the Agent or any Bank or the holder of any Note would
otherwise have. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or
demand in similar or other circumstances or constitute a waiver
of the rights of the Agent or any Bank or the holder of any Note
to any other or further action in any circumstances without
notice or demand.
13.06 PAYMENTS PRO RATA. (a) The Agent agrees that
promptly after its receipt of each payment from or on behalf of
the Company in respect of any Obligations hereunder, it shall
distribute such payment to the Banks (other than any Bank that
has consented in writing to waive its PRO RATA share of any such
payment) PRO RATA based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should
receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff
or banker's lien, by counterclaim or cross action, by the en-
forcement of any right under the Credit Documents, or otherwise),
which is applicable to the payment of the principal of, or
interest on, the Loans, Unpaid Drawings or regularly accruing
Fees, of a sum which with respect to the related sum or sums
received by other Banks is in a greater proportion than the total
of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of
the Company to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount;
PROVIDED that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such
recovery, but without interest.
13.07 CALCULATIONS; COMPUTATIONS. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be
made and prepared in accordance with generally accepted account-
ing principles in the United States consistently applied through-
out the periods involved (except, in the case of the generally
accepted accounting principles, as set forth in the notes thereto
or as otherwise disclosed in writing by the Company to the
Banks); PROVIDED that, except as otherwise specifically provided
herein, all computations of Excess Cash Flow and all computations
determining compliance with Section 9 shall utilize accounting
principles and policies in conformity with those used to prepare
the historical financial statements for the fiscal year ended
September 30, 1996 delivered to the Banks pursuant to Section
7.05(a). References to a fiscal quarter ending in March, June,
September or December or a fiscal year ending in September shall
as appropriate be deemed to refer to the fiscal quarter and/or
fiscal year, as applicable, ending in the first week of the next
succeeding April, July, October or January if there is no fiscal
quarter and/or fiscal year, as applicable, ending in the
specified month.
(b) All computations of interest and Fees hereunder
shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or Fees are
payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, INC. WITH OFFICES ON
THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AS
ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWL-
EDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.
IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE
TO BE AVAILABLE TO ACT AS SUCH, THE COMPANY AGREES TO DESIGNATE A
NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS
AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT
UNDER THIS AGREEMENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY,
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PRO-
CEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
(B) THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJEC-
TION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN THE COURTS IN NEW YORK REFERRED TO IN CLAUSE (A) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRRE-
VOCABLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY
COURT OR JURISDICTION, INCLUDING WITHOUT LIMITATION THOSE REFER-
RED TO IN CLAUSE (A) ABOVE, IN RESPECT OF ANY MATTER ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the
Company and the Agent.
13.10 EFFECTIVENESS. This Agreement shall become ef-
fective on the date (the "Restatement Effective Date") on which
(i) each of the Company, the Required Banks (as defined in the
Existing Credit Agreement and determined immediately before the
occurrence of the Restatement Effective Date) and each New Bank
shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Agent at its
Notice Office or, in the case of the Required Banks and each New
Bank, shall have given to the Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it and (ii)
the conditions contained in Sections 5 and 6 are met to the
satisfaction of the Agent and the Required Banks (determined
immediately after giving effect to the Restatement Effective
Date). Unless the Agent has received actual notice from any Bank
that the conditions described in clause (ii) of the preceding
sentence have not been met to its satisfaction, upon the
satisfaction of the condition described in clause (i) of the
immediately preceding sentence and upon the Agent's determination
that the conditions described in clause (ii) of the immediately
preceding sentence have been met and upon the payment of all
amounts required to be paid on the Restatement Effective Date
pursuant to Section 5.03, then the Restatement Effective Date
shall be deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto have not
been met (although the occurrence of the Restatement Effective
Date shall not release the Company from any liability for failure
to satisfy one or more of the applicable conditions contained in
Section 5 or 6).
13.11 HEADINGS DESCRIPTIVE. The headings of the
several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
13.12 AMENDMENT OR WAIVER. (a) Neither this Agree-
ment nor any other Credit Document nor any terms hereof or
thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing
signed by the Company and the Required Banks, PROVIDED that no
such change, waiver, discharge or termination shall, without the
consent of each Bank (with Obligations being directly affected in
the case of following clause (i)): (i) extend the final
scheduled maturity of any Loan or Note or any portion thereof or
extend the stated maturity of any Letter of Credit beyond the
Final Maturity Date, or reduce the rate or extend the time of
payment of interest or Fees thereon, or reduce the principal
amount thereof (except to the extent repaid in cash), (ii) amend,
modify or waive any provision of this Section 13.12, (iii) reduce
the percentage specified in the definition of Required Banks (it
being understood that, with the consent of the Required Banks,
additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on
substantially the same basis as the extensions of the Revolving
Loan Commitments are included on the Restatement Effective Date)
or (iv) consent to the assignment or transfer by the Company of
any of its rights and obligations under this Agreement; PROVIDED
FURTHER, that no such change, waiver, discharge or termination
shall (I) increase the Commitments of any Bank over the amount
thereof then in effect (it being understood that waivers or
modifications of conditions precedent, covenants, any Default or
Event of Default or of a mandatory Commitment reduction to the
Total Commitment or of a mandatory prepayment shall not consti-
tute an increase of the Commitment of any Bank, and that an
increase in the available portion of any Commitment of any Bank
shall not constitute an increase in the Commitment of such Bank),
without the consent of such Bank, (II) without the consent of
each Issuing Bank affected thereby, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with
respect to Letters of Credit, (III) without the consent of the
Swingline Bank, amend, modify or waive any provision relating to
the rights or obligations of the Swingline Bank or with respect
to the Swingline Loans (including, without limitation, the
obligations of the other Banks with Revolving Loan Commitments to
fund Mandatory Borrowings), or (IV) without the consent of the
Agent, amend, modify or waive any provision of Section 12 or any
other provision relating to the rights or obligations of the
Agent; PROVIDED, HOWEVER, that in any case the Required Banks may
waive, in whole or in part, any such prepayment, repayment or
commitment reduction, so long as the application, of any such
prepayment, repayment or commitment reduction which is still
required to be made is not altered.
(b) If, in connection with any proposed change,
waiver, discharge or termination to any of the provisions of this
Agreement as contemplated by clauses (i) through (iv), inclusive,
of the first proviso to Section 13.12(a), the consent of the
Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained, then the
Company shall have the right, so long as all non-consenting Banks
whose individual consent is required are treated as described in
either clauses (A) or (B) below, to either (A) replace each such
non-consenting Bank or Banks with one or more Replacement Banks
pursuant to Section 1.12 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination or (B) terminate such
non-consenting Bank's Revolving Loan Commitment and repay in full
its outstanding Loans, in accordance with Sections 3.02(b) and/or
4.01(b), PROVIDED that, unless the Commitments that are
terminated, and Loans that are repaid, pursuant to the preceding
clause (B) are immediately replaced in full at such time through
the addition of new Banks or the increase of the Commitments
and/or outstanding Loans of existing Banks (who in each case must
specifically consent thereto), then in the case of any action
pursuant to preceding clause (B) the Required Banks (determined
before giving effect to the proposed action) shall specifically
consent thereto and, PROVIDED FURTHER, that in any event the
Company shall not have the right to replace a Bank, terminate its
Revolving Loan Commitment or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to
Section 13.12(a).
13.13 SIRVOVAL. All indemnities set forth herein
including, without limitation, in Sections 1.10, 1.11, 2.06,
4.04, 12.06 and 13.01 shall survive the execution, delivery and
termination of this Agreement and the Notes and the making and
repayment of the Loans.
13.14 DOMICILE OF LOANS. Each Bank may transfer and
carry its Loans at, to or for the account of any office,
Subsidiary or Affiliate of such Bank.
13.15 CONFIDENTIALITY. Each Bank agrees that it will
use its reasonable best efforts not to disclose without the prior
consent of the Company (other than to its employees, auditors or
counsel or to another Bank if the Bank or such Bank's holding or
parent company in its sole discretion determines that any such
party should have access to such information) any information
with respect to the Company or any of its Subsidiaries which is
furnished pursuant to this Agreement and which is designated by
the Company to the Banks in writing as confidential, PROVIDED
that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to
any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Bank or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation, or
the National Association of Insurance Commissioners or similar
organizations (whether in the United States or elsewhere) or
their successors, (c) as may be required or appropriate in
response to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank and (e) to any
prospective or actual transferee or participant in connection
with any contemplated transfer or participation of any of any of
the Notes or Commitments or any interest therein by such Bank,
PROVIDED that such prospective transferee agrees to maintain the
confidentiality contained in this Section.
13.16 ADDITION OF NEW BANKS; ORIGINAL NOTES. (a) On
and as of the occurrence of the Restatement Effective Date, in
accordance with Section 13.10 hereof, each New Bank shall become
a "Bank" under, and for all purposes of, this Agreement and the
other Credit Documents.
(b) On the Restatement Effective Date, immediately
after giving effect thereto, all outstanding Revolving Notes (as
defined in the Existing Credit Agreement) issued by the Company
to the Existing Banks under the Existing Credit Agreement shall
be deemed cancelled.
IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this
Agreement as of the date first above written.
1000 Italian Way AMERICAN ITALIAN PASTA
Excelsior Springs, Missouri 64024 COMPANY
Telephone No.: (816) 630-6400
Telecopier No.: (816) 630-6416 By /S/ DAVID WATSON
____________________
Attention: David Watson Name: David Watson
Executive Vice President Title:Executive Vice
and Chief Financial Officer President
and Chief Financial Officer Chief Financial Officer
BANKERS TRUST COMPANY,
Individually, as Arranger
and as Agent
By /S/ ROBERT R. TELESCA
__________________________
Name:Robert R. Telesca
Title:Assistant Vice
President
BANKS: BANK OF SCOTLAND
By /S/ ANNIE CHIN TAT
_____________________________
Name:Annie Chin Tat
Title:Vice President
BANKS: NATIONSBANK, N.A.
By /S/ STEVEN W. GILES
___________________________
Name:Steven W. Giles
Title:Assistant Vice
President
BANKS: BANK ONE, WISCONSIN
By /S/ PAUL C. FUERST
___________________________
Name:Paul C. Fuerst
Title:Senior Vice
President
BANKS: THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /S/ JAY D. SQUIERS
___________________________
Name:Jay D. Squiers
Title:Vice President
BANKS: COMMERCE BANK, N.A.
By /S/ JEFFREY D. FARRELL
___________________________
Name:Jeffrey D. Farrell
Title:Vice President
BANKS: BANK POLSKA KASA OPIEKI S.A. -
PEKAO S.A. GROUP
NEW YORK BRANCH
By /S/ WILLIAM A. SHEA
___________________________
Name:William A. Shea
Title:Vice President
BANKS: MERCANTILE BANK
By /S/ G. BRIAN HOBAN
___________________________
Name:G. Brian Hoban
Title:Corporate Banking
Officer
BANKS: UMB BANK, N.A.
By /S/ DAVID A. PROFFITT
___________________________
Name:David A. Proffitt
Title:Senior Vice
President
BANKS: CAISSE NATIONALE DE
CREDIT AGRICOLE
By /S/ DEAN BALICE
___________________________
Name:Dean Balice
Title:Senior Vice
President
Branch Manager
BANKS: WACHOVIA BANK, N.A.
By /S/ MARK L. THOMAS
___________________________
Name:Mark L. Thomas
Title:Vice President
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
COMMITMENTS
BANK REVOLVING LOAN COMMITMENT
____ _________________________
<S> <C>
Bankers Trust Company $20,000,000
Bank of Scotland 20,000,000
NationsBank, N.A. 20,000,000
The Prudential Insurance
Company of America 20,000,000
Bank One, Wisconsin 20,000,000
Caisse Nationale De
Credit Agricole 10,000,000
Wachovia Bank, N.A. 10,000,000
Mercantile Bank 10,000,000
Bank Polska Kasa Opieki
S.A. - Pekao S.A.
Group New York Branch 7,500,000
Commerce Bank, N.A. 7,500,000
UMB Bank, N.A. 5,000,000
TOTAL $150,000,000
<PAGE>
SCHEDULE II
EXISTING STANDBY LETTERS OF CREDIT
<PAGE>
SCHEDULE III
REAL PROPERTY
<PAGE>
SCHEDULE IV
MATERIAL LIABILITIES
<PAGE>
SCHEDULE V
PROPERTIES
<PAGE>
SCHEDULE VI
ENVIRONMENTAL MATTERS
<PAGE>
SCHEDULE VII
INTELLECTUAL PROPERTY RIGHTS
<PAGE>
SCHEDULE VIII
EXISTING OBLIGATIONS
<PAGE>
SCHEDULE IX
INSURANCE
<PAGE>
SCHEDULE X
EXISTING LIENS
<PAGE>
SCHEDULE XI
BANK ADDRESSES
Bankers Trust Company Bank of Scotland
One Bankers Trust Plaza 565 Fifth Avenue
New York, NY 10006 New York, NY 10017
Attention: Jim Cullen Attention: Annie Chin Tat
Tel: (212) 250-7343 Tel:(212) 450-0871
Fax: (212) 250-7351 Fax:(212) 557-9460
with a copy to: with a copy to:
Bankers Trust Company Bank of Scotland
c/o BT Alex. Brown Incorporated 181 West Madison Street
233 South Wacker Drive Suite 3525
Suite 8400 Chicago, IL 60602-4507
Chicago, IL 60606 Attention: Jim Halley
Attention: Marla Heller Tel:(312) 263-4054
Tel: (312) 993-8116 Fax:(312) 263-1143
Fax: (312) 993-8218
NationsBank, N.A. UMB Bank, N.A.
10th and Baltimore Street 1010 Grand Avenue
Kansas City, MO 64183 Kansas City, MO 64106
Attention: Steven Giles Attention: David Proffitt
Tel: (816) 979-7229 Tel:(816) 860-7935
Fax: (816) 979-7561 Fax:(816) 860-7143
Bank One, Wisconsin Bank Polska Kasa Opieki S.A. -
111 E. Wisconsin Avenue Pekao S.A. Group
3rd Floor New York Branch
Milwaukee, WI 53202 470 Park Avenue South
Attention: Cindy Wazrunek 15th Floor
Tel: (414) 765-2109 New York, NY 10016
Fax: (414) 765-2176 Attention: Bill Shea
Tel:(212) 251-1203
Fax:(212) 679-5910
Commerce Bank, N.A. Caisse National De Credit Agricole
1100 Walnut Street - 17th Floor 55 East Monroe - Suite 4700
Kansas City, MO 64106 Chicago, IL 60603
Attention: Jeff Farrell Attention: Robert Hughes
Tel: (816) 234-2412 Tel:(312) 917-7442
Fax: (816) 234-7290 Fax:(312) 372-3455
Mercantile Bank The Prudential Insurance
1101 Walnut Street - 7th Floor Company of America
Kansas City, MO 64106 Texas Commerce Tower
Attention: Bruce Riedman 2200 Ross Avenue - Suite 4200E
Tel: (816) 871-2281 Dallas, TX 75201
Fax: (816) 871-2226 Attention: Jay Squiers
Tel:(214) 720-6224
Fax:(214) 720-6299
Wachovia Bank, N.A.
191 Peachtree Street
Atlanta, GA 30303
Attention: Mark Thomas
Tel: (404) 332-6450
Fax: (404) 332-6898
<PAGE>
EXHIBIT A
---------
FORM OF NOTICE OF BORROWING [DATE]
---------------------------
Bankers Trust Company, as
Agent for the Banks party
to the Credit Agreement
referred to below
130 Liberty Street, 14th Floor
New York, New York 10006
Attention:
Gentlemen:
The undersigned, American Italian Pasta Company (the
"Company"), refers to the Credit Agreement, dated as of October
30, 1992, amended and restated as of July 1, 1994, further
amended and restated as of February 26, 1996 and further amended
and restated as of April 11, 1997 and further amended and
restated as of October 17, 1997 (as amended from time to time,
the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the Company, various Banks from
time to time party thereto, you, as Arranger and Agent (the
"Agent") for such Banks, and hereby gives you notice,
irrevocably, pursuant to Section 1.03 of the Credit Agreement,
that the undersigned hereby requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_________, [199_] [200_].1/
(ii) The aggregate principal amount of the Proposed
Borrowing is $___________.
(iii) The Proposed Borrowing is to consist of Revolving
Loans.
------------------------
1/ Shall be a Business Day, at least one Business Day after the
date hereof, in the case of Base Rate Loans, and three Business
Days after the date hereof, in the case of Eurodollar Loans.
(iv) The Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans]
[Eurodollar Loans].
[(v) The initial Interest Period for the Proposed
Borrowing is [one month] [two months] [three months] [six
months] [, subject to approval by each Bank with Commitments
and/or Loans, twelve months, and if such interest period is
unavailable [___] month[s]2/.]3/
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in
the Credit Agreement and the other Credit Documents are and
will be true and correct in all material respects, before
and after giving effect to the Proposed Borrowing and to the
application of the proceeds thereof, as though made on such
date, PROVIDED that any representation or warranty which by
its terms is made as of a specified date is true and correct
on the date of the Proposed Borrowing but only as of such
specified date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or
from the application of the proceeds thereof.
Very truly yours,
AMERICAN ITALIAN PASTA COMPANY
By____________________________
Name:
Title:
--------------------------------
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
3/ To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE>
EXHIBIT B-1
-----------
FORM OF REVOLVING NOTE
----------------------
$________________ New York, New York
_________ __, 1997
FOR VALUE RECEIVED, AMERICAN ITALIAN PASTA COMPANY, a
Delaware corporation (the "Borrower"), hereby promises to pay to
the order of _________________________ (the "Bank"), in lawful
money of the United States of America in immediately available
funds, at the office of Bankers Trust Company (the "Agent")
located at One Bankers Trust Plaza, New York, New York 10006 on
the Final Maturity Date (as defined in the Agreement referred to
below) the principal sum of _______________ DOLLARS
($___________) or, if less, the then unpaid principal amount of
all Revolving Loans (as defined in the Agreement) made by the
Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the
unpaid principal amount hereof in like money at said office from
the date hereof until paid at the rates and at the times provided
in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in
the Credit Agreement, dated as of October 30, 1992, amended and
restated as of July 1, 1994, further amended and restated as of
February 26, 1996, further amended and restated as of April 11,
1997 and further amended and restated as of October 17, 1997,
among the Borrower, various financial institutions from time to
time party thereto (including the Bank), Bankers Trust Company,
as Arranger and Agent (as amended, modified or supplemented to
the date hereof and as further amended, modified or supplemented
from time to time, the "Agreement"), and is entitled to the
benefits thereof. As provided in the Agreement, this Note is
subject to voluntary prepayment and mandatory repayment prior to
the Final Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agree-
ment) shall occur and be continuing, the principal of and accrued
interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
AMERICAN ITALIAN PASTA COMPANY
By_____________________________
Name:
Title:
<PAGE>
EXHIBIT B-2
-----------
SWINGLINE NOTE
$5,000,000 New York, New York
October __, 1997
FOR VALUE RECEIVED, AMERICAN ITALIAN PASTA COMPANY, a
Delaware corporation (the "Borrower"), hereby promises to pay to
the order of BANKERS TRUST COMPANY (the "Bank"), in lawful money
of the United States of America in immediately available funds,
at the office of Bankers Trust Company (the "Agent") located at
130 Liberty Street, New York, New York 10006, on the Swingline
Expiry Date (as defined in the Agreement referred to below) the
principal sum of FIVE MILLION DOLLARS ($5,000,000) or, if less,
the then unpaid principal amount of all Swingline Loans (as
defined in the Agreement referred to below) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the
unpaid principal amount hereof in like money at said office from
the date hereof until paid at the rates and at the times provided
in Section 1.08 of the Agreement referred to below.
This Note is the Swingline Note referred to in the
Credit Agreement, dated as of October 17, 1997, among the
Borrower, the financial institutions from time to time party
thereto (including the Bank) and the Agent (as from time to time
in effect, the "Agreement") and is entitled to the benefits
thereof. As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the
Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the
Agreement) shall occur and be continuing, the principal of and
accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
AMERICAN ITALIAN PASTA COMPANY
By_____________________________
Name:
Title:
<PAGE>
EXHIBIT C
---------
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
No. ______1/ Dated______________2/
Bankers Trust Company, as Agent under the Credit Agreement
(the "Credit Agreement"), dated as of October 30, 1992,
amended and restated as of July 1, 1994, further amended and
restated as of February 26, 1996, further amended and
restated as of April 11, 1997 and further amended and
restated as of October 17, 1997, among American Italian
Pasta Company, various financial institutions from time to
time party thereto, Bankers Trust Company, as Arranger and
Agent (the "Agent").
130 Liberty Street
New York, New York 10006
[NAME AND ADDRESS OF PROPOSED
ISSUING BANK]3/
Dear Sirs:
Pursuant to Section 2.03 of the Credit Agreement, we
hereby request that [NAME OF PROPOSED ISSUING BANK], in its
individual capacity, issue a [Trade] [Standby] Letter of Credit
for the account of the undersigned on ______________4/ (the "Date
of Issuance") in the aggregate stated amount of
_________________________.5/
--------------------------
1/ Insert Letter of Credit Request Number.
2/ Insert date of Letter of Credit Request.
3/ Insert either (x) BTCo or (y) any other Bank to the extent
such Bank agrees (and the Company and the Administrative Agent
consent) to become an Issuing Bank.
4/ Insert Date of Issuance which shall be (x) a Business Day and
(y) at least ten Business Days (or such shorter period as is
acceptable to the Issuing Bank) from the date hereof.
5/ Insert aggregate initial stated amount of Letter of Credit
which shall be not less than $100,000 or such lesser amount as is
acceptable to the Issuing Bank.
For purposes of this letter of credit request, unless
otherwise defined herein, all capitalized terms used herein which
are defined in the Credit Agreement shall have the respective
meaning provided therein.
The beneficiary of the requested Letter of Credit will
be __________,6/ and such Letter of Credit will be in support of
____________________7/ and will have a stated expiration date of
__________________.8/
We hereby certify that:
(1) The representations and warranties contained in
the Credit Agreement and the other Credit Documents will be
true and correct in all material respects, before and after
giving effect to the issuance of the Letter of Credit
requested hereby, on the Date of Issuance, PROVIDED that any
representation or warranty which by its terms is made as of
a specified date is true and correct on the Date of Issuance
but only as of such specified date.
(2) No Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the
Letter of Credit requested hereby, would such a Default or
Event of Default occur.
Copies of all material documentation with respect to
the supported transaction for which a Letter of Credit is
requested are attached hereto.
AMERICAN ITALIAN PASTA COMPANY
By_____________________________
Name:
Title:
_________________________________
6/ Insert name and address of beneficiary.
7/ Insert description of L/C Supportable Indebtedness and
describe obligation to which it relates in the case of Standby
Letters of Credit and insert a description of the trade
obligation which is being supported in the case of Trade Letters
of Credit.
8/ Insert last date upon which drafts may be presented which,
may not be later than (i) in the case of Standby Letters of
Credit, the earlier of (x) 12 months after the Date of Issuance
and (y) 5 Business Days prior to the Final Maturity Date, and
(ii) in the case of Trade Letters of Credit, the earlier of (x)
24 months after the Date of Issuance and (y) 5 Business Days
prior to the the Final Maturity Date.
<PAGE>
EXHIBIT D
---------
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
---------------------------------------
Reference is hereby made to the Credit Agreement, dated
as of October 30, 1992, amended and restated as of July 1, 1994,
further amended and restated as of February 26, 1996, further
amended and restated as of April 11, 1997, among American Italian
Pasta Company, various Banks, Bankers Trust Company, as Arranger
and Agent (the "Credit Agreement"). Pursuant to the provisions
of Section 4.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF BANK]
Date: ______________________ By_______________________
Name:
Title:
<PAGE>
EXHIBIT E
---------
OPINION OF SONNENSCHEIN NATH & ROSENTHAL
----------------------------------------
<PAGE>
EXHIBIT F
---------
FORM OF OFFICERS' CERTIFICATE
-----------------------------
I, the undersigned, [President/Vice President] of
AMERICAN ITALIAN PASTA COMPANY, a corporation organized and
existing under the laws of the State of Delaware (the "Company"),
do hereby certify that:
1. This Certificate is furnished pursuant to the
Credit Agreement, dated as of October 30, 1992, amended and
restated as of July 1, 1994, further amended and restated as of
February 26, 1996, further amended and restated as of April 11,
1997 and further amended and restated as of October 17, 1997,
among the Company, various financial institutions from time to
time party thereto, Bankers Trust Company, as Arranger and Agent
(the "Agent") (such Credit Agreement, as in effect on the date of
this Certificate, being herein called the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following named individuals are elected offi-
cers of the Company, each holds the office of the Company set
forth opposite his name and has held such office since
__________, 19__.1/ The signature written opposite the name and
title of each such officer is his correct signature.
Name2/ Office Signature
_______________ _____________ _____________
_______________ _____________ _____________
_______________ _____________ _____________
_______________ _____________ _____________
--------------------------------
1/ Insert a date prior to the time of any corporate action
relating to the Credit Agreement or any other Credit Document.
2/ Include name, office and signature of each officer who will
sign any Credit Document, including the officer who will sign the
certification at the end of this Certificate.
3. Attached hereto as Exhibit A is a certified copy of
the Amended and Restated Certificate of Incorporation of the
Company as filed in the Office of the Secretary of State of the
State of Delaware on ________________, together with all amend-
ments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct
copy of the Amended and Restated By-Laws of the Company which
were duly adopted and are in full force and effect on the date
hereof.
5. Attached hereto as Exhibit C is a true and correct
copy of resolutions which were duly adopted on __________, 1997
[by unanimous written consent of the Board of Directors of the
Company] [by a meeting of the Board of Directors of the Company
at which a quorum was present and acting throughout], and said
resolutions have not been rescinded, amended or modified. Except
as attached hereto as Exhibit C, no resolutions have been adopted
by the Board of Directors of the Company which deal with the
execution, delivery or performance of the Credit Agreement or any
other documentation related thereto to which the Company is
party.
[6. Attached hereto as Exhibit D are true and correct
copies of all Employee Benefit Plans (other than Stock Option
Plans) of the Company.
7. Attached hereto as Exhibit E are true and correct
copies of all Shareholders' Agreements of the Company.
8. Attached hereto as Exhibit F are true and correct
copies of all Collective Bargaining Agreements of the Company.
9. Attached hereto as Exhibit G are true and correct
copies of all Tax Sharing Agreements entered into by the Company.
10. Attached hereto as Exhibit H are true and correct
copies of all Debt Agreements of the Company.]
11. Attached hereto as Exhibit I is a true and correct
copy of the CPC Contract.]3/
-----------------------------
3/ Only those Employee Benefit Plans (other than Stock Option
Plans), Shareholders' Agreements, Collective Bargaining
Agreements, Tax Sharing Agreements and Debt Agreements which were
not in existence on the Original Effective Date, or if in
existence on the Original Effective Date, which have been changed
in a material respect since such date, shall be required to be
delivered.
12. Attached hereto as Exhibit J is a true and correct
copy of all Initial Public Offering Documents of the Company.
13. As of the date hereof, all proceeds of the Initial
Public Offering have been used to make payments owing in
connection with the Transaction as set forth in Exhibit K hereto.
14. On the date hereof, all of the conditions in
Sections 5.02, 5.03, 5.08, 5.09, 5.13, 5.14, 6.01, 6.03 and 6.04
have been satisfied, PROVIDED that no certification is made as to
the acceptability of any items to the Agent and/or the Required
Banks or as to whether the Agent and/or the Required Banks are
satisfied with any of the matters described in said Sections.
15. On the date hereof, the representations and war-
ranties contained in the Credit Agreement and in the other Credit
Documents are true and correct in all material respects, both
before and after giving effect to each Credit Event to occur on
the date hereof and the application of the proceeds thereof,
PROVIDED that any representation or warranty which by its terms
is made as of a specified date is true and correct as of the date
hereof but only as of such specified date.
16. On the date hereof, no Default or Event of Default
has occurred and is continuing or would result from the amendment
and restatement of the Credit Agreement or from the Credit Events
to occur on the date hereof or from the application of the
proceeds thereof.
17. There is no proceeding for the dissolution or
liquidation of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this
____ day of October, 1997.
By______________________________
Name:
Title:
I, the undersigned, [Secretary] [Assistant Secretary] of the
Company, do hereby certify that:
1. [NAME OF PERSON MAKING ABOVE CERTIFICATIONS] is the
duly elected and qualified [President/Vice President] of the
Company and the signature above is his genuine signature.
2. The certifications made by [NAME OF PERSON MAKING
ABOVE CERTIFICATIONS] in Items 2, 3, 4, 5 and 17 above are true
and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this
____ day of October, 1997.
By____________________________
Name:
Title:
<PAGE>
EXHIBIT G
---------
FORM OF CONSENT LETTER
----------------------
[LETTERHEAD OF CT CORPORATION SYSTEM]
[RESTATEMENT EFFECTIVE DATE]
To the Agent and the Banks
party to the Credit Agreement
referred to below:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of
October 30, 1992, amended and restated as of July 1, 1994,
further amended and restated as of February 26, 1996, further
amended and restated as of April 11, 1997 and further amended and
restated as of October 17, 1997, among American Italian Pasta
Company (the "Company"), the financial institutions from time to
time party thereto, Bankers Trust Company, as Arranger and Agent
(the "Agent"), (as such Credit Agreement may be modified, supple-
mented or amended from time to time, the "Credit Agreement").
The Company, pursuant to Section 13.08 of the Credit
Agreement, has irrevocably designated and appointed the under-
signed, CT Corporation Systems, Inc., with offices currently
located at 1633 Broadway, New York, New York 10019, as its
authorized designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices
and documents which may be served in any such legal action or
proceeding with respect to the Credit Agreement or any other
Credit Document (as defined in the Credit Agreement) in the
courts of the State of New York or of the United States of
America for the Southern District of New York.
The undersigned hereby informs you that it irrevocably
accepts such appointment as agent as set forth in Section 13.08
of the Credit Agreement and agrees with you that the undersigned
(i) shall inform the Agent promptly in writing of any change of
its address in New York City, (ii) shall perform its obligations
as such process agent in accordance with the provisions of
Section 13.08 of the Credit Agreement and (iii) shall forward
promptly to the Company any legal process received by the
undersigned in its capacity as process agent.
As process agent, the undersigned, and its successor or
successors, agree to discharge the above-mentioned obligations
and will not refuse fulfillment of such obligations under Section
13.08 of the Credit Agreement.
Very truly yours,
CT CORPORATION SYSTEMS, INC.
By____________________________
Name:
Title:
<PAGE>
EXHIBIT H
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
Date __________, ____
Reference is made to the Credit Agreement described in
Item 2 of Annex I hereto (as such Credit Agreement may hereafter
be amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"). Unless defined in Annex I hereto, terms
defined in the Credit Agreement are used herein as therein
defined. ___________ (the "Assignor") and __________ (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee without recourse and without representation or warranty
(other than as expressly provided herein), and the Assignee
hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the
Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 4 of Annex I hereto (the
"Assigned Share") of all of the outstanding rights and
obligations under the Credit Agreement relating to the Total
Revolving Loan Commitment and all rights and obligations relating
to the Revolving Loans, Swingline Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or the other Credit Documents or
any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no respons-
ibility with respect to the financial condition of the Company or
its Subsidiaries or the performance or observance by the Company
or any of its Subsidiaries of any of their obligations under the
Credit Agreement or the other Credit Documents to which they are
a party or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement and the other Credit Documents,
together with copies of the financial statements referred to
therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that
it will, independently and without reliance upon the Agent, the
Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Transferee under Section 13.04(b) of the Credit Agreement; (iv)
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement
and the other Credit Documents as are delegated to the Agent, by
the terms thereof, together with such powers as are reasonably
incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it
as a Bank[; and (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from
United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax
treaty]1/.
4. Following the execution of this Assignment and
Assumption Agreement by the Assignor and the Assignee, an
executed original hereof (together with all attachments) will be
delivered to the Agent. The effective date of this Assignment
and Assumption Agreement shall be the date of execution hereof by
the Assignor and the Assignee and the receipt of the consent of
BTCo, the Company and each Issuing Bank, in each case to the
extent required by Section 13.04(b) of the Credit Agreement and
receipt by the Agent of the assignment fee referred to in such
Section 13.04(b), unless otherwise specified in Item 5 of Annex I
hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original
hereof to the Agent, as of the Settlement Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Assumption Agreement, have the
rights and obligations of a Bank thereunder and under the other
Credit Documents and (ii) the Assignor shall,
------------------------------ 1/ Include if the Assignee is
organized under the laws of a jurisdiction outside of the United
States.
to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit
Documents, provided that all indemnities of the Company set forth
in the Credit Agreement (including, without limitation, in
Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06) and the other
Credit Documents shall survive as to the Assignor.
6. It is agreed that the Assignee shall be entitled to
(x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I; (y) all Commitment Commission (if
applicable) on the Assigned Share of the Total Revolving Loan
Commitment at the rate specified in Item 7 of Annex I hereto; and
(z) all Letter of Credit Fees on the Assignee's participation in
all Letters of Credit at the rate specified in Item 9 of Annex I
hereto, which, in each case, accrue on and after the Settlement
Date, such interest and, if applicable, Commitment Commission and
Letter of Credit Fees, to be paid by the Agent directly to the
Assignee. It is further agreed that all payments of principal
made on the Assigned Share of the Loans which occur on and after
the Settlement Date will be paid directly by the Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to
the Assignor an amount specified by the Assignor in writing which
represents the Assigned Share of the principal amount of the re-
spective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of
any closing costs, and which are being assigned hereunder. The
Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the
Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this
Assignment and Assumption Agreement, as of the date first above
written, such execution also being made on Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR],
of ____________, _____ as Assignor
By_____________________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By_____________________________
Name:
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY
By________________________
Name:
Title:
AMERICAN ITALIAN PASTA COMPANY
By________________________
Name:
Title:
[NAME OF ISSUING BANK
By________________________
Name:
Title: ]2/
-----------------------------
2/ Insert only if required by Section 13.04(b) of the Credit
Agreement.
<PAGE>
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: American Italian Pasta Company (the "Company")
2. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of October
30, 1992, amended and restated as of July 1, 1994, further
amended and restated as of February 26, 1996, further
amended and restated as of April 11, 1997 and further
amended and restated as of October 17, 1997, among the
Company, the Banks from time to time party thereto, Bankers
Trust Company, as Arranger and Agent.
3. Date of Assignment Agreement: _____________, _______.
4. Amounts (as of date of item #3 above):
Revolving Loan Commitment
-------------------------
a. Aggregate
Amount
for all
Banks $_____
b. Assigned
Share1/ ____%
c. Amount of
Assigned
Share $_____
5. Settlement Date: _____________, _______.
-------------------------
1/ Percentage taken to 12 decimal places.
6. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the
Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)2/
7. Commitment Commission: As set forth in Section 3.01(a) of
the Credit Agreement (unless
otherwise agreed to by the Assignor
and the Assignee)
8. Letter of Credit Fee As set forth in Section 3.01
(b) of the Credit Agreement
(unless otherwise agreed to by
the Assignor and the Assignee)
9. Notice:
ASSIGNOR:
___________________________________
___________________________________
___________________________________
___________________________________
Attention: _______________________
Telephone: _______________________
Telecopier: _______________________
Reference: _______________________
ASSIGNEE:
___________________________________
___________________________________
___________________________________
Attention: _______________________
Telephone: _______________________
Telecopier: _______________________
Reference: _______________________
---------------------------
2/ The Company and the Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section
1.08 of the Credit Agreement, with the Assignor and Assignee
effecting the agreed upon sharing of the interest through
payments by the Assignee to the Assignor.
Payment Instructions:
ASSIGNOR:
___________________________________
___________________________________
___________________________________
Attention: _______________________
Reference: _______________________
ASSIGNEE:
___________________________________
___________________________________
___________________________________
Attention: _______________________
Reference: _______________________
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By__________________________ By_____________________________
__________________________ _____________________________
(Print Name and Title) (Print Name and Title)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM Balance
Sheets at December 31, 1997; Statements
of Operations for the quarter ended
December 31, 1997; the Statements of
Cash Flows for the quarter ended
December 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS AND THE NOTES
THERETO
</LEGEND>
<MULTIPLIER> 1000
<CAPTION>
3-MOS
<S> <C>
<PERIOD-START> OCT-04-1997
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-02-1998
<PERIOD-END> JAN-02-1998
<CASH> 1687
<SECURITIES> 0
<RECEIVABLES> 12948
<ALLOWANCES> 149
<INVENTORY> 15282
<CURRENT-ASSETS> 32681
<PP&E> 131616
<DEPRECIATION> 31019
<TOTAL-ASSETS> 184933
<CURRENT-LIABILITIES> 18564
<BONDS> 35638
0
0
<COMMON> 16
<OTHER-SE> 130715
<TOTAL-LIABILITY-AND-EQUITY> 184933
<SALES> 35536
<TOTAL-REVENUES> 35536
<CGS> 26026
<TOTAL-COSTS> 29845
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 264
<INCOME-PRETAX> 5427
<INCOME-TAX> 2062
<INCOME-CONTINUING> 3365
<DISCONTINUED> 0
<EXTRAORDINARY> 2332
<CHANGES> 0
<NET-INCOME> 1033
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
