SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
( ) 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: 1-12766
Ralcorp Holdings, Inc.
(Exact name of registrant as specified in its charter)
Missouri 43-1664297
(State of Incorporation) (I.R.S. Employer
Identification No.)
800 Market Street, Suite 2900
St. Louis, MO 63101
(Address of principal (Zip Code)
executive offices)
(314) 877-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all 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 ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Outstanding Shares at
par value $.01 per share May 10, 1996
32,920,030
<TABLE>
<CAPTION>
RALCORP HOLDINGS, INC.
INDEX PAGE
PART I. FINANCIAL INFORMATION
<S> <C>
Consolidated Statement of Earnings 1
Condensed Consolidated Balance Sheet 2
Condensed Consolidated Statement of Cash Flows 3
Notes to Condensed Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
Other Information 10
Exhibits and Reports on Form 8-K 10
(i)
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<PAGE>
<TABLE>
RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------- ---------------
1996 1995 1996 1995
------------- ---------- -------- ------
<S> <C> <C> <C> <C>
Net Sales $ 277.4 $ 258.3 $ 572.7 $ 536.7
------- ------- ------- -------
Costs and Expenses
Cost of products sold 139.4 134.9 281.7 267.3
Selling, general and administrative 44.2 43.2 87.9 82.9
Advertising and promotion 53.7 37.1 131.1 108.3
Interest 6.4 7.0 13.4 14.2
Nonrecurring items (.9)
Other (income)/expense, net .2
------- ------- ------- -------
242.8 222.4 514.1 472.7
------- ------- ------- -------
Earnings before Income Taxes 34.6 35.9 58.6 64.0
Income Taxes 13.4 14.0 22.7 25.0
------- ------- ------- -------
Net Earnings $ 21.2 $ 21.9 $ 35.9 $ 39.0
======= ======= ======= =======
Earnings per Common Share $ .64 $ .65 $ 1.09 $ 1.16
======= ======= ======= =======
See Accompanying Notes to Condensed Financial Statements.
1
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<TABLE>
RALCORP HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(Condensed)
(Dollars in millions)
<CAPTION>
March 31, Sept. 30,
1996 1995
------------- -------------
ASSETS
<S> <C> <C>
Current Assets
Cash
Receivables, less allowance for doubtful
accounts of $1.7 and $.8, respectively $ 80.6 $ 86.3
Inventories -
Raw materials and supplies 30.6 33.4
Finished products 86.2 76.7
Prepaid expenses 10.7 11.1
------ ------
Total Current Assets 208.1 207.5
------ ------
Investments and Other Assets 86.9 91.6
------ ------
Property at Cost 697.1 669.3
Accumulated depreciation 268.6 252.2
------ ------
428.5 417.1
------ ------
Total $ 723.5 $ 716.2
====== ======
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Current maturities of long-term debt $ 1.8 $ 1.8
Accounts payabl e 46.4 69.4
Other current liabilities 50.4 33.4
___________ __________
Total Current Liabilities 98.6 104.6
----------- ----------
Long-Term Debt 373.9 395.4
---------- -----------
Deferred Income Taxes 20.0 20.2
----------- -------------
Other Liabilities 39.6 33.6
----------- -------------
Shareholders Equity
Common stock .3 .3
Capital in excess of par value 131.0 131.0
Retained earnings 82.5 46.6
Common stock in treasury, at cost (21.0) (13.8)
Unearned portion of restricted stock (1.4) (1.7)
----------- -------------
Total Shareholders Equity 191.4 162.4
------------- -------------
Total $ 723.5 $ 716.2
============ ============
See Accompanying Notes to Condensed Financial Statements.
2
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RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Condensed)
(Dollars in millions)
<CAPTION>
Six Months Ended
March 31,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
Cash Flow from Operations
Net earnings $ 35.9 $ 39.0
Non-cash items included in income 22.8 25.4
Changes in assets and liabilities used
in operations (6.4) (15.2)
Other, net 6.4 3.1
------------- -------------
Net cash flow from operations 58.7 52.3
------------- -------------
Cash Flow from Investing Activities
Property additions, net (28.5) (23.4)
Other, net (1.7) (.4)
------------- -------------
Net cash used by investing activities (30.2) (23.8)
------------- -------------
Cash Flow from Financing Activities
Net cash flow used by debt (21.5) (20.2)
Treasury stock purchases (7.0) (8.3)
------------- -------------
Net cash used by financing activities (28.5) (28.5)
------------- -------------
Net Increase in Cash and Cash Equivalents 0 0
Cash and Cash Equivalents, Beginning of Year
------------- -------------
Cash and Cash Equivalents, End of Period $ 0 $ 0
============= =============
See Accompanying Notes to Condensed Financial Statements.
3
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<PAGE>
RALCORP HOLDINGS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996
(Dollars in millions except per share data)
Note 1 - Presentation of Condensed Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and 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 only of normal recurring
adjustments considered necessary for a fair presentation, have been
included. Operating results for any quarter are not necessarily
indicative of the results for any other quarter or for the full year.
These statements should be read in connection with the financial
statements and notes included in the Company's Annual Report to
Shareholders for the year ended September 30, 1995.
Note 2 - Nonrecurring Items
During the quarter ended March 31, 1996, the Company recorded a pre-tax
gain of $.9 ($.6 after taxes) on the sale of its promotional
fulfillment and coupon management subsidiary, which is included on the
Consolidated Statement of Earnings as a nonrecurring item. On an
earnings per common share basis, this one-time gain had approximately a
$.02 per share effect.
For the six months ended March 31, 1996, the nonrecurring charge of
$.9 ($.6 after taxes) recorded in the quarter ended December 31,
1995 to cover expenses related to the elimination of approximately
100 jobs at the Company's manufacturing facility in Cedar Rapids, IA,
is offset by the aforementioned second quarter gain on sale of
the promotional fulfillment and coupon management subsidiary.
Note 3 - Earnings per Share
Earnings per common share for the quarter and six month periods ended
March 31, 1996 and 1995 are computed by using the average number of
shares of Ralcorp Common Stock outstanding for the periods then ended.
Earnings per common share is computed independently for all of the
periods presented, therefore, the sum of earnings per common share
amounts for the quarters may not total the year-to-date. The average
numbers of common shares used for all periods are as follows:
Quarter ended March 31, 1996........................33,015,000
Quarter ended March 31, 1995........................33,522,000
Six months ended March 31, 1996 ....................33,066,000
Six months ended March 31, 1995.....................33,687,000
Actual outstanding shares of Ralcorp Common Stock at March 31, 1996 were
32,984,000.
Note 4 - Other Current Liabilities consists of the following:
<TABLE>
<CAPTION>
Mar. 31, Sept. 30,
1996 1995
------------ ------------
<S> <C> <C>
Accrued advertising and promotion $ 16.1 $ 3.1
Property taxes 6.7 4.6
Other items 27.6 25.7
---------- ----------
$ 50.4 $ 33.4
========= ==========
</TABLE>
4
<PAGE>
Note 5 - Long-Term Debt
The Company continues to have available certain borrowings under a bank
credit agreement (the Agreement). Provisions of the Agreement require
that the Company maintains certain financial ratios and a minimum level
of shareholders' equity. There is $275 million available under the
Agreement, as amended in March 1996, all of which is placed in a
revolving credit facility with a maturity date of March 12, 2001.
At March 31, 1996 and September 30, 1995, long-term debt associated
with the Company's businesses consisted of the following:
<TABLE>
<CAPTION>
Mar. 31, Sept. 30,
1996 1995
--------- ---------
<S> <C> <C>
8.75% Notes due 2004 $ 150.0 $ 150.0
Bank Credit Agreement 195.6 217.1
10.85% and 11.15% Notes due
9/30/96, 9/30/97 and 9/30/98 4.5 4.5
Refunding Revenue Bonds Series 90
7.20%-7.875% due 9/1/06 and 9/1/08 20.4 20.4
Refunding Revenue Bonds Series 91
7.125% and 7.375% due 9/1/02 and 9/1/10 3.0 3.0
Other 2.2 2.2
--------- ---------
375.7 397.2
--------- ---------
Less current portion (1.8) (1.8)
_________ _________
$ 373.9 $ 395.4
========== =========
</TABLE>
5
<PAGE>
Ralcorp Holdings, Inc.
Management's Discussion and Analysis of Financial Condition
And Results of Operations
Highlights
For the quarter ended March 31, 1996, sales and net earnings, excluding a
one-time gain, were $277.4 million and $20.6 million compared to $258.3 million
and $21.9 million for the comparable prior year period. Earnings per share
excluding the gain were $.62 for the three months ended March 31, 1996 compared
to $.65 in the prior year quarter. During the current year quarter, the Company
recorded a one-time pre-tax gain of $.9 million ($.6 million after-tax or $.02
per share) on the sale of its promotional fulfillment and coupon management
subsidiary. The gain, which is included on the accompanying Consolidated
Statement of Earnings as a nonrecurring item, increased net earnings and
earnings per share for the second quarter of the current fiscal year to $21.2
million and $.64.
For the first six months of the current fiscal year, sales and net earnings
were $572.7 million and $35.9 million compared to sales and net earnings of
$536.7 million and $39.0 million, respectively, in the prior year period.
The nonrecurring charge of $.9 million ($.6 million after taxes) recorded in
the first quarter of the current fiscal year to cover expenses related
to the elimination of approximately 100 jobs at the Company's manufacturing
facility in Cedar Rapids, IA, is offset by the aforementioned gain on sale
recorded in this year's second quarter.
<TABLE>
<CAPTION>
Business Segment Information
Three Months Ended March 31,
Sales Operating Profit
---------------------- ------------------------
1996 1995 1996 1995
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Consumer Foods $ 200.9 $ 188.6 $ 3.8 * $ 14.5
Resort Operations 76.5 69.7 37.6 31.1
--------- ---------- ---------- ----------
Total $ 277.4 $ 258.3 $ 41.4 $ 45.6
======== ========= ========== ==========
</TABLE>
* Excludes $.9 million pre-tax gain on sale of promotional fulfillment and
coupon management subsidiary.
<TABLE>
<CAPTION>
Six Months Ended March 31,
Sales Operating Profit
------------------------- ------------------------
1996 1995 1996 1995
---------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Consumer Foods $ 468.8 $ 439.9 $ 37.0 $ 51.6
Resort Operations 103.9 96.8 38.2 31.0
----------- ---------- --------- ------------
Total $ 572.7 $ 536.7 $ 75.2 $ 82.6
=========== =========== ========= ============
</TABLE>
6
<PAGE>
Consumer Foods
Consumer Foods sales increased 6.5% or $12.3 million for the three months
ended March 31, 1996 over the comparable prior year period, on significant
improvements in branded snack volume, higher pricing in cereals and in baby
foods and volume increases in both baby foods and crackers and cookies. For the
quarter, the CHEX MIX snack product continued its strong performance of the last
year as overall volume for the Ralston Foods cereal and snacks subsidiary
improved 2.5% despite flat branded cereal volume and a 5.4% decline in private
label cereal volume compared to the year ago quarter. Branded cereal volume was
flat on a quarter-to-quarter basis as favorable mainline CHEX and the addition
of SPIDER-MAN volumes were offset by continued volume declines in fractional
share brands. Private label cereal volume was hurt in the quarter by deep
discount promotions by the large branded manufacturers.
Sales in the consumer foods segment for the six months ended march 31, 1996
improved to $468.8 Million or an increase of 6.6% Over a year ago. This
improvement can be attributed to higher branded snack volume, favorable cereal
and baby foods pricing and improved volume in children's and private label
cereals, baby foods and cookies and crackers. The volume improvement in
children's cereal is attributable to the new spider-man product, although at a
rate much below expectations for the product. For the year-to-date period, the
combined cereal and snacks volume rose 4.2% Over the prior year, primarily on
the strength of chex mix snacks and 4.1% Private label cereal volume growth,
partially offset by a slight decline in branded cereal volume.
Consumer Foods operating profit for the quarter ended March 31, 1996,
excluding the one-time gain on sale, declined $10.7 million due primarily to
lower results in cereals, partially offset by an improvement in the Beech-Nut
baby food and Bremner cracker and cookie operations. The key variable in the
significant decline in segment operating profit was the 5.4% private label
cereal volume drop compared to last year's second quarter, a result of
significant competitive pressures. Also negatively affecting operating profit
for the Ralston Foods cereals and snacks subsidiary was a significant increase
in advertising and promotion expense. The majority of the increase in
advertising and promotion expense in the quarter can be attributed to
promotional spending on the new SPIDER-MAN brand cereal, higher reserves to
cover the value of in-ad trade coupon promotions offered during the quarter and
higher support levels for CHEX MIX brand snacks. The Beech-Nut baby food
business improved on strong gains in volume and favorable pricing, while Bremner
operating profit grew on volume gains and continued improvements in operating
efficiency.
For the six months, Consumer Foods operating profit fell $14.6 million from
year ago levels to $37.0 million, on lower cereal results partially offset by
improvements in baby food and crackers and cookies. Operating profit for Ralston
Foods declined on higher advertising and promotion expense, the continued
increase in ingredient costs and higher information systems costs, partially
offset by the strong performance of CHEX MIX snacks, favorable cereal prices and
improved private label cereal volume. SPIDER-MAN cereal, introduced in last
fiscal year's fourth quarter continues to be an earnings disappointment, as
volumes are far below expectations. Beech-Nut and Bremner posted strong
operating profit gains year-over-year on volume improvements and improved baby
food pricing.
Resort Operations
The Ralston Resorts operation posted its most profitable quarter in its
history with a $37.6 million operating profit performance for the quarter ended
March 31, 1996, compared to $31.1 million for the same quarter last fiscal year.
This year's second quarter sales also improved to $76.5 million or an increase
of 9.8%. For the six months ended March 31, 1996, operating profit increased
$7.2 million to $38.2 million compared to the same six month period of the prior
fiscal year. Excellent winter ski conditions resulted in increases in skier
visits and room nights of 9.1% and 8.5%, respectively, compared to last year's
first six months. The current year quarter and six month operations also reflect
significant reductions in operating costs. Sales per skier were basically flat
on a year-over-year basis. Resort operations also benefited from profits for the
development and sale of property totaling $.4 million in the second quarter and
$.5 million in the six months as part of a joint venture project at Keystone
resort.
7
<PAGE>
Results for Resort Operations are highly seasonal. Historically, more than
the entire year's operating profit has been earned during the Company's second
fiscal quarter which begins on January 1.
Results of Operations
Cost of products sold as a percentage of sales was 50.3% for the current
year second quarter compared to 52.2% for the same quarter of the prior year,
and for the six months ended March 31, 1996, decreased to 49.2% from 49.8% in
the prior year period. These improvements are due primarily to the increased
resort operation revenues and decreased resorts costs partially offset by higher
ingredient costs at Ralston Foods. Selling, general and administrative expense
as a percent of sales decreased slightly to 15.4% in the first six months of the
current year compared to 15.5% in the prior period as increased revenues have
kept pace with higher information systems costs. For the full year in fiscal
1996, information systems costs are expected to increase by $6 - $7 million.
Advertising and promotion expenses for the six months ended March 31, 1996
increased to 22.9% of sales from 20.2% in the prior year period, with the
majority of this increase occurring in the second quarter, due to spending
associated with SPIDER-MAN, a new branded cereal item, higher in-ad trade coupon
promotions and higher support levels for CHEX MIX brand snacks. Income
taxes were 38.7% of earnings before income taxes in the current quarter
compared to 39.0% in the year ago period.
Financial Condition
The Company's primary source of liquidity is cash flow from operations,
which increased to $58.7 million for the six months ended March 31, 1996
compared to $52.3 million for the same period in the prior year, primarily due
to a less significant increase in inventory balances and higher accrued
expenses, partially offset by reduced earnings. Net working capital, excluding
cash and current maturities of long-term debt, was $111.3 million at March 31,
1996 compared to $104.7 million at September 30, 1995.
Net property additions of $28.5 million for the first half of fiscal 1996
include gross property additions of $30.9 million, partially offset by proceeds
of disposals, compared to net additions of $23.4 million in the prior year
consisting of gross additions of $26.6 million, partially offset by property
disposals. During the first six months of the current year the Company
repurchased $7.0 million of its Common Stock compared to $8.3 million in the
prior year. As a result of activity during the first half of fiscal 1996, total
debt declined by $21.5 million to $375.7 million compared to $397.2 million at
September 30, 1995. As a percent of total capitalization, total debt improved in
the six months to 66.2% compared to 71.0% at September 30, 1995.
On May 25, 1995, the Company's Board of Directors authorized management to
repurchase up to one million shares of the Company's Common Stock from time to
time as management determines. As of May 10, 1996, the Company had repurchased
approximately 371,000 shares for $9.1 million pursuant to such authorization.
Outlook
The Company's management publicly announced at the time it released second
quarter earnings on April 22, 1996, that the remainder of the Company's fiscal
year will be difficult. Management believes it is probable that the Company will
record no additional earnings and could record a net loss in the second half of
its fiscal year. Seasonal factors associated with the cereal and ski businesses
already cause the last two quarters of the Company's fiscal years to be
historically low earnings periods. A changing competitive environment featuring
price reductions and deep discounting by top branded cereal competitors, a
resulting increase in the level of cereal products being purchased at lower
promoted prices and stored by consumers, and a continued declining performance
by several of the Company's minor branded cereal products, are the main
contributors to this revised outlook for the final two quarters of fiscal 1996.
8
<PAGE>
If the Company records a net loss during its third quarter or for the second
half of its fiscal year, it may violate a provision in its bank credit
agreements requiring it to meet a specified interest coverage ratio.
Management believes that prior to violating such interest coverage ratio, the
Company will be able to renegotiate its bank credit agreements, obtain a waiver
of the pertinent ratio, or obtain alternative financing at rates not
materially higher than under existing bank credit agreements.
The Ralston Foods cereal and snack subsidiary is currently undergoing a
comprehensive review of its entire business design, with the primary purpose
being to focus on what must be done in order to improve Ralston Foods'
competitive abilities. Management expects the review to be completed by the end
of May and plans to implement changes designed to improve shareholder value
beginning in June.
Cautionary Statement on Forward-Looking Statements
Forward-looking statements, within the meaning of Section 21E of the
Securities and Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis. The Company's results of operations and liquidity
status may differ materially from those in the forward-looking statements. Such
statements are based on management's current views and assumptions, and involve
risks and uncertainties that could affect expected results. For example any of
the following factors cumulatively or individually may impact expected results:
(i) Key ingredient costs are at historical high prices and further cost
increases will negatively impact earnings;
(ii) During the reporting period the Company faced significant price
discount promotions by the largest branded cereal manufacturers and
the same or similar promotions in the future may negatively impact
earnings;
(iii) If the Company violates its interest coverage ratio discussed
in the Outlook section above and the Company is unable to secure
waivers of the ratio or amendments to its bank credit agreements, or
obtain alternate sources of debt financing, then the Company could be
in default of its bank credit agreements (and its 8 3/4% $150 million
Notes due September 15, 2004 by virtue of cross-default provisions
therein). In such event, the lenders under the bank agreements (and
the holders of the Notes) could accelerate repayment of the full amount
of the debt and interest outstanding thereunder; and
(iv) If the Company renegotiates its bank credit agreements or
obtains alternate sources of financing, the Company could face
additional or more restrictive covenants preventing the Company
from engaging in certain actions such as, but not limited to,
payment of dividends, repurchases of stock, making acquisitions and
incurring additional indebtedness.
9
<PAGE>
PART II. OTHER INFORMATION
There is no information required to be reported under any items except those
indicated below.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Amended and Restated Credit Agreement (5-Year) dated as of
March 12, 1996
10.2 Amended and Restated Credit Agreement (364-Day) dated as of
March 12, 1996
27 Financial Data Schedule
(b) The Registrant did not file any reports on Form 8-K during the quarter
for which this report is filed.
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.
RALCORP HOLDINGS, INC.
By: /s/ J. R. MICHELETTO
J. R. Micheletto
Duly Authorized Signatory and
Chief Executive Officer and
Chief Financial Officer
10
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit
Number Description
<S> <C>
10.1 Amended and Restated Credit Agreement
(5-Year) Dated as of March 12, 1996
10.2 Amended and Restated Credit Agreement
(364-Day) Dated as of March 12, 1996
EX-27 Financial Data Schedule
</TABLE>
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of March 12, 1996
among
RALCORP HOLDINGS, INC.
THE LENDERS PARTY HERETO
and
NATIONSBANK, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 1
SECTION 1.01. Defined Terms 1
SECTION 1.02. Accounting Terms 17
SECTION 1.03. Terms Generally 18
ARTICLE II. THE LOANS 18
SECTION 2.01. Revolving Loans 18
SECTION 2.02. Competitive Loan Subfacility 20
SECTION 2.03. Swingline Loan Subfacility 23
SECTION 2.04. Termination and Reduction of Commitments 25
SECTION 2.05. Fees 26
ARTICLE III. ADDITIONAL PROVISIONS REGARDING LOANS 26
SECTION 3.01. Default Rate 26
SECTION 3.02. Prepayments 27
SECTION 3.03. Extension and Conversion 27
SECTION 3.04. Alternate Rate of Interest 28
SECTION 3.05. Reserve Requirements; Change in
Circumstances 29
SECTION 3.06. Change in Legality 30
SECTION 3.07. Indemnity 31
SECTION 3.08. Mandatory Assignment; Commitment
Termination 31
ARTICLE IV. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; U.S.
TAXES; EVIDENCE OF LOANS 32
SECTION 4.01. Payments and Computations 32
SECTION 4.02. Pro Rata Treatment 33
SECTION 4.03. Sharing of Payments 33
SECTION 4.04. U.S. Taxes 34
SECTION 4.05. Evidence of Loans 35
ARTICLE V. CONDITIONS PRECEDENT 36
SECTION 5.01. Conditions to Initial Loans. 36
SECTION 5.02. Each Loan 37
ARTICLE VI. REPRESENTATIONS AND WARRANTIES 38
SECTION 6.01. Corporate Organization and Validity 38
SECTION 6.02. Pending Litigation 38
SECTION 6.03. Title to Properties 39
SECTION 6.04. Patents and Trademarks 39
SECTION 6.05. Governmental Consent 39
SECTION 6.06. Taxes 39
SECTION 6.07. Financial Statements 39
SECTION 6.08. Full Disclosure 40
SECTION 6.09. Funded Indebtedness 40
SECTION 6.10. Affiliates and Subsidiaries 40
SECTION 6.11. Governmental Regulations, Etc. 40
SECTION 6.12. Environmental Matters 41
SECTION 6.13. Solvency 42
SECTION 6.14. ERISA 42
ARTICLE VII. AFFIRMATIVE COVENANTS 42
SECTION 7.01. Information Covenants 42
SECTION 7.02. Preservation of Existence and Franchises 45
SECTION 7.03. Books, Records and Inspections 45
SECTION 7.04. Compliance with Law 46
SECTION 7.05. Payment of Taxes and Other Claims 46
SECTION 7.06. Insurance 46
SECTION 7.07. Maintenance of Property 46
SECTION 7.08. Performance of Obligations 46
SECTION 7.09. ERISA 47
SECTION 7.10. Use of Proceeds 47
SECTION 7.11. Financial Covenants 47
SECTION 7.12. Domestic Revenues 47
ARTICLE VIII. NEGATIVE COVENANTS 47
SECTION 8.01. Funded Indebtedness 48
SECTION 8.02. Liens 49
SECTION 8.03. Nature of Business 49
SECTION 8.04. Consolidation, Merger, Sale or Purchase of
Assets, etc. 49
SECTION 8.05. Transactions with Affiliates 50
SECTION 8.06. Dividends 51
SECTION 8.07. Advances, Investments, Loans, etc. 51
SECTION 8.08. No Dividend Restrictions 51
SECTION 8.09. Fiscal Year 52
ARTICLE IX. EVENTS OF DEFAULT 52
SECTION 9.01. Events of Default 52
SECTION 9.02. Acceleration; Remedies 54
ARTICLE X. AGENT 54
SECTION 10.01. Appointment and Authorization 54
SECTION 10.02. General Immunity 55
SECTION 10.03. Consultation with Professionals 55
SECTION 10.04. Documents 55
SECTION 10.05. Rights as a Lender 55
SECTION 10.06. Responsibility of Agent 55
SECTION 10.07. Action by Agent 55
SECTION 10.08. Notices of Event of Default, Etc.. 56
SECTION 10.09. Indemnification of Agent 56
SECTION 10.10. No Representations 57
SECTION 10.11. Resignation 57
ARTICLE XI. MISCELLANEOUS 58
SECTION 11.01. Notices 58
SECTION 11.02. Survival of Agreement 59
SECTION 11.03. Binding Effect; Termination of Existing
Credit Agreement 59
SECTION 11.04. Benefit of Agreement 59
SECTION 11.05. Right of Set-Off 62
SECTION 11.06. No Waiver; Remedies Cumulative 62
SECTION 11.07. Payment of Expenses, etc. 62
SECTION 11.08. Amendments, Waivers and Consents 63
SECTION 11.09. Counterparts 64
SECTION 11.10. Table of Contents; Headings 64
SECTION 11.11. Survival 64
SECTION 11.12. Governing Law; Submission to Jurisdiction;
Venue 64
SECTION 11.13. Severability 64
SECTION 11.14. Entirety 65
<PAGE>
SCHEDULES
Schedule 1 Lender Addresses and Commitment
Percentages
Schedule 2 Form of Notice of Borrowing
Schedule 3 Form of Notice of
Extension/Conversion
Schedule 4 Permitted Investments
Schedule 5 Form of Competitive Bid Request
Schedule 6 Form of Legal Opinion of R. W. Lockwood,
Esq., General Counsel of Borrower
Schedule 7 Form of Legal Opinion of
Moore & Van Allen, PLLC
Schedule 8 Pending Litigation
Schedule 9 Changes in Financial Condition
Schedule 10 Affiliates
Schedule 11 Subsidiaries
Schedule 12 Environmental Disclosure
Schedule 13 Form of Officer's Compliance Certificate
Schedule 14 Form of Lender Assignment Agreement
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (as amended from time to time,
the "Agreement"), dated as of March 12, 1996, is made by and among RALCORP
HOLDINGS, INC., a Missouri corporation (the "Borrower"); the lenders listed in
Schedule 1 (the "Lenders"); and NATIONSBANK, N.A., a national banking
association, as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Lenders provide the Borrower
with a $175,000,000 revolving credit facility for the purposes of (i)
refinancing existing indebtedness of the Borrower under the Existing Credit
Agreement (hereinafter defined) and (ii) financing the working capital and other
general corporate needs of the Borrower and its Subsidiaries; and
WHEREAS, the Lenders have agreed to provide such requested revolving
facility pursuant to the terms of this Agreement.
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement,
the following terms shall have the meanings specified below:
"Adjusted Eurodollar Rate" shall mean for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate (rounded upwards, if
necessary, to the nearest whole multiple of 1/16th of 1%) equal to the per annum
rate obtained by dividing (a) the rate of interest determined by the Agent (i)
for any Interest Period of one (1) week, the rate of interest equal to the
arithmetic average of the rates shown on the Telerate Screen Page 3875, Official
BBA Fixings for all Major Currencies and (ii) for any other Interest Period, the
rate of interest equal to the London Interbank Offered Rate shown on the
Telerate Screen Page 3750, British Bankers Association Interest Settlement
Rates, in the case of either of clauses (i) and (ii) above as of 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period, by (b) a percentage equal to 100% minus the Adjusted Eurodollar Rate
Reserve Percentage for such Interest Period. In the event the Telerate Screen
Page 3875 or 3750, as applicable, is unavailable for any reason, the rate of
interest determined pursuant to clause (a) of the preceding sentence shall be,
for the Interest Period for each Eurodollar Loan, the average of the interest
rates per annum at which dollars for such Interest Period are offered to
NationsBank in the London Interbank Borrowing Market as of 11:00 a.m.
(Charlotte, North Carolina time) two (2) Business Days prior to the first day of
such Interest Period for a period of time corresponding to such Interest Period
and in an amount corresponding to the amount of such Eurodollar Loan.
"Adjusted Eurodollar Rate Reserve Percentage", for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), shall mean the percentage applicable two
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or including eurocurrency
liabilities, as such term is defined in Regulation D (or with respect to any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined) having a term equal to the
Interest Period for the Eurodollar Loan for which such Adjusted Eurodollar Rate
Reserve Percentage is being determined.
"Affiliate" shall mean, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the equity interest in such Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" shall have the meaning assigned to such term in the
heading hereof.
"Agent Fee Letter" shall mean the fee letter dated March 12, 1996 among the
Borrower and NationsBanc Capital Markets, Inc.
"Agent's Fees" shall have the meaning assigned to such term in Section
2.05(b).
"Agreement" shall have the meaning assigned to such term in
the heading hereof.
"Applicable Margin" shall mean, for purposes of calculating the applicable
interest rate for any day for any Eurodollar Loan or the applicable rate of the
Unused Fee for any day for purposes of Section 2.05(a), the appropriate
applicable margin corresponding to the ratio described below in effect as of the
most recent Calculation Date:
<TABLE>
<CAPTION>
Applicable Applicable
Pricing Consolidated Margin Margin
Level Coverage Ratio Eurodollar Loans Unused Fee
<S> <C> <C> <C>
IV Greater than 2.75 to 1.0 60.0 bps 22.5 bps
III Equal to or less than 2.75 45.0 bps 17.5 bps
to 1.0 but greater than
2.25 to 1.0
II Equal to or less than 2.25 40.0 bps 15.0 bps
to 1.0 but greater than
1.75 to 1.0
I Equal to or less than 1.75 35.0 bps 12.5 bps
to 1.0
</TABLE>
The Applicable Margin as of the Closing Date is (i) 45 bps for Eurodollar Loans
and (ii) 17.5 bps for the Unused Fee. Thereafter, determination of the
appropriate Applicable Margins based on the Consolidated Debt Coverage Ratio
shall be made as of each Calculation Date. The Consolidated Debt Coverage Ratio
in effect as of a Calculation Date shall establish the Applicable Margins that
shall be effective as of the date designated by the Agent as the Applicable
Margin Change Date. The Agent shall determine the Applicable Margins as of each
Calculation Date and shall promptly notify the Borrower and the Lenders of the
Applicable Margins so determined and of the Applicable Margin Change Date. Such
determinations by the Agent of the Applicable Margins shall be conclusive absent
manifest error.
"Applicable Margin Change Date" shall mean, with respect to any Calculation
Date occurring after the Closing Date, a date designated by the Agent that is
not more than five (5) Business Days after receipt by the Agent of the Required
Financial Information for such Calculation Date.
"Bankruptcy Event" shall mean, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%) equal to the greater of
(a) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% or (b)
the Prime Rate in effect on such day. For purposes hereof, (i) "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by NationsBank as its prime rate in effect at its principal office in Charlotte,
North Carolina; each change in the Prime Rate shall be effective on the date
such change is publicly announced as effective and (ii) "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System, or, if
such rate is not so released for any day which is a Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the Agent,
of the quotations for the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it. If for any
reason the Agent shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the Agent
to obtain sufficient quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (a) of the first sentence of
this definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate in accordance with the provisions of Article II.
"Borrower" shall have the meaning assigned to such term in
the heading hereof.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of North Carolina or the State of Missouri
or the State of New York) on which banks are open for business in Charlotte,
North Carolina, the State of Missouri and the State of New York; provided,
however, that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Calculation Date" shall mean each December 31, March 31, June 30 and
September 30.
"Capital Lease" shall mean any lease of Property which, in accordance with
GAAP, should be capitalized on the lessee's balance sheet or for which the
amount of the assets and liabilities thereunder, if so capitalized, should be
disclosed, in accordance with GAAP, in a note to such balance sheet.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) dollar denominated (or
foreign currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits or Eurodollar certificates of deposit of (A) any
domestic commercial bank with a bank rating of at least C (or the equivalent
thereof) by Thomson Bank Watch or (B) any bank whose short-term commercial paper
rating from S&P is at least A-1 (or the equivalent thereof) or from Moody's is
at least P-1 (or the equivalent thereof) (any such bank being an "Approved
Bank"), in each case with maturities of not more than twelve months from the
date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any commercial
paper and variable or fixed rate notes issued by, or guaranteed by any domestic
corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or
the equivalent thereof) or better by Moody's and maturing within twelve months
of the date of acquisition, (iv) interests in money market or mutual funds which
invest solely in assets or securities of the type described in subparagraph (i),
(ii) and/or (iii) hereof and (v) money market preferred investments having a
long-term rating of A or better by S&P or A-2 or better by Moody's or a
short-term rating of A-1 or better by S&P or P-1 or better by Moody's.
"Change of Control" shall mean the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
control over, Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 35% or more of the combined voting power of all
Voting Stock of the Borrower, or (ii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Borrower (together with any new
director whose election by the Borrower's Board of Directors or whose nomination
for election by the Borrower's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Borrower then in office. As used herein, "beneficial ownership"
shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, (i) with respect to each Lender, the commitment of
such Lender (A) to make Revolving Loans in an aggregate principal amount at any
time outstanding of up to such Lender's Commitment Percentage multiplied by the
Revolving Committed Amount (as such Revolving Committed Amount may be reduced
from time to time pursuant to Section 2.04) and (B) to purchase participation
interests in the Swingline Loans in accordance with the provisions of Section
2.03(b)(iii), and (ii) with respect to the Swingline Lender, the commitment of
the Swingline Lender to make Swingline Loans in an aggregate principal amount at
any time outstanding of up to the Swingline Committed Amount.
"Commitment Percentage" shall mean, for each Lender, the percentage
identified as its Commitment Percentage opposite such Lender's name on Schedule
1, as such percentage may be modified in connection with any assignment made in
accordance with the terms of Section 11.04.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to the terms of Section 2.02.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender in accordance with the provisions of Section 2.02, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request by the Borrower for
Competitive Bids in accordance with the provisions of Section 2.02.
"Competitive Bid Request Fee" shall have the meaning assigned to such term
in Section 2.05(c).
"Competitive Loan" shall mean a loan made by a Lender in its discretion
pursuant to the provisions of Section 2.02.
"Competitive Loan Lender" shall mean, at any time, a Lender which has any
Competitive Loans outstanding.
"Consolidated Debt Coverage Ratio" shall mean, at any time, the ratio of
(i) Consolidated Funded Indebtedness (plus, for purposes only of any
determination of the Applicable Margin pursuant to the definition of such term
set forth in this Section 1.01, the aggregate principal amount outstanding under
any Permitted Receivables Financings) at such time to (ii) Consolidated EBITDA
for the four fiscal-quarter period then ended.
"Consolidated EBIT" shall mean, for any period, the sum of (i) Consolidated
Net Income for such period, plus (ii) an amount which, in the determination of
Consolidated Net Income for such period, has been deducted for (A) Consolidated
Interest Expense for such period and (B) total Federal, state, local and foreign
income, value added and similar taxes of the Borrower and its consolidated
Subsidiaries for such period.
"Consolidated EBITDA" shall mean, for any period, the sum of (i)
Consolidated EBIT for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
consolidated depreciation and amortization expense of the Borrower and its
consolidated Subsidiaries for such period.
"Consolidated Funded Indebtedness" shall mean, at any time, the outstanding
principal amount of all Funded Indebtedness, without duplication, of the
Borrower and its consolidated Subsidiaries at such time.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBIT to (ii) Consolidated Interest Expense.
"Consolidated Interest Expense" shall mean, for any period, all interest
expense (whether shown as interest expense or as loss and expenses on sales of
receivables) of the Borrower and its consolidated Subsidiaries for such period,
as determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, net income after
taxes for such period for the Borrower and its consolidated Subsidiaries, as
determined in accordance with GAAP but excluding any non-cash charges or gains
which are unusual, non-recurring or extraordinary.
"Consolidated Net Worth" shall mean, at any time, total shareholders'
equity of the Borrower and its Subsidiaries at such time, as determined in
accordance with GAAP.
"Consolidated Total Assets" shall mean, at any time, all items which, in
accordance with GAAP, would be classified as assets on a consolidated balance
sheet of the Borrower as of such time.
"Controlled Group" shall mean (i) the controlled group of corporations as
defined in Section 414(b) of the Code and the applicable regulations thereunder,
or (ii) the group of trades or businesses under common control as defined in
Section 414(c) of the Code and the applicable regulations thereunder, of which
the Borrower or any of its Subsidiaries is a member.
"Credit Documents" shall mean (i) this Agreement and (ii) all other related
agreements and documents issued or delivered under this Agreement or pursuant
hereto.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Dividend" shall mean, with respect to any corporation, any cash or
non-cash dividend by such corporation to its stockholders, any return of capital
by such corporation to its stockholders, any other distribution, payment or
delivery of property or cash by such corporation to its stockholders as such,
any direct or indirect redemption, retirement, purchase or other acquisition of
any shares of any class of the capital stock of such corporation now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any such shares), or the setting aside of any funds by such
corporation for any of the foregoing purposes.
"Dollars", "dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"Eligible Assignee" shall mean (i) any Lender or any Affiliate or
Subsidiary of a Lender, and (ii) any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D of the
Securities and Exchange Commission) reasonably acceptable to the Agent and the
Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries is a member
of the same Controlled Group.
"Eurodollar Loan" shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Section
9.01.
"Existing Credit Agreement" shall mean that certain Amended and Restated
Credit Agreement dated as of November 30, 1994, as amended, among Ralcorp
Holdings, Inc., the lenders party thereto and NationsBank, N.A. (successor in
interest to NationsBank of North Carolina, N.A. and NationsBank, N.A.
(Carolinas)) as agent for such lenders.
"Federal Funds Effective Rate" shall have the meaning assigned to such term
within the definition of "Base Rate".
"Fees" shall mean all fees payable pursuant to Section 2.05.
"Fixed Rate Loan" shall mean a Competitive Loan bearing interest at a fixed
percentage rate per annum as provided in accordance with the provisions of
Section 2.02.
"Foreign Subsidiary" shall mean, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness, excluding intercompany items, of such Person
for borrowed money, (ii) all obligations, including without limitation
intercompany items, of such Person for the deferred purchase price of assets or
services which in accordance with GAAP would be shown to be a liability of such
Person (or on the liability side of a balance sheet of such Person), (iii)
indebtedness of such Person created or arising under any conditional sale or
title retention agreement, (iv) the principal portion of all obligations of such
Person under Capital Leases, (v) the maximum available amount of all letters of
credit or acceptances issued or created for the account of such Person, (vi) all
Guaranty Obligations of such Person with respect to Funded Indebtedness of
another entity, (vii) all Funded Indebtedness of another entity secured by a
Lien on any Property of such Person, whether or not such Funded Indebtedness has
been assumed by such Person and (viii) all Funded Indebtedness of any
partnership or joint venture (except for any such Funded Indebtedness with
respect to which recourse by the holder thereof is limited to the assets of such
partnership or joint venture) where such Person is a general partner, net of any
assets of such partnership or joint venture.
"GAAP" shall mean generally accepted accounting principles and provisions
as used in the United States of America and as in effect as of the Closing Date,
applied on a consistent basis subject to the terms of Section 1.02.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Funded Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to purchase any such
Funded Indebtedness or any Property constituting security therefor, (ii) to
advance or provide funds or other support for the payment or purchase of any
such Funded Indebtedness or to maintain working capital, solvency or other
balance sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar agreements
or arrangements) for the benefit of any holder of Funded Indebtedness of such
other Person, (iii) to lease or purchase Property, securities or services
primarily for the purpose of assuring the holder of such Funded Indebtedness, or
(iv) to otherwise assure or hold harmless the holder of such Funded Indebtedness
against loss in respect thereof. The amount of Guaranty Obligations hereunder
shall be deemed to be an amount equal to the stated or determinable amount of
the Funded Indebtedness in respect of which such Guaranty Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated amount in
respect thereof (assuming such other Person is required to perform thereunder)
as determined in good faith.
"Hazardous Substances" shall have the meaning assigned to such term in
Section 6.12.
"Interest Payment Date" shall mean (i) as to any Base Rate Loan, the last
day of each March, June, September and December, the date of repayment of the
principal of such Loan and the Maturity Date, (ii) as to any Eurodollar Loan,
the last day of each Interest Period for such Loan and the Maturity Date, and in
addition where the applicable Interest Period is more than 3 months, then also
on the date 3 months from the beginning of the Interest Period, and each 3
months thereafter, (iii) as to any Fixed Rate Loan, the last day of the Interest
Period for such Loan, the Maturity Date, and in addition where the applicable
Interest Period is more than 90 days, then also on the date 90 days from the
beginning of the Interest Period and each 90 days thereafter and (iv) as to any
Quoted Rate Swingline Loan, the last day of each calendar month and the Maturity
Date. If an Interest Payment Date falls on a date which is not a Business Day,
such Interest Payment Date shall be deemed to be the next succeeding Business
Day, except that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on the next
preceding Business Day.
"Interest Period" shall mean (i) as to any Eurodollar Loan, a period of one
(1) week or a period of one, two, three or six months' duration, as the Borrower
may elect, commencing in each case on the date of the borrowing (including
conversions, extensions and renewals), (ii) as to any Fixed Rate Loan, a period
commencing in each case on the date of the borrowing and ending on the date
specified in the applicable Competitive Bid whereby the offer to make such Fixed
Rate Loan was extended (such ending date in any event to be not less than 15 nor
more than 180 days from the date of borrowing) and (iii) as to any Quoted Rate
Swingline Loan, a period commencing in each case on the date of the borrowing
and ending on the date agreed to by the Borrower and the Swingline Lender in
accordance with the provisions of Section 2.03(b)(i) (such ending date in any
event to be not more than 7 Business Days from the date of borrowing); provided,
however, (A) if any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Maturity Date and (C) in the case of Eurodollar Loans
(other than any Eurodollar Loans having a one (1) week Interest Period), where
an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall, subject to clause (A) above, end on the last
Business Day of such calendar month.
"Investment", in any Person, shall mean any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any Guaranty Obligation incurred for the benefit of such
Person.
"Lenders" shall have the meaning assigned to such term in the heading
hereof. The term "Lenders" shall also include within the meaning thereof any
Person which becomes a Lender in accordance with the terms of Section 11.04(b).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" shall mean the Revolving Loans (or any Revolving Loan
bearing interest at the Base Rate or the Adjusted Eurodollar Rate and referred
to as a Base Rate Loan or a Eurodollar Loan), the Competitive Loans and/or the
Swingline Loans, individually or collectively, as appropriate.
"Long Term Debt" shall mean, with respect to any Person, all indebtedness
of such Person which, in accordance with GAAP, would be classified as long term
debt on a balance sheet of such Person, but in any event including all
indebtedness of such Person having a final maturity date of more than one year
after the date of creation thereof, notwithstanding that payments in respect
thereof are required to be made by such Person within one year of the date of
determination. Any indebtedness which is extended or renewed shall be deemed to
have been created at the date of such extension or renewal.
"Mandatory Borrowing" shall have the meaning assigned to such term in
Section 2.03(b)(iii).
"Material Adverse Effect" shall mean a material adverse effect on (i) the
consolidated operations or consolidated financial condition of the Borrower,
(ii) the ability of the Borrower to perform any material obligation under the
Credit Documents or (iii) the material rights and remedies of the Lenders under
the Credit Documents.
"Material Plan" shall have the meaning assigned to such term in Section
9.01(h).
"Material Subsidiary" shall mean (i) Ralston Foods, Inc., Bremner, Inc.,
Beech Nut Nutrition Corporation and Ralston Resorts, Inc. and (ii) any other
direct or indirect Subsidiary of the Borrower which on or after the Closing Date
has total assets equal to or greater than 10% of Consolidated Total Assets.
"Maturity Date" shall mean March 12, 2001.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 3(37) of ERISA to which the Borrower or any
of its Subsidiaries or any ERISA Affiliate is then making or accruing an
obligation to make contributions or with respect to which the Borrower or any of
its Subsidiaries or any ERISA Affiliate has any liability.
"NationsBank" shall mean NationsBank, N.A., a national
banking association.
"Notice of Borrowing" shall mean a written notice of borrowing in
substantially the form of Schedule 2, as required by Section 2.01(b).
"Notice of Extension/Conversion" shall mean a written notice of continuance
or conversion of one or more Loans in substantially the form of Schedule 3, as
required by Section 3.03.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, a body
corporate established within the Department of Labor pursuant to ERISA, or any
successor thereto.
"Permitted Investments" shall mean Investments which are either (i) cash
and Cash Equivalents, (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (iii) acquisitions permitted by Section 8.04(c), (iv) (A)
Investments in Domestic Subsidiaries of the Borrower and (B) Investments in
Foreign Subsidiaries of the Borrower (in addition to Investments permitted by
clause (iii) above), provided that, after giving effect to such Investment, the
aggregate amount of all such Investments made pursuant to this clause (iv)(B)
since the Closing Date, together with the aggregate amount of the cash portion
of purchase prices paid for acquisitions of Foreign Subsidiaries of the Borrower
made pursuant to Section 8.04(c) and the aggregate amount of transfers to
Foreign Subsidiaries of the Borrower made pursuant to Section 8.05(c), does not
exceed 5% of Consolidated Total Assets as of the most recent fiscal year end
preceding the date of such Investment with respect to which the Agent shall have
received the Required Financial Information, (v) transactions permitted by
Section 8.05, (vi) loans to directors, officers, employees, agents, customers or
suppliers that do not exceed an aggregate principal amount of $5,000,000 at any
one time outstanding, (vii) equity securities listed on the New York Stock
Exchange ("NYSE"), provided that (A) the long-term credit rating of the
corporation issuing such securities shall be A- (or the equivalent thereof) or
better from S&P or A3 (or the equivalent thereof) or better from Moody's and (B)
the aggregate purchase price paid for all such equity securities held at any
time shall not exceed $5,000,000, (viii) (A) the contribution by Ralston
Resorts, Inc. of certain undeveloped real estate located in or around Summit
County, Colorado and having a book value not to exceed $25,000,000 to a joint
venture of which Ralston Resorts, Inc. or one of its Subsidiaries is an equity
owner and (B) the ownership interest of Ralston Resorts, Inc. in such joint
venture or (ix) Investments set forth in Schedule 4 (but without additional
acquisitions thereof except as otherwise permitted hereby).
"Permitted Liens" shall mean (a) (i) Liens in favor of the Agent on behalf
of the Lenders, (ii) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof); (iii) Liens in respect of Property imposed by law
arising in the ordinary course of business such as materialmen's, mechanics',
warehousemen's and other like Liens provided that such Liens secure only amounts
not yet due and payable or, if due and payable, are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the Property subject
to any such Lien is not yet subject to foreclosure, sale or loss on account
thereof); (iv) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs; (v) Liens arising from good faith deposits in connection with or to
secure performance of tenders, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment of borrowed
money); (vi) Liens arising from good faith deposits in connection with or to
secure performance of statutory obligations and surety and appeal bonds; (vii)
easements, rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or encumbrances
not, in any material respect, impairing the use of the encumbered Property for
its intended purposes; (viii) Liens arising from Uniform Commercial Code
financing statements regarding Capital Leases and purchase money Liens securing
purchase money indebtedness, in each case to the extent permitted under Section
8.01(d); (ix) Liens on Property of any Person at the time such Person becomes a
Subsidiary of the Borrower or any of its Subsidiaries; (x) Liens existing as of
the Closing Date and identified in the financial statements referred to in
Section 6.07; (xi) Liens on Property of any Subsidiary of the Borrower and
exclusively securing indebtedness of such Subsidiary to the Borrower or any
other Subsidiary of the Borrower; (xii) subject to the terms of Section 8.01 and
Section 8.04, Liens on any Property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of such Property,
whether directly or indirectly by way of share disposition or otherwise,
provided that after 120 days from the creation of such Lien such Property shall
not be owned by the Borrower or any of its Subsidiaries and any indebtedness
secured by such Lien shall be without recourse to the Borrower or any of its
Subsidiaries; (xiii) Liens deemed to exist in connection with sales of
receivables permitted under Section 8.04(b)(iii) (including any related filings
of Uniform Commercial Code financing statements), but only to the extent that
any such Lien relates to the applicable receivables and related property
actually sold pursuant to any such transactions; and (xiv) extensions, renewals
or replacements, in whole or in part, of any Lien referred to in the foregoing
clauses (i) to (xiii), inclusive, provided that the principal amount of
indebtedness secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or any
part of the same Property that secured the Lien extended, renewed or replaced
(plus improvements on such Property); and (b) Liens securing an aggregate amount
of indebtedness outstanding at any time that is no greater than 5% of the
Consolidated Total Assets less (A) all liabilities and liability items except
long-term debt, deferred income taxes and shareholders' equity and (B) all good
will, trade names, trademarks, patents, unauthorized debt discount and expenses,
and other similar intangibles, all as computed pursuant to GAAP.
"Permitted Receivables Financings" shall mean one or more receivables
financings in an aggregate principal amount not to exceed $50,000,000 at any one
time outstanding and involving the sale by the Borrower or any of its
Subsidiaries of accounts receivable in true sale transactions (as determined in
accordance with GAAP).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any Governmental
Authority.
"Plan" shall mean any "single-employer plan" (as defined in Section
4001(a)(15) of ERISA and subject to Title IV of ERISA), which is maintained, or
at any time during the five calendar years preceding the date of this Agreement
was maintained, for employees of the Borrower or any of its Subsidiaries or any
ERISA Affiliate.
"Prime Rate" shall have the meaning assigned to such term within the
definition of "Base Rate".
"Pro Forma Basis" shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent Calculation Date preceding
the date of such transaction with respect to which the Agent has received the
Required Financial Information. As used herein, "transaction" shall mean (i) any
incurrence, assumption or retirement of Funded Indebtedness as referred to in
Section 8.01(f), (ii) any corporate merger or consolidation as referred to in
Section 8.04(a), (iii) any sale or other disposition of assets as referred to in
Section 8.04(b) or (iv) any acquisition of capital stock or securities or any
purchase, lease or other acquisition of Property as referred to in Section
8.04(c). With respect to any transaction of the type described in clause (i)
above regarding Funded Indebtedness which has a floating or formula rate, the
implied rate of interest for such Funded Indebtedness for the applicable period
for purposes of this definition shall be determined by utilizing the rate which
is or would be in effect with respect to such Funded Indebtedness as at the
relevant date of determination.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" shall mean, with respect to any Quoted Rate Swingline Loan,
the fixed percentage rate per annum offered by the Swingline Lender and accepted
by the Borrower with respect to such Swingline Loan as provided in accordance
with the provisions of Section 2.03.
"Quoted Rate Swingline Loan" shall mean a Swingline Loan
bearing interest at a Quoted Rate.
"Regulation D, G, T, U or X" shall mean Regulation D, G, T, U or X, as
applicable, 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.
"Required Financial Information" shall mean, with respect to the applicable
Calculation Date, (i) the financial statements of the Borrower required to be
delivered pursuant to Section 7.01 for the fiscal period or quarter ending as of
such Calculation Date, and (ii) the certificate of the chief financial officer,
controller or treasurer of the Borrower required by Section 7.01(c) to be
delivered with the financial statements described in clause (i) above.
"Required Lenders" shall mean, at any time, Lenders which are
then in compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Commitments to make
Revolving Loans or (ii) if the Commitments have been terminated, the outstanding
Loans.
"Revolving Committed Amount" shall have the meaning assigned to such term
in Section 2.01(a).
"Revolving Loans" shall have the meaning assigned to such term in Section
2.01(a).
"S&P" shall mean Standard & Poors Corporation.
"Solvent" shall mean, with respect to any Person as of a particular date,
that on such date (a) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary course and
(e) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Subsidiary" of any Person shall mean (i) any corporation more than 50% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through Subsidiaries, and (ii) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through Subsidiaries
has more than 50% equity interest at any time.
"Swingline Committed Amount" shall have the meaning assigned to such term
in Section 2.03.
"Swingline Lender" shall mean NationsBank, or, if NationsBank shall no
longer be the Agent, such Lender which shall become the Agent hereunder in
accordance with the provisions of Section 10.11.
"Swingline Loan" shall have the meaning assigned to such term in
Section 2.03.
"Unused Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Unused Fee Calculation Period" shall have the meaning assigned to such
term in Section 2.05(a).
"Unused Revolving Committed Amount" shall mean, for any period, the amount
by which (i) the then applicable Revolving Committed Amount exceeds (ii) the
daily average sum for such period of (A) the outstanding aggregate principal
amount of all Loans other than Swingline Loans and Competitive Loans and (B) 50%
of the outstanding aggregate principal amount of all Swingline Loans.
"Voting Stock" shall mean, with respect to any Person, capital stock issued
by a corporation, or equivalent interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency.
SECTION 1.02. Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared in accordance with GAAP
applied on a consistent basis (including, but not limited to, the non-inclusion
of footnotes in any unaudited financial statements covering a period of less
than a full fiscal year). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with those
used in the preparation of the latest annual or quarterly financial statements
of the applicable Person(s) required to be delivered to the Agent and each
Lender pursuant to Section 7.01 (or prior to the delivery of the first financial
statements pursuant to Section 7.01 used in the preparation of the audited
financial statements of such Person(s) as at September 30, 1995); provided,
however, if (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements or (ii) the
Agent or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with those used in the preparation of the latest financial
statements as to which no such objection shall have been made (which, if
objection is made in respect of the first financial statements delivered
pursuant to Section 7.01, shall mean the audited financial statements of the
applicable Person(s) dated September 30, 1995).
The Borrower shall deliver to the Agent and each Lender, at the
same time as the delivery of any annual or quarterly financial statement
pursuant to Section 7.01, (i) a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the most recent preceding annual or quarterly
financial statements as to which no objection has been made in accordance with
the paragraph above and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
SECTION 1.03. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." All references
herein to Articles, Sections and Schedules shall be deemed references to
Articles and Sections of, and Schedules to, this Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP.
ARTICLE II. THE LOANS
SECTION 2.01. Revolving Loans.
(a) Revolving Commitment. Subject to and upon the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, at any time and from time to time from the
Closing Date until the Maturity Date, to make revolving credit loans (each a
"Revolving Loan" and, collectively, "Revolving Loans") to the Borrower for the
purposes set forth in Section 7.10; provided, however, (i) with regard to each
Lender individually, such Lender's pro rata share of outstanding Revolving Loans
shall not exceed such Lender's Commitment Percentage of the Revolving Committed
Amount, (ii) with regard to the Lenders collectively, the aggregate amount of
Revolving Loans outstanding shall not exceed ONE HUNDRED SEVENTY-FIVE MILLION
DOLLARS ($175,000,000), as such maximum amount may be reduced from time to time
as provided in Section 2.04 or as otherwise provided herein (such amount, as so
reduced from time to time, the "Revolving Committed Amount"), and (iii) in
addition to the limitations set forth in the preceding subparagraphs (i) and
(ii), in no event shall the sum of Revolving Loans outstanding plus Competitive
Loans outstanding plus Swingline Loans outstanding exceed the Revolving
Committed Amount. Revolving Loans hereunder may consist of Base Rate Loans or
Eurodollar Loans (or a combination thereof) as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.
(b) Advances.
(i) Notices. Whenever the Borrower desires a Revolving Loan advance
hereunder, it shall give an appropriate Notice of Borrowing to the Agent by
hand delivery, telex or telecopy not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of the requested advance in the
case of Base Rate Loans, and on the third Business Day prior to the
requested advance in the case of Eurodollar Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan
is requested, (B) the date of the requested advance (which shall be a
Business Day), (C) the aggregate principal amount of the Revolving Loan
requested, and (D) whether the Revolving Loan requested shall consist of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Periods with respect thereto.
If the Borrower shall fail to specify in any such Notice of Borrowing (i)
an applicable Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of one month,
or (ii) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. The Agent shall as
promptly as practicable give each Lender notice of each requested Revolving
Loan advance, of such Lender's pro rata share thereof and of the other
matters covered in the applicable Notice of Borrowing.
(ii) Minimum Amounts. Each Revolving Loan shall be in an aggregate
principal amount that is not less than the lesser of $5,000,000 or the
remaining amount available to be borrowed with respect to the Revolving
Loans in accordance with the terms of Section 2.01(a). Any Revolving Loan
requested in excess of $5,000,000 shall be in an integral multiple of
$500,000.
(iii) Funding of Advances. Each Lender will make its pro rata share of
each Revolving Loan available to the Agent by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing
by deposit in dollars of immediately available funds at the offices of the
Agent in Charlotte, North Carolina, or at such other address as the Agent
may designate in writing, and the Agent shall, by 3:00 p.m. (Charlotte,
North Carolina time) on the same day, credit the amount so received to the
general deposit account of the Borrower with the Agent. All Revolving Loans
shall be made by the Lenders pro rata on the basis of each Lender's
Commitment Percentage. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make Revolving Loans
hereunder; provided, however, that the failure of any Lender to fulfill its
Commitment hereunder shall not relieve any other Lender of its Commitment
hereunder. Unless the Agent shall have been notified by any Lender prior to
the date of any Revolving Loan advance that such Lender does not intend to
make available to the Agent its portion of the Revolving Loan advance to be
made on such date, the Agent may assume that such Lender has made such
amount available to the Agent on the date of such Revolving Loan advance,
and the Agent, in reliance upon such assumption, may (in its sole
discretion without any obligation to do so) make available to the Borrower
a corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Lender or the Borrower, 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 Borrower to the
date such corresponding amount is recovered by the Agent, at a per annum
rate equal to, with respect to the Borrower, the then applicable rate
calculated in accordance with Section 2.01(d) and, with respect to such
Lender, the Federal Funds Effective Rate.
(c) Repayment. The Borrower hereby promises to pay to the Lenders the
principal amount of all Revolving Loans outstanding hereunder on the Maturity
Date.
(d) Interest. (i) Interest Rates. Subject to the provisions
of Section 3.01, Revolving Loans shall bear interest as follows:
(A) Base Rate Loans. During such periods as Revolving Loans shall
consist of Base Rate Loans, at a per annum rate (computed on the basis of
the actual number of days elapsed over a year of 365 days) equal to the
Base Rate in effect from time to time.
(B) Eurodollar Loans. During such periods as Revolving Loans
shall consist of Eurodollar Loans, at a per annum rate (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal
to the sum of the Adjusted Eurodollar Rate for the Interest Period in
effect for such Eurodollar Loan plus the Applicable Margin in effect from
time to time.
(ii) Payment of Interest. The Borrower hereby promises to pay to the
Lenders on each applicable Interest Payment Date (or at such other times as may
be specified herein) accrued interest on the Revolving Loans.
SECTION 2.02. Competitive Loan Subfacility.
(a) Competitive Loans. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, the Borrower may, from time
to time from the Closing Date until the earlier of the Maturity Date or the
termination of the Commitments hereunder, request and each Lender may, in its
sole discretion, agree to make Competitive Loans to the Borrower; provided,
however, (i) the aggregate principal amount of Competitive Loans outstanding
shall not at any time exceed the Revolving Committed Amount; and (ii) the sum of
Revolving Loans outstanding plus Competitive Loans outstanding plus Swingline
Loans outstanding shall not at any time exceed the Revolving Committed Amount.
Each Competitive Loan shall be comprised entirely of Fixed Rate Loans. Each
Competitive Loan shall be not less than $5,000,000 in the aggregate and in
integral multiples of $500,000 in excess thereof (or the remaining portion of
the Revolving Committed Amount, if less).
(b) Competitive Bid Requests. The Borrower may solicit Competitive Bids by
delivery of a Competitive Bid Request substantially in the form of Schedule 5 to
the Agent by 12:00 noon (Charlotte, North Carolina time) on a Business Day not
less than three (3) nor more than ten (10) Business Days prior to the date of a
requested Competitive Loan advance. A Competitive Bid Request (i) shall specify
(A) the date of the requested Competitive Loan advance (which shall be a
Business Day), (B) the amount of the requested Competitive Loan advance and (C)
the applicable Interest Periods requested, and (ii) shall be accompanied by
payment of the Competitive Bid Request Fee. The Agent shall notify the Lenders
of its receipt of a Competitive Bid Request and the contents thereof and invite
the Lenders to submit Competitive Bids in response thereto. No more than five
(5) Competitive Bid Requests (e.g., the Borrower may request Competitive Bids
for no more than five (5) different Interest Periods at a time) shall be
submitted at any one time.
(c) Competitive Bid Procedure. Each Lender may, in its sole discretion,
make one or more Competitive Bids to the Borrower in response to a Competitive
Bid Request. Each Competitive Bid must be received by the Agent not later than
10:00 a.m. (Charlotte, North Carolina time) on the proposed date of a
Competitive Loan advance; provided, however, that should the Agent, in its
capacity as a Lender, desire to submit a Competitive Bid it shall notify the
Borrower of its Competitive Bid and the terms thereof not later than 9:30 a.m.
(Charlotte, North Carolina time) on the proposed date of a Competitive Loan
advance. A Lender may offer to make all or part of the requested Competitive
Loan advance and may submit multiple Competitive Bids in response to a
Competitive Bid Request. The Competitive Bid shall specify (i) the particular
Competitive Bid Request as to which the Competitive Bid is submitted, (ii) the
minimum (which shall be not less than $1,000,000 and in integral multiples of
$500,000 in excess thereof) and maximum principal amounts of the requested
Competitive Loan or Loans as to which such Lender is willing to make, and (iii)
the applicable interest rate or rates and Interest Period or Periods therefor. A
Competitive Bid submitted by a Lender in accordance with the provisions hereof
shall be irrevocable. The Agent shall promptly notify the Borrower of all
Competitive Bids made and the terms thereof. The Agent shall send a copy of each
of the Competitive Bids to the Borrower for its records as soon as practicable.
(d) Acceptance of Competitive Bids. The Borrower may, in its sole and
absolute discretion, subject only to the provisions of this subsection (d),
accept or refuse any Competitive Bid offered to it. To accept a Competitive Bid,
the Borrower shall give written notification of its acceptance of any or all
such Competitive Bids to the Agent by 11:00 a.m. (Charlotte, North Carolina
time) on the proposed date of Competitive Loan advance; provided, however, (i)
the failure by the Borrower to give timely notice of its acceptance of a
Competitive Bid shall be deemed to be a refusal thereof, (ii) the Borrower may
accept Competitive Bids only in ascending order of rates, (iii) the aggregate
amount of Competitive Bids accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Bid Request, (iv) if the Borrower
shall accept a bid or bids made at a particular Competitive Bid Rate, but the
amount of such bid or bids shall cause the total amount of bids to be accepted
by the Borrower to be in excess of the amount specified in the Competitive Bid
Request, then the Borrower shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such bid
at such Competitive Bid Rate, and (v) no bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $1,000,000
and integral multiples of $500,000 in excess thereof, except that where a
portion of a Competitive Bid is accepted in accordance with the provisions of
subsection (iv) of this Section 2.02, then in a minimum principal amount of
$100,000 and integral multiples thereof (but not in any event less than the
minimum amount specified in the Competitive Bid), and in calculating the pro
rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to subsection (iv) of this Section 2.02, the
amounts shall be rounded to integral multiples of $100,000 in a manner which
shall be in the discretion of the Borrower. A notice of acceptance of a
Competitive Bid given by the Borrower in accordance with the provisions hereof
shall be irrevocable. The Agent shall, not later than 12:00 noon (Charlotte,
North Carolina time) on the proposed date of Competitive Loan advance, notify
each bidding Lender whether or not its Competitive Bid has been accepted (and if
so, in what amount and at what Competitive Bid Rate), and each successful bidder
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Loan in respect of which its bid has been accepted.
(e) Funding of Competitive Loans. Each Lender which is to make a
Competitive Loan shall make its Competitive Loan advance available to the Agent
by 2:00 P.M. (Charlotte, North Carolina time) on the date specified in the
Competitive Bid Request by deposit in dollars of immediately available funds at
the office of the Agent in Charlotte, North Carolina, or at such other address
as the Agent may designate in writing. The Agent shall, by 3:00 p.m. (Charlotte,
North Carolina time) on the same day, credit the amount so received to the
general deposit account of the Borrower with the Agent.
(f) Repayment of Competitive Loans. The Borrower hereby promises to pay to
each Competitive Loan Lender the principal amount of the Competitive Loans of
such Lender on the last day of the Interest Period applicable thereto; provided,
however, unless the Borrower shall give notice to the Agent otherwise, the
Borrower, subject to the provisions of Section 5.02, shall be deemed to have
requested a Revolving Loan comprised solely of Base Rate Loans in the amount of
a maturing Competitive Loan, the proceeds of which will be used to repay such
Competitive Loan.
(g) Interest. (i) Interest Rates. Subject to the
provisions of Section 3.01, each Competitive Loan shall bear
interest at the Competitive Bid Rate applicable thereto.
(ii) Payment of Interest. The Borrower hereby promises to pay to each
Competitive Loan Lender on each applicable Interest Payment Date (or at such
other times as may be specified herein) accrued interest on the Competitive
Loans made by such Lender.
SECTION 2.03. Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to and upon the terms and conditions and
relying upon the representations and warranties herein set forth, the Swingline
Lender, in its individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a "Swingline Loan" and, collectively, the "Swingline
Loans") from time to time from the Closing Date until the Maturity Date for the
purposes hereinafter set forth; provided, however, (i) the aggregate amount of
Swingline Loans outstanding at any time shall not exceed [THIRTY MILLION DOLLARS
($30,000,000)] (the "Swingline Committed Amount"), and (ii) the sum of Revolving
Loans outstanding plus Competitive Loans outstanding plus Swingline Loans
outstanding shall not exceed at any time the Revolving Committed Amount.
Swingline Loans hereunder shall be made as Base Rate Loans or Quoted Rate
Swingline Loans as the Borrower may request in accordance with the provisions of
this Section 2.03, and may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline Loan Advances.
(i)Notices; Disbursement. Whenever the Borrower desires a Swingline
Loan advance hereunder it shall give written notice (or telephone notice
promptly confirmed in writing) to the Swingline Lender not later than 11:00
a.m. (Charlotte, North Carolina time) on the Business Day of the requested
Swingline Loan advance. Each such notice shall be irrevocable and shall
specify (A) that a Swingline Loan advance is requested, (B) the date of the
requested Swingline Loan advance (which shall be a Business Day) and (C)
the principal amount of the Swingline Loan advance requested. Each
Swingline Loan shall be made as a Base Rate Loan or a Quoted Rate Swingline
Loan and shall have such maturity date as the Swingline Lender and the
Borrower shall agree upon receipt by the Swingline Lender of any such
notice from the Borrower. The Swingline Lender shall initiate the transfer
of funds representing the Swingline Loan advance to the Borrower by 3:00
p.m. (Charlotte, North Carolina time) on the Business Day of the requested
borrowing.
(ii)Minimum Amounts. Each Swingline Loan advance shall be in a
minimum principal amount of $500,000 and in integral multiples of $100,000
in excess thereof.
(iii)Repayment of Swingline Loans. The Borrower hereby promises to
pay to the Swingline Lender the principal amount of each Swingline Loan on
the earlier of (A) the maturity date agreed to by the Swingline Lender and
the Borrower with respect to such Loan (which maturity date shall not be a
date more than 7 Business Days from the date of advance thereof) or (B) the
Maturity Date. The Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the Lenders, demand
repayment of its Swingline Loans by way of a Revolving Loan advance, in
which case the Borrower shall be deemed to have requested a Revolving Loan
advance comprised solely of Base Rate Loans in the amount of such Swingline
Loans; provided, however, that any such demand shall be deemed to have been
given one Business Day prior to the Maturity Date and on the date of the
occurrence of any Event of Default described in Section 9.01(e) and upon
acceleration of the indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 9.02 (each such Revolving Loan
advance made on account of any such deemed request therefor as provided
herein being hereinafter referred to as a "Mandatory Borrowing"). Each
Lender hereby irrevocably agrees to make its pro rata share of each
Revolving Loan constituting a Mandatory Borrowing in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding
(I) the amount of Mandatory Borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder, (II)
whether any conditions specified in Section 5.02 are then satisfied, (III)
whether a Default or an Event of Default then exists, (IV) failure of any
such request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (V) whether the date of such Mandatory
Borrowing is a date on which Revolving Loans are otherwise permitted to be
made hereunder or (VI) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such Mandatory Borrowing. 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 U.S. Bankruptcy Code with
respect to the Borrower or any of its Subsidiaries), then each Lender
hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such Lender to share in
such Swingline Loans ratably based upon its Commitment Percentage of the
Revolving Committed Amount (determined before giving effect to any
termination of the Commitments pursuant to Section 9.02), provided that (A)
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
purchased and (B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be required to
pay to the Swingline Lender interest on the principal amount of
participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate equal to the Federal
Funds Effective Rate.
(c) Interest on Swingline Loans. (i) Subject to the
provisions of Section 3.01, each Swingline Loan shall bear
interest as follows:
(A)Base Rate Loans. If such Swingline Loan is a Base Rate Loan, at
a per annum rate (computed on the basis of the actual number of days
elapsed over a year of 365 days) equal to the Base Rate.
(B)Quoted Rate Swingline Loans. If such Swingline Loan is a Quoted
Rate Swingline Loan, at a per annum rate (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the Quoted
Rate applicable thereto.
Notwithstanding any other provision to the contrary set forth in this Agreement,
in the event that the principal amount of any Quoted Rate Swingline Loan is not
repaid on the last day of the Interest Period for such Loan, then such Loan
shall be automatically converted into a Base Rate Loan at the end of such
Interest Period.
(ii) Payment of Interest. The Borrower hereby promises to pay to the
Swingline Lender on each applicable Interest Payment Date (or at such other
times as may be specified herein) accrued interest on the Swingline Loans.
SECTION 2.04. Termination and Reduction of Commitments. The Borrower may
from time to time permanently reduce or terminate the aggregate Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of the lesser
of $5,000,000 or the full remaining amount of the Revolving Committed Amount)
upon three Business Days' prior written notice to the Agent; provided, however,
no such termination or reduction shall be made which would reduce the Revolving
Committed Amount to an amount less than the sum of Revolving Loans outstanding
plus Competitive Loans outstanding. The Commitments of the Lenders to make,
extend or convert Revolving Loans shall automatically terminate on the Maturity
Date. The Agent shall promptly notify each of the Lenders of receipt by the
Agent of any notice from the Borrower pursuant to this Section 2.04.
SECTION 2.05. Fees.
(a) Unused Fee. In consideration of the Revolving Committed Amount made
available by the Lenders hereunder, the Borrower agrees to pay to the Agent for
the account of the Lenders a fee (the "Unused Fee") computed at a per annum rate
for each day during the applicable Unused Fee Calculation Period (hereinafter
defined) equal to the Applicable Margin for the Unused Fee on the Unused
Revolving Committed Amount. The accrued Unused Fee shall be due and payable in
arrears on the fifteenth (15th) day of each January, April, July and October
(and on the Maturity Date and on any date that the Revolving Committed Amount is
reduced as provided in Section 2.04 or as otherwise provided herein) for the
immediately preceding fiscal quarter (or portion thereof) (each such fiscal
quarter or portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date.
(b) Agent's Fee. The Borrower agrees to pay to the Agent, for its own
account or for the account of NationsBanc Capital Markets, Inc., as applicable,
the structuring, administrative and other fees referred to in the Agent's Fee
Letter (the "Agent's Fees").
(c) Competitive Bid Request Fee. The Borrower shall pay to the Agent for
its own account, a fee of $1,000 (the "Competitive Bid Request Fee") for each
Competitive Bid Request, such fee to be payable concurrently with delivery of
such Competitive Bid Request (whether or not any Competitive Bid is offered by a
Lender, accepted by the Borrower or extended by the offering Lender pursuant
thereto).
ARTICLE III. ADDITIONAL PROVISIONS REGARDING LOANS
SECTION 3.01. Default Rate. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing hereunder or
under the other Credit Documents shall bear interest, payable on demand, at a
per annum rate 2% greater than the rate which would otherwise be applicable.
SECTION 3.02. Prepayments.
(a) Revolving Loans. The Borrower shall have the right to prepay Revolving
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (A) each such partial prepayment shall be a minimum
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (B) no Eurodollar Loan may be prepaid prior to the last day of the
Interest Period applicable thereto unless accompanied by payment of amounts
specified in Section 3.07. Amounts prepaid on the Revolving Loans may be
reborrowed in accordance with the provisions hereof.
(b) Competitive Loans. Competitive Loans may not be prepaid unless
accompanied by payment of amounts specified in Section 3.07.
(c) Swingline Loans. The Borrower shall have the right to prepay Swingline
Loans which are Base Rate Loans in whole or in part from time to time without
premium or penalty; provided, however, that each such partial prepayment shall
be a minimum principal amount of $100,000 or an integral multiple of $100,000 in
excess thereof. Swingline Loans which are Quoted Rate Swingline Loans may not be
prepaid unless accompanied by payments of amounts specified in Section 3.07.
Amounts prepaid on the Swingline Loans may be reborrowed in accordance with the
provisions hereof.
(d) Application. Amounts prepaid hereunder shall be applied to the
Revolving Loans, the Competitive Loans and the Swingline Loans as the Borrower
may elect, provided that, if the Borrower shall fail to specify its application,
prepayments shall be applied first to the Swingline Loans (and with respect to
Base Rate Loans and Quoted Rate Swingline Loans comprising such Loans, first to
Base Rate Loans and then to Quoted Rate Swingline Loans in direct order of
Interest Period maturities), second to Revolving Loans (and with respect to Base
Rate Loans and Eurodollar Loans comprising such Loans, first to Base Rate Loans
and then to Eurodollar Loans in direct order of Interest Period maturities) and
third to the Competitive Loans (in direct order of Interest Period maturities).
(e) General. All prepayments of Loans shall be subject to Section 3.07 but
otherwise without premium or penalty and shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment and all
other amounts due and payable hereunder with respect to such Loans.
SECTION 3.03. Extension and Conversion. The Borrower shall have the option,
on any Business Day, to extend existing Revolving Loans into a subsequent
Interest Period or to convert Revolving Loans into Revolving Loans of another
type; provided, however, that (i) except as provided in Section 3.06, Eurodollar
Loans may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Revolving
Loans extended as, or converted into, Eurodollar Loans shall be in such minimum
amounts as provided in Section 2.01(b) and (iv) any request for extension or
conversion of a Eurodollar Loan which shall fail to specify an Interest Period
shall be deemed to be a request for an Interest Period of one month. Competitive
Loans and Swingline Loans may not be converted or extended pursuant to this
Section 3.03. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephone notice
promptly confirmed in writing) to the Agent prior to 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan and on the third Business Day prior to, in
the case of the extension of a Eurodollar Loan as, or conversion of a Base Rate
Loan into, a Eurodollar Loan, the date of the proposed extension or conversion,
specifying the date of the proposed extension or conversion, the Revolving Loans
to be so extended or converted, the types of Loans into which such Revolving
Loans are to be converted and, if appropriate, the applicable Interest Periods
with respect thereto. Each request for extension or conversion shall constitute
a representation and warranty by the Borrower of the matters specified in
Section 5.02(b), (c) and (d). In the event the Borrower fails to request
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such conversion or extension is not permitted or required by this
Section, then such Loans shall be automatically converted into Base Rate Loans
at the end of their Interest Period. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Revolving Loan.
SECTION 3.04. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan (i) the Agent shall have determined in
good faith that dollar deposits in the principal amounts of such Eurodollar Loan
are not generally available in the London interbank market, (ii) the Agent shall
have determined in good faith that reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate or (iii) any Lender shall have
notified the Agent that such Lender shall have determined in good faith that,
with respect to any requested Eurodollar Loan for an Interest Period of one (1)
week, dollar deposits in the principal amount of such Lender's Eurodollar Loan
are not available to such Lender in the London interbank market, the Agent
shall, as soon as practicable thereafter, give telex or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination under clause (i) or (ii) above, until the Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, (A) any request by the Borrower pursuant to Section 2.01(b) for
a Eurodollar Loan shall be deemed to be a request for a Base Rate Loan and (B)
any request by the Borrower pursuant to Section 3.03 for conversion into or
extension of a Eurodollar Loan shall be deemed to be a request for conversion
into or extension of a Base Rate Loan. In the event of any such determination
under clause (iii) above, until the Agent shall have advised the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(A) any request by the Borrower pursuant to Section 2.01(b) for a Eurodollar
Loan having an Interest Period of one (1) week shall be deemed to be a request
for a Base Rate Loan and (B) any request by the Borrower pursuant to Section
3.03 for conversion into or extension of a Eurodollar Loan having an Interest
Period of one (1) week shall be deemed to be a request for conversion into or
extension of a Base Rate Loan. Each determination hereunder by the Agent or any
Lender, as applicable, shall be in good faith and shall be conclusive absent
manifest error.
SECTION 3.05. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by such Lender, or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement, such Lender's
Commitment or any Loan made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
such Loan or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
in accordance with paragraph (c) below upon demand such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender shall have determined that after the date of this
Agreement the applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards," or the adoption after
the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
any Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement, such Lender's Commitment or
any Loan made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
and the policies of such Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time the Borrower shall pay to such Lender in accordance with paragraph (c)
below such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate signed by a duly authorized officer of a Lender setting
forth such amount or amounts (including computation of such amount or amounts)
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower and the Agent, and the Borrower shall pay to such Lender, within
30 Business Days after receipt by the Borrower of such certificate delivered by
the Lender, the amount shown as due on any such certificate.
(d) Notwithstanding the foregoing, if any Lender fails to notify the
Borrower of any event that will entitle such Lender to compensation pursuant to
paragraph (a) or (b) above, as the case may be, within 90 days after such Lender
becomes aware of such event, then such Lender shall not be entitled to any
compensation from the Borrower for any increased costs or reduction in amounts
received or receivable or reduction in return on capital arising prior to the
date that is 90 days before the date on which such Lender notifies the Borrower
of such event. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed. Each determination by a Lender under this Section
3.05 shall be in good faith and shall be conclusive absent manifest error.
SECTION 3.06. Change in Legality. (a) Notwithstanding any other provision
herein, if any change in any law or regulation or in the interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by 30 days' (or such shorter period as shall be
required in order to comply with applicable law) written notice to the Borrower
and to the Agent, such Lender may:
(i)declare that Eurodollar Loans, and conversions into or
extensions of Eurodollar Loans, will not thereafter be made by such Lender
hereunder, whereupon any request by the Borrower for, or for conversion
into or extension of, a Eurodollar Loan shall, as to such Lender only, be
deemed a request for, or for conversion into or extension of, a Base Rate
Loan, unless such declaration shall be subsequently withdrawn; and
(ii)require that all outstanding Eurodollar Loans made by it be
converted to Base Rate Loans, in which event all such Eurodollar Loans
shall be automatically converted to Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 3.06, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower. Each determination by a Lender under this Section 3.06 shall be in
good faith and shall be conclusive absent manifest error.
SECTION 3.07. Indemnity. The Borrower shall indemnify each Lender against
any loss, cost or expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to borrow or to refinance,
convert or extend any Loan hereunder after notice of such borrowing,
refinancing, conversion or extension has been given pursuant to Section 2.01,
2.02, 2.03 or 3.03, or (b) any payment, prepayment or conversion by the Borrower
of a Eurodollar Loan, a Competitive Loan or a Quoted Rate Swingline Loan
required by any other provision of this Agreement or otherwise made or deemed
made on a date other than the last day of the Interest Period, if any,
applicable thereto. In the case of any such event, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to such
Lender any amounts required to compensate such Lender for any reasonable loss,
cost or expense which such Lender may incur as a result of such action or
inaction by the Borrower, including without limitation any reasonable loss, cost
or expense incurred by reason, of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Loan or proposed
Loan. Each determination by a Lender under this Section 3.07 shall be in good
faith and shall be conclusive absent manifest error.
SECTION 3.08. Mandatory Assignment; Commitment Termination. In the event
any Lender delivers to the Agent or the Borrower, as appropriate, a certificate
in accordance with Section 3.05(c) or a notice in accordance with Section 3.06,
then, provided that no Default or Event of Default has occurred and is
continuing at such time, the Borrower may, at its own expense (such expense to
include any transfer fee payable to the Agent under Section 11.04(b)), and in
its sole discretion (a) require such Lender to transfer and assign in whole or
in part, without recourse (in accordance with and subject to the terms and
conditions of Section 11.04(b)), all or part of its interests, rights and
obligations under this Agreement to an assignee which shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority and
(ii) the Borrower or such assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to the date of
such payment on the Loans made by it hereunder and all other amounts owed to it
hereunder or (b) terminate the Commitment of such Lender and prepay all
outstanding Loans of such Lender; provided that (i) such termination of the
Commitment of such Lender and prepayment of Loans does not conflict with any
law, rule or regulation or order of any court or other Governmental Authority
and (ii) the Borrower shall have paid to such Lender in immediately available
funds the principal of and interest accrued to the date of such payment on the
Loans made by it hereunder and all other amounts owed to it hereunder.
ARTICLE IV. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; U.S.
TAXES; EVIDENCE OF LOANS
SECTION 4.01. Payments and Computations. Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Agent in dollars in
immediately available funds, without offset, deduction or withholding of any
kind, at its offices at NationsBank Corporate Center, Charlotte, North Carolina
not later than 2:00 p.m. (Charlotte, North Carolina time) on the date when due.
The Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Agreement, specify to the
Agent the Loans, Fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 4.02). The Agent will thereafter
cause to be distributed promptly on the same day like funds relating to the
payment of principal or interest or Fees ratably to the Lenders entitled to
receive such payments in accordance with the terms of this Agreement. Whenever
any payment hereunder 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
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days. Interest shall
accrue from and include the date of advance, but exclude the date of payment.
SECTION 4.02. Pro Rata Treatment. Except to the extent otherwise provided
herein, each Revolving Loan, each payment or prepayment of principal of any
Revolving Loan, each payment of interest on the Revolving Loans, each payment of
Unused Fees, each reduction of the Revolving Committed Amount and each
conversion or extension of any Revolving Loan, shall be allocated pro rata among
the Lenders in accordance with their respective Commitment Percentages. With
respect to Competitive Loans, if the Borrower fails to specify the particular
Competitive Loan or Loans as to which any payment or other amount should be
applied and it is not otherwise clear as to the particular Competitive Loan or
Loans to which such payment or other amounts relate, or any such payment or
other amount is to be applied to Competitive Loans without regard to any such
direction by the Borrower, then each payment or prepayment of principal on
Competitive Loans and each payment of interest or other amount on or in respect
of Competitive Loans, shall be allocated pro rata among the relevant Competitive
Loan Lenders in accordance with the then outstanding amounts of their respective
Competitive Loans.
SECTION 4.03. Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Loan or
other obligation owing to such Lender under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
pro rata share as provided for in this Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or must
otherwise be restored, each Lender which shall have shared the benefit of such
payment shall, by repurchase of a participation theretofore sold, return its
share of that benefit (together with its share of any accrued interest payable
with respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker's lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan or
other obligation in the amount of such participation. Except as otherwise
expressly provided in this Agreement, if any Lender or the Agent shall fail to
remit to the Agent or any other Lender an amount payable by such Lender or the
Agent to the Agent or such other Lender pursuant to this Agreement on the date
when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Effective Rate.
SECTION 4.04. U.S. Taxes. (a) The Borrower agrees to pay to each Lender
that is not a U.S. Person (a "Foreign Lender") such additional amounts as are
necessary in order that the net payment of any amount due to such Foreign Lender
hereunder after deduction for or withholding in respect of any U.S. Taxes
imposed with respect to such payment (or in lieu thereof, payment of such U.S.
Taxes by such Foreign Lender), will not be less than the amount stated herein to
be then due and payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(i)to any payment to any Foreign Lender hereunder unless such
Foreign Lender is, on the date hereof (or on the date it becomes a Lender
as provided in Section 11.04(b)) and on the date of any change in the
applicable lending office of such Foreign Lender, either entitled to submit
a Form 1001 (relating to such Foreign Lender and entitling it to a complete
exemption from withholding on all interest to be received by it hereunder
in respect of the Loans) or Form 4224 (relating to all interest to be
received by such Foreign Lender hereunder in respect of the Loans); and any
Foreign Lender that is, on the date hereof (or on the date that it becomes
a Lender as provided in Section 11.04(b)) and on the date of any change in
its applicable lending office, entitled to submit a Form 1001 or a Form
4224 will submit such Form in duplicate to the Borrower, with a copy to the
Agent at such time; or
(ii)to any U.S. Tax imposed solely by reason of the failure by
such Foreign Lender to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity, or connections with the United States of America of
such Foreign Lender if such compliance is required by statute or regulation
of the United States of America as a precondition to relief or exemption
from such U.S. Taxes.
For the purposes of this Section 4.04(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), (y) "U.S. Person" shall mean a citizen, national or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United States of
America, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof or
herein.
(b) Within thirty (30) days after paying any amount to the Agent or any
Foreign Lender from which it is required by law to make any deduction or
withholding, and within thirty (30) days after it is required by law to remit
such deduction or withholding to any relevant taxing or other authority, the
Borrower shall deliver to the Agent for delivery to such Foreign Lender evidence
satisfactory to such Foreign Lender of such deduction, withholding or payment
(as the case may be).
SECTION 4.05. Evidence of Loans. (a) Each Lender shall maintain an account
or accounts evidencing each Loan made by such Lender to the Borrower from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement. Each Lender will make
reasonable efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain a register and a subaccount for each Lender,
in which register and subaccounts (taken together) shall be recorded (i) the
amount, type and Interest Period of each Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
from or for the account of the Borrower and each Lender's share thereof. The
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, register and subaccounts maintained
pursuant to paragraphs (a) and (b) of this Section 4.05 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Agent to maintain any such account, such
register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.01. Conditions to Initial Loans. The obligation of each Lender
to make its initial Loans is subject to the satisfaction of the following
conditions on or prior to the Closing Date:
(a) The Agent shall have received counterparts hereof signed by
each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received in form satisfactory to it telegraphic, facsimile, telex or other
written confirmation from such party of execution of a counterpart hereof
by such party);
(b) There shall not have occurred since September 30, 1995, any
material adverse change with respect to the consolidated financial
condition of the Borrower except as otherwise disclosed on Schedule 9;
(c) There shall not exist any action, suit or proceeding, pending
or threatened, in which there is a reasonable possibility of an adverse
decision, which would materially adversely affect the ability of the
Borrower to perform its obligations under the Credit Documents or the
ability of the Lenders to exercise their rights thereunder;
(d)The Agent and each Lender shall have received a legal opinion
of R. W. Lockwood, Esq., General Counsel of the Borrower, dated as of the
Closing Date and substantially in the form of Schedule 6;
(e) The Agent and each Lender shall have received a legal opinion
of Moore & Van Allen, PLLC, counsel to the Agent, dated as of the Closing
Date and substantially in the form of Schedule 7;
(f) The Agent shall have received all documents it may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of each of the Credit Documents, and any other matters
relevant hereto, all in form and substance reasonably satisfactory to the
Agent;
(g) The representations and warranties set forth in Article VI
shall be true and correct in all material respects as of the Closing Date;
(h) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(i) The Agent shall have received satisfactory evidence that
Guaranties with respect to those 8-3/4% Notes due September 15, 2004 issued
by the Borrower shall, contemporaneously with the termination of the
Existing Credit Agreement in accordance with the terms of Section 11.03, be
of no further force or effect; and
(j) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the Agent.
SECTION 5.02. Each Loan. The obligation of each Lender to make, convert or
extend any Loan (including the obligation of the Swingline Lender to make any
Swingline Loan) is subject to satisfaction of the following conditions in
addition to satisfaction on the Closing Date of the conditions set forth in
Section 5.01:
(a) (i) In the case of any Revolving Loan, the Agent shall have
received an appropriate Notice of Borrowing or Notice of
Extension/Conversion; (ii) in the case of any Competitive Loan, the
applicable Competitive Loan Lender shall have received an appropriate
notice of acceptance of its related Competitive Bid; and (iii) in the case
of any Swingline Loan, the Swingline Lender shall have received an
appropriate notice of borrowing in accordance with the provisions of
Section 2.03(b)(i);
(b) The representations and warranties set forth in Article VI shall be
true and correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) There shall not have been commenced against the Borrower an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Borrower or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded; and
(d) No Default or Event of Default shall exist and be continuing either
prior to or after giving effect thereto.
The delivery of each Notice of Borrowing and each Notice of
Extension/Conversion, each request for a Competitive Bid pursuant to a
Competitive Bid Request and each request for a Swingline Loan pursuant to
Section 2.03(b)(i) shall constitute a representation and warranty by the
Borrower of the correctness of the matters specified in subsections (b), (c) and
(d) above.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Lender that:
SECTION 6.01. Corporate Organization and Validity. (a) The Borrower and
each of its Material Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Borrower and its Material Subsidiaries is duly
qualified, is validly existing and in good standing and has lawful power and
authority to engage in the business it conducts in each jurisdiction where it
conducts its business, except where the failure to so qualify, exist, be in good
standing or have power and authority to conduct such business would not have a
Material Adverse Effect.
(b) The execution, delivery and performance of the Credit Documents will
not violate any law, government rule or regulation, any judgment, injunction,
order or decree binding upon the Borrower or the charter, minutes or bylaw
provisions of the Borrower or violate or result in a default (immediately or
with the passage of time or upon the giving of notice or both) under any
contract, agreement, or instrument to which any of the Borrower or its Material
Subsidiaries is a party, or by which it is bound. Neither the Borrower nor any
of its Material Subsidiaries is in violation of any terms of any agreement,
instrument, judgment, injunction, order or decree to which it is a party or by
which it may be bound or of its charter, minutes or its bylaws, which violation
could have a Material Adverse Effect.
(c) The Borrower has all requisite corporate power and authority to enter
into and perform the Credit Documents and to incur the obligations herein and
therein provided for, and has taken all proper and necessary corporate action to
authorize the execution, delivery and performance of the Credit Documents.
(d) Each Credit Document has been duly executed and delivered and is a
legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms (subject to bankruptcy, insolvency,
moratorium or other laws and equitable principles relating to or affecting
creditors' rights generally).
SECTION 6.02. Pending Litigation. There have been no judgments issued
against and there are no judicial, administrative or arbitration orders, awards
or proceedings pending, or to the knowledge of the Borrower, threatened against
or affecting the Borrower or any of its Subsidiaries in any court or before any
governmental authority or arbitration board or tribunal which may have a
Material Adverse Effect, except as shown on Schedule 8. Neither the Borrower nor
any of its Subsidiaries is in default with respect to any order of any court,
governmental authority, regulatory agency or arbitration board or tribunal,
which default would have a Material Adverse Effect.
SECTION 6.03. Title to Properties. Each of the Borrower and its
Subsidiaries has good and marketable title (or its equivalent under applicable
law) to all the Property it purports to own which is material to the operation
of its business, free from Liens and the claims of any third party, except for
Permitted Liens.
SECTION 6.04. Patents and Trademarks. Each of the Borrower and its
Subsidiaries owns or has the right to use all of the material patents, patent
applications, trademarks, trademark registrations, trademark applications,
service marks, service mark registrations, service mark applications, trade
names, trade name registrations, trade name applications, copyrights, copyright
registrations, copyright applications, franchises, licenses and rights with
respect to the foregoing necessary for the present conduct of its business,
without any known conflict with the rights of others, excluding conflicts that
are not reasonably expected to have a material adverse effect on the
consolidated financial condition of the Borrower.
SECTION 6.05. Governmental Consent. No consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority on
the part of the Borrower is required in conjunction with the execution, delivery
or performance of the Credit Documents.
SECTION 6.06. Taxes. All tax returns required to be filed by the Borrower
or any of its Subsidiaries in any jurisdiction have in fact been filed, and all
taxes, assessments, fees and other governmental charges upon any such member, or
upon any of its Property, income or franchises, which are due and payable have
been paid, except for those taxes being contested in good faith with due
diligence by appropriate proceedings for which appropriate reserves have been
maintained under GAAP. The Borrower is not aware of any proposed tax assessments
against it or any of its Subsidiaries, the payment of which could reasonably be
expected to have a material adverse effect on the consolidated financial
condition of the Borrower.
SECTION 6.07. Financial Statements. The consolidated balance sheet of the
Borrower and its Subsidiaries at September 30, 1995, and the related statements
of earnings and retained earnings for each of the three fiscal year periods then
ended, all accompanied by unqualified reports thereon from Price Waterhouse
(complete copies of which have been delivered to each of the Lenders), have been
prepared in accordance with GAAP and present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as of such
date and the results of the consolidated operations of the Borrower and its
Subsidiaries for each such period. The unaudited consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries at December 31, 1995, and
the related statements of earnings and retained earnings for the nine months
then ended (complete copies of all of which have been delivered to each of the
Lenders), have been prepared in accordance with GAAP and present fairly in all
material respects the consolidated and consolidating financial condition of the
Borrower and its Subsidiaries as of such date and the result of its consolidated
and consolidating operations for such period, subject to changes resulting from
normal year-end audit adjustments. Except as otherwise permitted by Section
8.09, the fiscal year of the Borrower and each of its Subsidiaries ends on
September 30. As of the Closing Date, there has been no material adverse change
since September 30, 1995, with respect to the consolidated financial condition
of the Borrower except as otherwise disclosed on Schedule 9.
SECTION 6.08. Full Disclosure. None of the financial statements referred to
in Section 6.07 contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein or
herein not misleading.
SECTION 6.09. Funded Indebtedness. Neither the Borrower nor any of its
Subsidiaries has any Funded Indebtedness except (i) as disclosed in the
financial statements referenced in Section 6.07 or (ii) as permitted by
Section 8.01.
SECTION 6.10. Affiliates and Subsidiaries. (a) Set forth in Schedule 10
is a complete and accurate list as of the Closing Date of all Affiliates of the
Borrower or any of its Subsidiaries.
(b) Set forth in Schedule 11 is a complete and accurate list as of the
Closing Date of all direct and indirect Subsidiaries of the Borrower.
SECTION 6.11. Governmental Regulations, Etc.. (a) The use of the Loans or
the proceeds thereof by the Borrower, will not directly or indirectly violate or
result in a violation of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation U, G, T or X. The Borrower does not own or intend to
carry or purchase any "margin security" within the meaning of said Regulations.
(b) Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, neither the Borrower nor any of its Subsidiaries
is (i) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(c) No director, executive officer or principal shareholder of the Borrower
is a director, executive officer or principal shareholder of any Lender, except
for W. P. Stiritz, who is a director of The Boatman's National Bank. For the
purposes hereof the terms "director", "executive officer" and "principal
shareholder" (when used with reference to any Lender) have the respective
meanings assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has obtained all material
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its respective Property and to the conduct of its business, the
absence of which would likely have a material adverse effect on the consolidated
financial condition of the Borrower.
(e) Neither the Borrower nor any of its Subsidiaries is in material
violation of any applicable statute, regulation or ordinance of the United
States of America, or of any state, city, town, municipality, county or any
other jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations).
(f) Each of the Borrower and its Subsidiaries is current with all reports
and documents, if any, required to be filed with any state or federal securities
commission or similar agency and is in full compliance in all material respects
with all applicable rules and regulations of such commissions.
SECTION 6.12. Environmental Matters. The Borrower has no knowledge after
reasonable inquiry, except as disclosed on Schedule 12, of any spills, releases,
discharges or disposals of Hazardous Substances (as defined herein) by the
Borrower, any of its Subsidiaries or any third party that have occurred or are
currently occurring on any of the real property on which the Borrower or any of
its Subsidiaries conducts its business in a quantity in excess of the current
reportable quantity established pursuant to any applicable environmental
statute, rule or regulation of any Governmental Authority currently in effect
that could result in any liability of the Borrower or any of its Subsidiaries
under such law and that could reasonably be expected to have a material adverse
effect on the consolidated financial condition of the Borrower. As used herein,
the term "Hazardous Substances" with respect to a real property means any
substance defined or designated as hazardous or toxic waste, hazardous or toxic
material, hazardous or toxic substance or similar term, by any environmental
statute, rule or regulation of any Governmental Authority currently in effect
and applicable to such real property.
SECTION 6.13. Solvency. As of the Closing Date after giving
effect to all transactions contemplated by the Credit Documents to occur on such
date, the Borrower is Solvent.
SECTION 6.14. ERISA. (a) (i) No steps have been taken or proceedings have
been instituted, or, to the knowledge of the Borrower, planned, to terminate any
Plan where such termination could give rise to any liability under Title IV of
ERISA and no contribution failure has occurred with respect to any Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA and (ii) neither
the Borrower, any of its Material Subsidiaries nor any ERISA Affiliate has
withdrawn or instituted steps to withdraw from any Multiemployer Plan, which
withdrawal has resulted or could result in the incurrence by the Borrower or any
of its Material Subsidiaries of liability that could reasonably be expected to
have a material adverse effect on the consolidated financial condition of the
Borrower.
(b) The Borrower has no knowledge of any circumstances likely to cause the
PBGC to institute steps to terminate any Material Plans. No condition exists or
event or transaction has occurred in connection with any Plan which could result
in the incurrence by the Borrower or any of its Material Subsidiaries of any
liability, fine or penalty that could reasonably be expected to have a material
adverse effect on the consolidated financial position of the Borrower.
ARTICLE VII. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Agreement is
in effect or any Loans or any other amounts payable hereunder shall remain
outstanding, and until all of the Commitments hereunder shall have terminated:
SECTION 7.01. Information Covenants. The Borrower will furnish, or cause
to be furnished, to the Agent and each Lender:
(a)Annual Financial Statements. As soon as available and in any
event within 95 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year together with related consolidated
statements of income and retained earnings and of cash flows for such
fiscal year, setting forth in comparative form consolidated figures as
of the end of and for the preceding fiscal year, all in reasonable
detail and examined by Price Waterhouse, or other independent certified
public accountants of recognized national standing acceptable to the
Required Lenders and whose opinion shall be to the effect that such
consolidated financial statements have been prepared in accordance
with GAAP (except for changes with which such accountants concur) and shall
not be qualified as to the scope of the audit or as to the status of the
Borrower or any of its Subsidiaries as a going concern. It is
specifically understood and agreed that failure of the annual financial
statements to be accompanied by an opinion of such accountants in form
and substance as provided herein or by a certificate of such accountants as
referred to in paragraph (d) below shall constitute a Default.
(b)Quarterly Financial Statements. As soon as available and in
any event within 50 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, an unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
quarterly period together with related consolidated statements of income
and of cash flows for such quarterly period and for the portion of the
fiscal year ending with such period, in each case setting forth in
comparative form unaudited consolidated figures for the corresponding date
or period of the preceding fiscal year, all in reasonable form and detail
acceptable to the Required Lenders, and accompanied by a certificate of the
chief financial officer, controller or treasurer of the Borrower as having
been prepared in accordance with GAAP and as presenting fairly in all
material respects the consolidated financial condition of the Borrower and
its Subsidiaries as of the date of such financial statements, subject to
changes resulting from audit and normal year-end audit adjustments.
(c)Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of the chief financial officer, controller or treasurer of the
Borrower substantially in the form of Schedule 13 to the effect that the
Borrower is in substantial compliance with the terms of this Agreement and
that no Default or Event of Default exists, or if any Default or Event of
Default does exist specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto. In addition, such
certificate shall demonstrate compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period.
(d)Accountant's Certificate. Within the period for delivery of
the annual financial statements provided in Section 7.01(a), a certificate
of the accountants conducting the annual audit stating that in the course
of its regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted in accordance with generally accepted auditing
standards (including tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances),
they have reviewed this Agreement and they have obtained no knowledge of
any violation of any of the financial covenants set forth in Section 7.11
or, if in the opinion of such accounting firm such a violation has occurred
and is continuing, a statement as to the nature thereof, all of the
foregoing to be in reasonable detail and in form and substance satisfactory
to the Required Lenders.
(e)SEC and Other Reports. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the
Securities and Exchange Commission, or any successor agency, by the
Borrower or any of its Subsidiaries, and copies of all financial
statements, proxy statements, notices and reports as the Borrower or its
Subsidiaries shall send to its shareholders or to the holders of any other
Funded Indebtedness in their capacity as such holders.
(f)Other Information. With reasonable promptness upon any such
request, such other information not otherwise required to be delivered by
any other provision of this Agreement regarding the business, properties or
financial condition of the Borrower and its Subsidiaries as the Agent or
the Required Lenders may reasonably request (any such information being
collectively referred to for purposes of this paragraph (f) as "Additional
Information"); provided, however, that if the Borrower reasonably believes
that any material interests of the Borrower or any of its Subsidiaries
relating to any such Additional Information which is non-public,
confidential or proprietary in nature are not adequately protected in
connection with the delivery of such Additional Information to the Agent
and the Lenders by any then existing confidentiality agreements entered
into by the Agent and the Lenders with respect to the Borrower and its
Subsidiaries, then the Borrower shall not be required to deliver such
Additional Information pursuant to this paragraph (f) until the Agent and
the Lenders shall have executed an additional confidentiality agreement
regarding such Additional Information in form and substance mutually
satisfactory to the Borrower and the Lenders.
(g)Notice of Default or Litigation. Upon the Borrower obtaining
knowledge thereof, written notice to the Agent and the Lenders (i)
immediately, of the occurrence of an event or condition consisting of a
Default or Event of Default, specifying the nature and existence thereof
and what action the Borrower proposes to take with respect thereto, and
(ii) promptly, but in any event within five (5) Business Days, of the
occurrence of any of the following with respect to the Borrower or any of
its Subsidiaries which are, individually or collectively, likely to have a
Material Adverse Effect: (A) the pendency or commencement of any
litigation, arbitral or governmental proceedings against the Borrower or
any of its Subsidiaries, (B) any one or more levies of an attachment,
executions or other processes against any Property of the Borrower or any
of its Subsidiaries, (C) the occurrence of an event or condition which
shall constitute a default or event of default with respect to any Funded
Indebtedness of the Borrower or any of its Subsidiaries (other than Funded
Indebtedness outstanding under this Agreement and the other Credit
Documents) or (D) any notice or determination concerning the imposition of
any withdrawal liability by a Multiemployer Plan against the Borrower, any
of its Material Subsidiaries or any ERISA Affiliate.
SECTION 7.02. Preservation of Existence and Franchises. Except as otherwise
permitted under Section 8.04, the Borrower 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, rights, franchises and authority,
unless the failure to do so is not likely to have a Material Adverse Effect.
SECTION 7.03. Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep books and records of its transactions in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves). The Borrower will, and
will cause each of its Subsidiaries to, permit on reasonable notice officers or
designated representatives of the Agent to visit and inspect its books of
account and records and any of its properties or assets (in whomever's
possession) up to 2 times during each calendar year and to permit the Agent to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with, and be advised as to the same by, its and their officers, directors and
independent accountants; provided, however, that if the Borrower reasonably
believes that any material interests of the Borrower or any of its Subsidiaries
relating to any non-public, confidential or proprietary information which could
become available to the Agent during the course of such inspections or such
discussions are not adequately protected by any then existing confidentiality
agreements entered into by the Agent and the Lenders with respect to the
Borrower and its Subsidiaries, then the Agent shall not be entitled to make any
such inspections or to have any such discussions, as the case may be, pursuant
to this Section 7.03 until the Agent and the Lenders shall have executed an
additional confidentiality agreement regarding such non-public, confidential or
proprietary information in form and substance mutually satisfactory to the
Borrower and the Lenders.
SECTION 7.04. Compliance with Law. The Borrower will, and will cause each
of its Subsidiaries to, comply in all material respects with all laws, rules,
regulations and orders of, and all restrictions imposed by, any Governmental
Authority, applicable to it or its Subsidiaries or its or their Property, the
violation of which is likely to have a Material Adverse Effect.
SECTION 7.05. Payment of Taxes and Other Claims. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge (i) all material
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income or profits, or upon any of its Property, before they shall become
delinquent and (ii) all material lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien or charge
upon any of its Property; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP.
SECTION 7.06. Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice for
consumer food companies with similar sales and profits.
SECTION 7.07. Maintenance of Property. The Borrower will, and will cause
each of its Subsidiaries to, maintain and preserve its material properties and
equipment used or useful in its business (in whomsoever's possession as they may
be) in good repair, working order and condition, normal wear and tear excepted,
and will make, or cause to be made, in such properties and equipment from time
to time all repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses, unless the failure to do
so is not likely to have a material adverse effect on the conduct of the
operations of the Borrower and its Subsidiaries taken as a whole.
SECTION 7.08. Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound, unless the failure to do so is not likely to have a material
adverse effect on the conduct of the operations of the Borrower and its
Subsidiaries taken as a whole.
SECTION 7.09. ERISA. The Borrower will, and will cause each of its
Subsidiaries to, at all times, make prompt payment when due of all contributions
required under all Plans and required to meet the minimum funding standard set
forth in ERISA with respect to its Plans. The Borrower will not, nor will it
permit any of its Subsidiaries or ERISA Affiliates to, (i) terminate a Plan or
withdraw from any Multiemployer Plan or (ii) cause or permit to exist any
condition under Section 4.02(a) of ERISA or other event or condition which
presents a material risk of termination of a Plan at the request of the PBGC,
the result of which would be to cause the Borrower and its Subsidiaries to incur
a present liability which would result in the occurrence of a Default under
Section 9.01(f).
SECTION 7.10. Use of Proceeds. The proceeds of the Loans hereunder shall be
used, subject to the terms of Section 8.05 and Section 8.07, to refinance
existing indebtedness of the Borrower under the Existing Credit Agreement and
for the working capital and the general corporate purposes (including, without
limitation, acquisitions) of the Borrower and its Subsidiaries.
SECTION 7.11. Financial Covenants.
(a) Consolidated Debt Coverage Ratio. The Borrower shall cause the
Consolidated Debt Coverage Ratio at each Calculation Date to be no greater than
3.25 to 1.00.
(b) Consolidated Interest Coverage Ratio. The Borrower shall cause the
Consolidated Interest Coverage Ratio at each Calculation Date to be no less than
3.00 to 1.00.
(c) Consolidated Net Worth. The Borrower shall cause Consolidated Net
Worth at all times to be no less than $105,000,000.
SECTION 7.12. Domestic Revenues. The Borrower shall cause the majority of
revenues of the Borrower and its consolidated Subsidiaries for all periods
subsequent to the Closing Date to be generated by Property owned or held by one
or more of the Borrower and its Domestic Subsidiaries.
ARTICLE VIII. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Agreement is
in effect or any Loans or any other amounts payable hereunder shall remain
outstanding, and until all of the Commitments hereunder shall have terminated:
SECTION 8.01. Funded Indebtedness. The Borrower will not, nor will it
permit any of its Subsidiaries to, contract, create, incur, assume or permit to
exist any Funded Indebtedness, except:
(a)Funded Indebtedness arising under this Agreement and the other
Credit Documents;
(b)Funded Indebtedness existing as of the Closing Date and
disclosed in the financial statements referenced in Section 6.07 (and
renewals, refinancings or extensions thereof on terms and conditions no
less favorable to the applicable obligor than such existing Funded
Indebtedness and in a principal amount not in excess of that outstanding as
of the date of such renewal, refinancing or extension);
(c)Funded Indebtedness incurred or arising under or in connection
with Permitted Liens;
(d)purchase money Funded Indebtedness (including Capital Leases)
hereafter incurred by the Borrower or any of its Subsidiaries to finance
the purchase of fixed assets provided that (i) the total of all such Funded
Indebtedness for the Borrower and its Subsidiaries shall not exceed an
aggregate principal amount of $50,000,000 at any time outstanding; (ii)
such Funded Indebtedness when incurred shall not exceed the purchase price
of the assets financed; and (iii) no such Funded Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(e)obligations of the Borrower or any of its Subsidiaries in
connection with sales of receivables permitted by subsection (b)(iii) of
Section 8.04, to the extent such obligations constitute Funded
Indebtedness; and
(f)in addition to the Funded Indebtedness otherwise permitted by
this Section 8.01, other Funded Indebtedness hereafter incurred by the
Borrower provided that (A) the loan documentation with respect to such
Funded Indebtedness shall not contain covenants or default provisions
relating to the Borrower that are more restrictive than the covenants and
default provisions contained in the Credit Documents and (B) on the date of
incurrence of such Funded Indebtedness after giving effect on a Pro Forma
Basis to the incurrence of such Funded Indebtedness and to the concurrent
retirement of any other Funded Indebtedness of the Borrower or any of its
consolidated Subsidiaries, no Default or Event of Default would exist
hereunder.
SECTION 8.02. Liens. The Borrower will not, nor will in permit any of its
Subsidiaries to, contract for, create, incur, assume or permit to exist any Lien
with respect to any of its Property, whether now owned or after acquired, except
for Permitted Liens.
SECTION 8.03. Nature of Business. The Borrower will not, nor will it permit
any of its Subsidiaries to, engage in any business other than consumer product
businesses, coupon and promotion businesses, all seasons resort businesses,
other businesses related to the existing businesses of the Borrower and its
Subsidiaries as of the Closing Date and any other business reasonably acceptable
to the Required Lenders.
SECTION 8.04. Consolidation, Merger, Sale or Purchase of Assets, etc..
The Borrower will not, nor will it permit any of its Subsidiaries to:
(a) dissolve, liquidate or wind up its affairs, or enter into any
transaction of merger or consolidation; provided, however, that, so long as no
Default or Event of Default would be directly or indirectly caused as a result
thereof, (i) the Borrower may merge or consolidate with any of its Subsidiaries
provided that the Borrower is the surviving corporation; (ii) any Domestic
Subsidiary of the Borrower may merge or consolidate with any other Domestic
Subsidiary of the Borrower; (iii) any Domestic Subsidiary of the Borrower may
merge or consolidate with any Person that is not a Domestic Subsidiary of the
Borrower provided that (A) such Domestic Subsidiary is the surviving corporation
and (B) after giving effect to such merger or consolidation and after giving
effect on a Pro Forma Basis to such merger or consolidation, no Default or Event
of Default would exist hereunder; (iv) any Subsidiary of the Borrower that is
not a Domestic Subsidiary of the Borrower may merge or consolidate with any
other Person that is not a Domestic Subsidiary of the Borrower provided that
after giving effect to such merger or consolidation and after giving effect on a
Pro Forma Basis to such merger or consolidation, no Default or Event of Default
would exist hereunder; and (v) any wholly-owned Subsidiary of the Borrower may
dissolve, liquidate or wind up its affairs;
(b) sell, lease, transfer or otherwise dispose of any Property (including
without limitation pursuant to any sale/leaseback transaction) other than (i)
the sale of inventory in the ordinary course of business for fair consideration,
(ii) the sale or disposition of machinery and equipment no longer used or useful
in the conduct of such Person's business, (iii) the sale of receivables by the
Borrower or any of its Subsidiaries as part of any Permitted Receivables
Financings, (iv) the contribution by Ralston Resorts, Inc. of certain
undeveloped real estate located in or around Summit County, Colorado and having
a book value not to exceed $25,000,000 to a joint venture of which Ralston
Resorts, Inc. or one of its Subsidiaries is an equity owner and (v) subject to
the terms of Section 8.05, other sales or dispositions, provided that (A) after
giving effect to such sale or other disposition, the aggregate book value of
assets sold or otherwise disposed of pursuant to this clause (v) since the
Closing Date does not exceed the majority of Consolidated Total Assets as of the
most recent fiscal year end preceding the date of such sale or other disposition
with respect to which the Agent shall have received the Required Financial
Information and (B) after giving effect to such sale or other disposition and
after giving effect on a Pro Forma Basis to such sale or other disposition, no
Default or Event of Default would exist hereunder;
(c) except as otherwise permitted under Section 8.07, acquire all or any
substantial part of the capital stock or securities of any other Person or
purchase, lease or otherwise acquire (in a single transaction or a series of
related transactions) all or any substantial part of the Property of any other
Person; provided that, subject to the terms of Section 8.05, the Borrower or any
of its Subsidiaries shall be permitted to make acquisitions of the type referred
to in this Section 8.04(c) provided that (i) after giving effect to such
acquisition and after giving effect on a Pro Forma Basis to any such acquisition
(including but not limited to any Funded Indebtedness to be incurred or assumed
by the Borrower or any of its Subsidiaries in connection therewith), no Default
or Event of Default would exist hereunder and (ii) the aggregate amount of the
cash portion of purchase prices paid for all acquisitions of Foreign
Subsidiaries of the Borrower made pursuant to this Section 8.04(c) since the
Closing Date, together with the aggregate amount of Investments in Foreign
Subsidiaries of the Borrower made pursuant to Section 8.07 and clause (iv)(B) of
the definition of "Permitted Investments" set forth in Section 1.01 and the
aggregate amount of transfers to Foreign Subsidiaries of the Borrower made
pursuant to Section 8.05(c), does not exceed 5% of Consolidated Total Assets as
of the most recent fiscal year end preceding the date of such transfer with
respect to which the Agent shall have received the Required Financial
Information; or
(d) with respect to the Borrower or any Person which is a Domestic
Subsidiary of the Borrower, take any action in furtherance of causing such
Person not to be incorporated or organized under the laws of any State of the
United States or the District of Columbia.
SECTION 8.05. Transactions with Affiliates. The Borrower will not, nor will
it permit any of its Subsidiaries to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (a) advances by the Borrower
or any of its Subsidiaries of working capital to (i) any Domestic Subsidiary of
the Borrower or (ii) any other Subsidiary or any partnership or joint venture in
which the Borrower or any of its Subsidiaries is an equity owner, provided that
(A) such advances are necessary to meet the working capital needs of such
Subsidiary, partnership or joint venture and such transfer will not impair the
Borrower's operations or its ability to meet its obligations, (B) to the extent
made with proceeds of any Loans hereunder, such advances shall not be applied to
any Long Term Debt of such Subsidiary, partnership or joint venture and (C) the
aggregate amount of such advances at any time outstanding for all Subsidiaries,
partnerships and joint ventures shall not exceed $25,000,000, (b) transfers of
cash and assets to any Domestic Subsidiary of the Borrower, (c) transfers of
cash and assets to any Foreign Subsidiary of the Borrower, provided that after
giving effect to any such transfer the aggregate amount of cash and assets
(valued at book value) transferred pursuant to this clause (c) since the Closing
Date, together with the aggregate amount of Investments in Foreign Subsidiaries
of the Borrower made pursuant to Section 8.07 and clause (iv)(B) of the
definition of "Permitted Investments" set forth in Section 1.01 and the
aggregate amount of the cash portion of purchase prices paid for acquisitions of
Foreign Subsidiaries of the Borrower made pursuant to Section 8.04(c), does not
exceed 5% of Consolidated Total Assets as of the most recent fiscal year end
preceding the date of such transfer with respect to which the Agent shall have
received the Required Financial Information, (d) transactions permitted by
Section 8.07, (e) normal compensation and reimbursement of expenses of officers
and directors and (f) except as otherwise specifically limited in this
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length
transactions with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
SECTION 8.06. Dividends. (i) The Borrower will not declare or pay any
Dividends (other than Dividends payable solely in the same class of capital
stock of the Borrower) if at the time thereof a Default or Event of Default has
occurred and is continuing or a Default or Event of Default would be directly or
indirectly caused as a result of the declaration or payment of such Dividend.
(ii) The Borrower will not permit any of its Subsidiaries to declare or pay
any Dividends (other than Dividends payable solely in the same class of capital
stock of such Person), except that any Subsidiary of the Borrower may declare or
pay Dividends with respect to any shares of its capital stock held by the
Borrower or any of its Subsidiaries.
SECTION 8.07. Advances, Investments, Loans, etc.. The Borrower will not,
nor will it permit any of its Subsidiaries to, make Investments in or to any
Person, except for Permitted Investments.
SECTION 8.08. No Dividend Restrictions. The Borrower will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to: (a) pay
dividends or make any other distribution on any of such Person's capital stock,
(b) subject to subordination provisions, pay any indebtedness owed to the
Borrower or any of its Subsidiaries, (c) make loans or advances to the Borrower
or any of its Subsidiaries or (d) transfer any of its Property to the Borrower
or any of its Subsidiaries.
SECTION 8.09. Fiscal Year. Without giving prior written notice thereof to
the Agent, the Borrower will not change, or permit a change, in the fiscal year
for it and its Subsidiaries on a consolidated basis.
ARTICLE IX. EVENTS OF DEFAULT
SECTION 9.01. Events of Default. Each of the following shall be an event
of default (each an "Event of Default") hereunder:
(a) Payment. The Borrower shall
(i) default in the payment when due of any principal of
any of the Loans, or
(ii) default, and such default shall continue for five (5) or
more days, in the payment when due of any interest on the Loans, or of any
Fees or other amounts owing hereunder, under any of the other Credit
Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by the Borrower herein, in any of the other Credit Documents,
or in any written statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material respect on the
date as of which it was made or deemed to have been made or delivered; or
(c) Covenants. The Borrower shall
(i)default in the due performance or observance of any term,
covenant or agreement contained in Section 7.02, 7.10 or 7.11 or Sections
8.01 through Section 8.09, inclusive and such default shall continue
unremedied for a period of at least ten (10) days after the earlier of an
officer of the Borrower becoming aware of such default or notice thereof by
the Agent, or
(ii)default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsection (a), (b)
or (c)(i) of this Section 9.01) contained in this Agreement and such
default shall continue unremedied for a period of at least thirty (30) days
after the earlier of an officer of the Borrower becoming aware of such
default or notice thereof by the Agent; or
(d) Bankruptcy Event. Any Bankruptcy Event shall occur with respect to
the Borrower or any of its Subsidiaries; or
(e) Defaults Under Other Agreements; Judgments; ERISA. If at any time,
(i) the aggregate amount of
(A) Funded Indebtedness of the Borrower or any of its
Subsidiaries (other than Funded Indebtedness outstanding under this
Agreement and the other Credit Documents), (1) with respect to which there
has occurred (I) a default in any payment (beyond the applicable grace
period with respect thereto, if any) or (II) a default in the observance or
performance relating to such Funded Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event or condition, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such Funded
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Funded Indebtedness to become due prior to its stated
maturity; or (2) which shall have been declared due and payable, or
required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof;
plus
(B) the amount of liability with respect to any judgments or
decrees which shall have been entered against the Borrower or any of its
Subsidiaries and not paid or fully covered by insurance provided by a
carrier who has acknowledged coverage or not vacated, paid, discharged or
stayed or bonded pending appeal within forty-five (45) days from the entry
thereof;
plus
(C) (1) the aggregate amount which the Borrower or any member of
the Controlled Group shall have failed to pay when due under Title IV of
ERISA, (2) the unfunded liabilities under any Plans with respect to which a
notice of intent to terminate has been filed by the Borrower or any member
of the Controlled Group, any Plan administrator or any combination of the
foregoing, (3) the unfunded liabilities of any Plans with respect to which
(I) the PBGC shall have instituted proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007
of ERISA) in respect of or to cause a trustee to be appointed to administer
or (II) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that such Plans must be
terminated, and (4) the current payment obligations which likely have been
incurred by one or more members of the Controlled Group as a result of a
complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer
Plans,
shall exceed (ii) $50,000,000; or
(f) Ownership. There shall occur a Change of Control.
SECTION 9.02. Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived by the Lenders or cured to the satisfaction of the Lenders (pursuant
to the voting procedures in Section 11.08), the Agent, upon the request of the
Required Lenders, shall, by written notice to the Borrower, take any of the
following actions without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for herein:
(i)Termination of Commitments. Declare the
Commitments terminated whereupon the Commitments shall be
immediately terminated.
(ii)Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, all accrued and unpaid Fees and
other indebtedness or obligations of any and every kind owing by the
Borrower to any of the Lenders hereunder to be due whereupon the same shall
be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
(iii)Enforcement of Rights. Enforce any and all rights
and interests created and existing under the Credit
Documents and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.01(d) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations of any and every kind owing by the Borrower to
any of the Lenders hereunder automatically shall immediately become due and
payable without the giving of any notice or other action by the Agent.
ARTICLE X. AGENT
SECTION 10.01. Appointment and Authorization. Each Lender hereby
irrevocably appoints and authorizes the Agent to take such action on its behalf
and to exercise such powers under this Agreement and the other Credit Documents
as are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto.
SECTION 10.02. General Immunity. In performing its duties to the
Lenders as Agent hereunder, the Agent will take the same care as it takes in
connection with credit transactions in which it alone is interested. However,
neither the Agent nor any of its directors, officers, agents or employees shall
be liable to the Lenders for any action taken or omitted to be taken by it or
them hereunder or in connection herewith except for its own or their own gross
negligence or willful misconduct.
SECTION 10.03. Consultation with Professionals. The Agent may consult with
legal counsel and other professionals selected by it and shall not be liable to
the Lenders for any action taken or suffered in good faith by it in accordance
with the advice of such counsel and professionals in their respective areas of
expertise.
SECTION 10.04. Documents. The Agent shall not be under any duty to examine
or pass upon the effectiveness, genuineness or validity of this Agreement or any
of the other Credit Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, and the Agent shall be entitled to
assume that the same are valid, effective and genuine and what they purport to
be.
SECTION 10.05. Rights as a Lender. With respect to its Commitment, the
Agent shall have the same rights and powers hereunder as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall, as applicable and unless the context 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 or trust
business with the Borrower or any of its Subsidiaries as if it were not the
Agent.
SECTION 10.06. Responsibility of Agent. It is expressly understood and
agreed that the obligations of the Agent hereunder to the Lenders are only those
expressly set forth in this Agreement and the other Credit Documents and that
the Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing unless the Agent has actual knowledge of such fact or
has received notice from a Lender or the Borrower that such Lender or the
Borrower considers that a Default or an Event of Default has occurred and is
continuing and specifying the nature thereof.
SECTION 10.07. Action by Agent. So long as the Agent shall be entitled,
pursuant to Section 10.06, to assume that no Default or Event of Default has
occurred and is continuing, the Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights that may be
vested in it by, or with respect to taking or refraining from taking any action
or actions that it may be able to take under or in respect of, this Agreement or
any of the other Credit Documents. The Agent shall incur no liability to the
Lenders under or in respect of this Agreement or any of the other Credit
Documents by acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by
the proper party or parties, or with respect to anything that it may do or
refrain from doing in the reasonable exercise of its judgment, or that may seem
to it to be necessary or desirable under the circumstances.
Without limiting the generality of the foregoing provisions of this Section
10.07, the Agent shall be conclusively entitled to assume that the conditions
precedent set forth in Section 5.02 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not been
satisfied.
SECTION 10.08. Notices of Event of Default, Etc.. In the event that the
Agent shall have acquired actual knowledge of any Default or Event of Default,
the Agent shall promptly give notice thereof to the Lenders, and the Agent may
take such action and assert such rights with respect to taking or refraining
from taking any action or actions that it may be able to take under or in
respect of, this Agreement or any of the other Credit Documents, as it deems to
be advisable in its discretion for the protection of the interests of the
Lenders, including, without limitation, the exercise of rights and remedies
under Article IX and under any of the other Credit Documents; provided that, as
between the Agent and the Lenders only, after the occurrence of an Event of
Default, the Agent (i) shall not exercise any rights or remedies granted to it
hereunder, under any other of the Credit Documents, or otherwise available to it
at law or in equity, without the approval of the Required Lenders (or all of the
Lenders, if otherwise required by this Agreement) and (ii) upon the direction of
the Required Lenders (or all of the Lenders, if otherwise required by this
Agreement), shall exercise such rights and remedies as so directed; provided
further that, notwithstanding the above, the Agent shall not be required to take
any action which would expose the Agent to personal liability or which is
contrary to law unless it shall be indemnified to its satisfaction against any
and all amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of taking
or continuing to take any such action.
SECTION 10.09. Indemnification of Agent. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to their
respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or any of the other Credit Documents or any action taken
or omitted by the Agent under this Agreement or any of the other Credit
Documents; provided that, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation to the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any of the other Credit Documents, to the extent not reimbursed by the
Borrower.
SECTION 10.10. No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent or any of its directors, employees, agents,
attorneys-in-fact or affiliates hereafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to such Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigations into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make Loans
hereunder and to enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Credit Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. The Agent agrees that (i) it shall promptly
deliver to each Lender copies of all notices, reports and other documents
expressly required to be furnished to the Agent by the Borrower pursuant to any
of the Credit Documents and (ii) upon the reasonable request of any Lender, it
shall promptly deliver to such Lender such other information as the Agent shall
receive regarding the Borrower or the performance of the obligations of the
Borrower under the Credit Documents; otherwise, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 10.11. Resignation. Subject to the appointment and acceptance of a
successor as provided below, the acting Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor acceptable to the Borrower,
which successor shall be a Lender that is a bank having a combined capital and
surplus of at least $500,000,000 or an affiliate of any such bank. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor satisfying the requirements set forth above. Upon the
acceptance of any appointment hereunder by a successor Lender, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After the Agent's resignation hereunder,
the provisions of this Article and Section 11.07 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
ARTICLE XI. MISCELLANEOUS
SECTION 11.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telex, telecopy, graphic scanning or other
telegraphic communications equipment of the sending party, as follows:
(a) if to the Borrower, to it at 800 Market Street, 29th
Floor, St. Louis, Missouri 63101 Attention of T. C. Oviatt,
Treasurer (Facsimile No. 314-877-7729);
(b) if to the Agent, to it at 233 S. Wacker Drive, Sears
Tower, Suite 2800, Chicago, Illinois 60606-6308, Attention of
Louise Comiskey (Facsimile No. 312-372-9194);
With a copy to: NationsBank, N.A.
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-02
Charlotte, North Carolina 28255
Attention of Molly Canup
(Facsimile No. 704-386-9923)
(c) if to a Lender, to it at its address (or telecopy number) set forth in
Schedule 1 or in the assignment agreement pursuant to which such Lender became a
party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telex, telecopy, graphic scanning or other telegraphic communications equipment
of the sender, or on the date five (5) Business Days after dispatch by certified
or registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 11.01 or at such other
address or telex, telecopy or other number as shall be designated by such party
in a notice to each other party complying with the terms of this Section 11.01.
SECTION 11.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making of Loans by the Lenders hereunder
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as any Loans or any amounts are
outstanding under this Agreement or any of the other Credit Documents and so
long as the Commitments have not been terminated.
SECTION 11.03. Binding Effect; Termination of Existing Credit Agreement.
This Agreement shall become effective when it shall have been executed by the
Borrower and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Agreement shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and their respective
successors and assigns. The Borrower hereby agrees that, at such time as this
Agreement shall have become effective pursuant to the terms of the immediately
preceding sentence, the Existing Credit Agreement and the Commitments thereunder
and as defined therein automatically shall be terminated.
SECTION 11.04. Benefit of Agreement. (a) Generally. 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 that, the Borrower may
not assign or transfer any of its interests without prior written consent of the
Lenders; provided further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be limited
as set forth in this Section 11.04, provided, however, that nothing herein shall
prevent or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or participations in such
Lender's Loans and/or Commitments hereunder to its parent company and/or to any
affiliate of such Lender which is at least 50% owned by such Lender or its
parent company. To the extent required in connection with a pledge of Loans by
any Lender to a Federal Reserve Bank, the Borrower agrees that, upon request of
any such Lender, it will promptly provide such Lender a promissory note
evidencing the repayment obligations of the Borrower with respect to the
principal of and interest on the Loans of such Lender arising under Section
2.01, 2.02 and/or 2.03, as applicable, such promissory note to be in a form
reasonably satisfactory to the Borrower and the applicable Lender.
(b) Assignments by Lenders. Each Lender may assign all or a
portion of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Schedule 14 to one or more Eligible
Assignees, provided that any such assignment shall be in a minimum aggregate
amount of $10,000,000 of the Commitments and in integral multiples of $1,000,000
above such amount, and that each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement. Any assignment hereunder shall be effective upon delivery
to the Agent of written notice of the assignment together with a transfer fee of
$5,000 payable to the Agent for its own account; provided that no such transfer
fee shall be payable in connection with an assignment by any Lender to an
Affiliate or Subsidiary of such Lender. The assigning Lender will give prompt
notice to the Agent and the Borrower of any such assignment. Upon the
effectiveness of any such assignment (and after notice to the Borrower as
provided herein), the assignee shall become a "Lender" for all purposes of this
Agreement and the other Credit Documents and, to the extent of such assignment,
the assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. By executing and
delivering an assignment agreement in accordance with this Section 11.04(b), the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim; (ii)
except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any of the
other Credit Documents or any other instrument or document furnished pursuant
hereto or thereto or the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under this Agreement,
any of the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Agreement, the other
Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without reliance
upon the Agent, such assigning Lender or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Credit Documents; (vi) such assignee appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement or any other Credit Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement and the other Credit Documents are required to be performed by it
as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and obligations
hereunder; provided that (i) such selling Lender shall remain a "Lender" for all
purposes under this Agreement and the other Credit Documents (such selling
Lender's obligations under this Agreement remaining unchanged) and the
participant shall not constitute a Lender hereunder, (ii) no such participant
shall have, or be granted, rights to approve any amendment or waiver relating to
this Agreement or any of the other Credit Documents except with respect to any
such amendment or waiver which would, under the terms of Section 11.08, require
the consent of all of the Lenders, (iii) sub-participations by the participant
(except to an affiliate, parent company or affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in integral
multiples of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under this Agreement or
under any of the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant shall
be entitled to receive additional amounts under Sections 3.05 and 3.07 on the
same basis as if it were a Lender.
(d) Disclosure of Confidential Information. (i) Any Lender may, in
connection with any assignment pursuant to paragraph (b) above, disclose to the
assignee or the proposed assignee any information relating to the Borrower or
any Subsidiary of the Borrower furnished to such Lender by or on behalf of the
Borrower or any Subsidiary of the Borrower in connection with this Agreement,
provided that, prior to any such disclosure each such assignee or proposed
assignee shall execute an agreement containing substantially the terms of all
then existing confidentiality agreements entered into by the assigning Lender
with respect to the Borrower and its Subsidiaries, in each case whereby such
assignee or proposed assignee shall agree to preserve the confidentiality of any
non-public, confidential or proprietary information relating to the Borrower or
any Subsidiary of the Borrower.
(ii) The Lenders may not, in connection with any participation pursuant to
paragraph (c) above, disclose to the participant or the proposed participant any
non-public, confidential or proprietary information relating to the Borrower or
any Subsidiary of the Borrower furnished to such Lender by or on behalf of the
Borrower or any Subsidiary of the Borrower.
SECTION 11.05. Right of Set-Off. 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 Lender is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights 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 Lender
(including, without limitation, branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of the Borrower against
obligations and liabilities of the Borrower to such Lender hereunder or under
any of the other Credit Documents or otherwise, irrespective of whether such
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. The Borrower hereby agrees that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 4.03 or Section 11.04(c) may exercise all rights of set-off with respect
to its participation interest as fully as if such Person were a Lender
hereunder.
SECTION 11.06. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower and the Agent or any Lender 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 and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
SECTION 11.07. Payment of Expenses, etc.. The Borrower agrees to: (i) pay
all reasonable out-of-pocket costs and expenses (A) of the Agent in connection
with the negotiation, preparation, execution and delivery and administration of
this Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Moore & Van Allen, PLLC, special counsel to the Agent) and any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Borrower under this Agreement and (B) of the Agent and the Lenders in connection
with enforcement of the Credit Documents and the documents and instruments
referred to therein and/or collection of the obligations of the Borrower
pursuant to the Credit Documents (including, without limitation, in connection
with any such enforcement or collection, the reasonable fees and disbursements
of counsel for the Agent and each of the Lenders); (ii) pay and hold each of the
Lenders harmless from and against any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save each of the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or reasonable
out-of-pocket expenses incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not any Lender is a party thereto) related to the
entering into and/or performance of any Credit Document, to the use of proceeds
of any Loans hereunder, to the consummation of any other transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).
SECTION 11.08. Amendments, Waivers and Consents. Neither this Agreement nor
any other Credit Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by the Required Lenders, provided
that no such amendment, change, waiver, discharge or termination shall, without
the consent of each Lender, (i) extend the scheduled maturities (including the
final maturity) of any Loan, or any portion thereof, or reduce the rate or
extend the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon or fees
hereunder or reduce the principal amount thereof, or increase the Commitment of
any Lender over the amount thereof in effect (it being understood and agreed
that a waiver of any Default or Event of Default shall not constitute a change
in the terms of any Commitment of any Lender), (ii) amend, modify or waive any
provision of this Section or Section 3.05, 3.07, 4.02, 4.03, 9.01(a), 11.04,
11.05, 11.07 or 11.11, (iii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders or (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Credit Documents. No provision of Article X may be
amended without the consent of the Agent.
SECTION 11.09. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument.
It shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
SECTION 11.10. Table of Contents; Headings. The table of contents hereto
and the headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
SECTION 11.11. Survival of Indemnification. All indemnities set forth
herein, including, without limitation, in Section 3.05, 3.07, 4.04, 10.09 or
11.07 shall survive the execution and delivery of this Agreement, and the making
of the Loans, the repayment of the Loans and other obligations and the
termination of the Commitments hereunder.
SECTION 11.12. Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA. The Borrower hereby submits to the non-exclusive
jurisdiction of the United States District Court for the Western District of
North Carolina or the courts of the State of North Carolina in Mecklenburg
County for the purposes of any legal action or proceeding with respect to this
Agreement or any of the other Credit Documents. The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that such proceeding has been brought in an inconvenient
form. The Borrower hereby consents to process being served in any such
proceeding by the mailing of a copy thereof by registered or certified air mail,
postage prepaid, return receipt requested, to the address specified for notices
to the Borrower pursuant to Section 11.01 or in any other matter permitted by
law. Nothing herein shall affect the right of the Agent to serve process in any
other manner permitted by law or to commence legal proceedings or to otherwise
proceed against the Borrower in any other jurisdiction.
(b) EACH OF THE AGENT, THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 11.13. Severability. If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
SECTION 11.14. Entirety. This Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence, relating to this Agreement or any of the other Credit
Documents or the transactions contemplated herein and therein.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
RALCORP HOLDINGS, INC.
By______________________________
Title___________________________
NATIONSBANK, N.A., individually
in its capacity as a Lender and
in its capacity as Agent
By______________________________
Title___________________________
BANK OF AMERICA, NATIONAL TRUST
AND SAVINGS ASSOCIATION
By______________________________
Title___________________________
THE BANK OF NEW YORK
By______________________________
Title___________________________
THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS
By______________________________
Title___________________________
[Signatures Continued]
THE FIRST NATIONAL BANK OF CHICAGO
By_____________________________
Title___________________________
THE CHASE MANHATTAN BANK, N.A.
By______________________________
Title___________________________
WACHOVIA BANK OF GEORGIA, N.A.
By______________________________
Title___________________________
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By______________________________
Title___________________________
CREDIT SUISSE
By______________________________
Title___________________________
By______________________________
Title___________________________
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of March 12, 1996
among
RALCORP HOLDINGS, INC.
THE LENDERS PARTY HERETO
and
NATIONSBANK, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 1
SECTION 1.01. Defined Terms 1
SECTION 1.02. Accounting Terms 17
SECTION 1.03. Terms Generally 17
ARTICLE II. THE LOANS 18
SECTION 2.01. Revolving Loans 18
SECTION 2.02. Competitive Loan Subfacility 21
SECTION 2.03. Termination and Reduction of Commitments 24
SECTION 2.04. Fees 24
ARTICLE III. ADDITIONAL PROVISIONS REGARDING LOANS 25
SECTION 3.01. Default Rate 25
SECTION 3.02. Prepayments 25
SECTION 3.03. Extension and Conversion 26
SECTION 3.04. Alternate Rate of Interest 26
SECTION 3.05. Reserve Requirements;
Change in Circumstances 27
SECTION 3.06. Change in Legality 28
SECTION 3.07. Indemnity 29
SECTION 3.08. Mandatory Assignment; Commitment
Termination 30
ARTICLE IV. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; U.S.
TAXES; EVIDENCE OF LOANS 30
SECTION 4.01. Payments and Computations 30
SECTION 4.02. Pro Rata Treatment 31
SECTION 4.03. Sharing of Payments 31
SECTION 4.04. U.S. Taxes 32
SECTION 4.05. Evidence of Loans 33
ARTICLE V. CONDITIONS PRECEDENT 34
SECTION 5.01. Conditions to Initial Loans. 34
SECTION 5.02. Each Loan 35
ARTICLE VI. REPRESENTATIONS AND WARRANTIES 36
SECTION 6.01. Corporate Organization and Validity 36
SECTION 6.02. Pending Litigation 36
SECTION 6.03. Title to Properties 37
SECTION 6.04. Patents and Trademarks 37
SECTION 6.05. Governmental Consent 37
SECTION 6.06. Taxes 37
SECTION 6.07. Financial Statements 37
SECTION 6.08. Full Disclosure 38
SECTION 6.09. Funded Indebtedness 38
SECTION 6.10. Affiliates and Subsidiaries 38
SECTION 6.11. Governmental Regulations, Etc. 38
SECTION 6.12. Environmental Matters 39
SECTION 6.13. Solvency 40
SECTION 6.14. ERISA 40
ARTICLE VII. AFFIRMATIVE COVENANTS 40
SECTION 7.01. Information Covenants 40
SECTION 7.02. Preservation of Existence and Franchises 43
SECTION 7.03. Books, Records and Inspections 43
SECTION 7.04. Compliance with Law 44
SECTION 7.05. Payment of Taxes and Other Claims 44
SECTION 7.06. Insurance 44
SECTION 7.07. Maintenance of Property 44
SECTION 7.08. Performance of Obligations 44
SECTION 7.09. ERISA 45
SECTION 7.10. Use of Proceeds 45
SECTION 7.11. Financial Covenants 45
SECTION 7.12. Domestic Revenues 45
ARTICLE VIII. NEGATIVE COVENANTS 45
SECTION 8.01. Funded Indebtedness 46
SECTION 8.02. Liens 47
SECTION 8.03. Nature of Business 47
SECTION 8.04. Consolidation, Merger, Sale or Purchase of
Assets, etc. 47
SECTION 8.05. Transactions with Affiliates 48
SECTION 8.06. Dividends 49
SECTION 8.07. Advances, Investments, Loans, etc. 49
SECTION 8.08. No Dividend Restrictions 49
SECTION 8.09. Fiscal Year 50
ARTICLE IX. EVENTS OF DEFAULT 50
SECTION 9.01. Events of Default 50
SECTION 9.02. Acceleration; Remedies 52
ARTICLE X. AGENT 52
SECTION 10.01. Appointment and Authorization 52
SECTION 10.02. General Immunity 53
SECTION 10.03. Consultation with Professionals 53
SECTION 10.04. Documents 53
SECTION 10.05. Rights as a Lender 53
SECTION 10.06. Responsibility of Agent 53
SECTION 10.07. Action by Agent 53
SECTION 10.08. Notices of Event of Default, Etc.. 54
SECTION 10.09. Indemnification of Agent 54
SECTION 10.10. No Representations 55
SECTION 10.11. Resignation 55
ARTICLE XI. MISCELLANEOUS 56
SECTION 11.01. Notices 56
SECTION 11.02. Survival of Agreement 57
SECTION 11.03. Binding Effect; Termination of Existing
Credit Agreement 57
SECTION 11.04. Benefit of Agreement 57
SECTION 11.05. Right of Set-Off 60
SECTION 11.06. No Waiver; Remedies Cumulative 60
SECTION 11.07. Payment of Expenses, etc. 60
SECTION 11.08. Amendments, Waivers and Consents 61
SECTION 11.09. Counterparts 62
SECTION 11.10. Table of Contents; Headings 62
SECTION 11.11. Survival 62
SECTION 11.12. Governing Law; Submission to Jurisdiction;
Venue 62
SECTION 11.13. Severability 62
SECTION 11.14. Entirety 63
<PAGE>
SCHEDULES
Schedule 1 Lender Addresses and CommitmentPercentages
Schedule 2 Form of Notice of Borrowing
Schedule 3 Form of Notice of Extension/Conversion
Schedule 4 Permitted Investments
Schedule 5 Form of Competitive Bid Request
Schedule 6 Form of Legal Opinion of R. W. Lockwood, Esq.,
General Counsel of Borrower
Schedule 7 Form of Legal Opinion of Moore & Van Allen, PLLC
Schedule 8 Pending Litigation
Schedule 9 Changes in Financial Condition
Schedule 10 Affiliates
Schedule 11 Subsidiaries
Schedule 12 Environmental Disclosure
Schedule 13 Form of Officer's Compliance Certificate
Schedule 14 Form of Lender Assignment Agreement
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (as amended from time to time,
the "Agreement"), dated as of March 12, 1996, is made by and among RALCORP
HOLDINGS, INC., a Missouri corporation (the "Borrower"); the lenders listed in
Schedule 1 (the "Lenders"); and NATIONSBANK, N.A., a national banking
association, as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Lenders provide the Borrower
with a $100,000,000 364-day revolving credit facility for the purposes of (i)
refinancing existing indebtedness of the Borrower under the Existing Credit
Agreement (hereinafter defined) and (ii) financing the working capital and other
general corporate needs of the Borrower and its Subsidiaries; and
WHEREAS, the Lenders have agreed to provide such requested revolving
facility pursuant to the terms of this Agreement.
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"Adjusted Eurodollar Rate" shall mean for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate (rounded upwards, if
necessary, to the nearest whole multiple of 1/16th of 1%) equal to the per annum
rate obtained by dividing (a) the rate of interest determined by the Agent (i)
for any Interest Period of one (1) week, the rate of interest equal to the
arithmetic average of the rates shown on the Telerate Screen Page 3875, Official
BBA Fixings for all Major Currencies and (ii) for any other Interest Period, the
rate of interest equal to the London Interbank Offered Rate shown on the
Telerate Screen Page 3750, British Bankers Association Interest Settlement
Rates, in the case of either of clauses (i) and (ii) above as of 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period, by (b) a percentage equal to 100% minus the Adjusted Eurodollar Rate
Reserve Percentage for such Interest Period. In the event the Telerate Screen
Page 3875 or 3750, as applicable, is unavailable for any reason, the rate of
interest determined pursuant to clause (a) of the preceding sentence shall be,
for the Interest Period for each Eurodollar Loan, the average of the interest
rates per annum at which dollars for such Interest Period are offered to
NationsBank in the London Interbank Borrowing Market as of 11:00 a.m.
(Charlotte, North Carolina time) two (2) Business Days prior to the first day of
such Interest Period for a period of time corresponding to such Interest Period
and in an amount corresponding to the amount of such Eurodollar Loan.
"Adjusted Eurodollar Rate Reserve Percentage", for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), shall mean the percentage applicable two
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or including eurocurrency
liabilities, as such term is defined in Regulation D (or with respect to any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined) having a term equal to the
Interest Period for the Eurodollar Loan for which such Adjusted Eurodollar Rate
Reserve Percentage is being determined.
"Affiliate" shall mean, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the equity interest in such Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" shall have the meaning assigned to such term in the heading hereof.
"Agent Fee Letter" shall mean the fee letter dated March 12, 1996 among the
Borrower and NationsBanc Capital Markets, Inc.
"Agent's Fees" shall have the meaning assigned to such term in Section
2.04(b).
"Agreement" shall have the meaning assigned to such term in the heading
hereof.
"Applicable Margin" shall mean, for purposes of calculating the applicable
interest rate for any day for any Eurodollar Loan or the applicable rate of the
Unused Fee for any day for purposes of Section 2.04(a), the appropriate
applicable margin corresponding to the ratio described below in effect as of the
most recent Calculation Date:
<TABLE>
<CAPTION>
Pricing Consolidate Debt Applicable Applicable
Level Coverage Ratio Margin Margin
for for for
Eurodollar Loans Unused Fee
<S> <C> <C> <C>
IV Greater than 2.75 to 1.0 60.0 bps 17.5 bps
III Equal to or less than 2
to 1.0 but greater than
2.25 to 1.0 45.0 bps 12.5 bps
II Equal to or less than 2.2
to 1.0 but greater than
1.75 to 1.0 40.0 bps 10.0 bps
I Equal to or less than 1.7
to 1.0 35.0 bps 7.5 bps
</TABLE>
The Applicable Margin as of the Closing Date is (i) 45 bps for Eurodollar Loans
and (ii) 12.5 bps for the Unused Fee. Thereafter, determination of the
appropriate Applicable Margins based on the Consolidated Debt Coverage Ratio
shall be made as of each Calculation Date. The Consolidated Debt Coverage Ratio
in effect as of a Calculation Date shall establish the Applicable Margins that
shall be effective as of the date designated by the Agent as the Applicable
Margin Change Date. The Agent shall determine the Applicable Margins as of each
Calculation Date and shall promptly notify the Borrower and the Lenders of the
Applicable Margins so determined and of the Applicable Margin Change Date. Such
determinations by the Agent of the Applicable Margins shall be conclusive absent
manifest error.
"Applicable Margin Change Date" shall mean, with respect to any Calculation
Date occurring after the Closing Date, a date designated by the Agent that is
not more than five (5) Business Days after receipt by the Agent of the Required
Financial Information for such Calculation Date.
"Bankruptcy Event" shall mean, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%) equal to the greater of
(a) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% or (b)
the Prime Rate in effect on such day. For purposes hereof, (i) "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by NationsBank as its prime rate in effect at its principal office in Charlotte,
North Carolina; each change in the Prime Rate shall be effective on the date
such change is publicly announced as effective and (ii) "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System, or, if
such rate is not so released for any day which is a Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the Agent,
of the quotations for the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it. If for any
reason the Agent shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the Agent
to obtain sufficient quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (a) of the first sentence of
this definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate in accordance with the provisions of Article II.
"Borrower" shall have the meaning assigned to such term in
the heading hereof.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of North Carolina or the State of Missouri
or the State of New York) on which banks are open for business in Charlotte,
North Carolina, the State of Missouri and the State of New York; provided,
however, that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Calculation Date" shall mean each December 31, March 31, June 30 and
September 30.
"Capital Lease" shall mean any lease of Property which, in accordance with
GAAP, should be capitalized on the lessee's balance sheet or for which the
amount of the assets and liabilities thereunder, if so capitalized, should be
disclosed, in accordance with GAAP, in a note to such balance sheet.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) dollar denominated (or
foreign currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits or Eurodollar certificates of deposit of (A) any
domestic commercial bank with a bank rating of at least C (or the equivalent
thereof) by Thomson Bank Watch or (B) any bank whose short-term commercial paper
rating from S&P is at least A-1 (or the equivalent thereof) or from Moody's is
at least P-1 (or the equivalent thereof) (any such bank being an "Approved
Bank"), in each case with maturities of not more than twelve months from the
date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any commercial
paper and variable or fixed rate notes issued by, or guaranteed by any domestic
corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or
the equivalent thereof) or better by Moody's and maturing within twelve months
of the date of acquisition, (iv) interests in money market or mutual funds which
invest solely in assets or securities of the type described in subparagraph (i),
(ii) and/or (iii) hereof and (v) money market preferred investments having a
long-term rating of A or better by S&P or A-2 or better by Moody's or a
short-term rating of A-1 or better by S&P or P-1 or better by Moody's.
"Change of Control" shall mean the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
control over, Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 35% or more of the combined voting power of all
Voting Stock of the Borrower, or (ii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Borrower (together with any new
director whose election by the Borrower's Board of Directors or whose nomination
for election by the Borrower's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Borrower then in office. As used herein, "beneficial ownership"
shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Revolving Loans in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage multiplied by the
Revolving Committed Amount (as such Revolving Committed Amount may be reduced
from time to time pursuant to Section 2.03).
"Commitment Percentage" shall mean, for each Lender, the percentage
identified as its Commitment Percentage opposite such Lender's name on Schedule
1, as such percentage may be modified in connection with any assignment made in
accordance with the terms of Section 11.04.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to the terms of Section 2.02.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender in accordance with the provisions of Section 2.02, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request by the Borrower for
Competitive Bids in accordance with the provisions of Section 2.02.
"Competitive Bid Request Fee" shall have the meaning assigned to such term
in Section 2.04(c).
"Competitive Loan" shall mean a loan made by a Lender in its discretion
pursuant to the provisions of Section 2.02.
"Competitive Loan Lender" shall mean, at any time, a Lender which has any
Competitive Loans outstanding.
"Consolidated Debt Coverage Ratio" shall mean, at any time, the ratio of
(i) Consolidated Funded Indebtedness (plus, for purposes only of any
determination of the Applicable Margin pursuant to the definition of such term
set forth in this Section 1.01, the aggregate principal amount outstanding under
any Permitted Receivables Financings) at such time to (ii) Consolidated EBITDA
for the four fiscal-quarter period then ended.
"Consolidated EBIT" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense for such period and (B) total Federal, state,
local and foreign income, value added and similar taxes of the Borrower and its
consolidated Subsidiaries for such period.
"Consolidated EBITDA" shall mean, for any period, the sum of (i)
Consolidated EBIT for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
consolidated depreciation and amortization expense of the Borrower and its
consolidated Subsidiaries for such period.
"Consolidated Funded Indebtedness" shall mean, at any time, the outstanding
principal amount of all Funded Indebtedness, without duplication, of the
Borrower and its consolidated Subsidiaries at such time.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBIT to (ii) Consolidated Interest Expense.
"Consolidated Interest Expense" shall mean, for any period, all interest
expense (whether shown as interest expense or as loss and expenses on sales of
receivables) of the Borrower and its consolidated Subsidiaries for such period,
as determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, net income after
taxes for such period for the Borrower and its consolidated Subsidiaries, as
determined in accordance with GAAP but excluding any non-cash charges or gains
which are unusual, non-recurring or extraordinary.
"Consolidated Net Worth" shall mean, at any time, total shareholders'
equity of the Borrower and its Subsidiaries at such time, as determined in
accordance with GAAP.
"Consolidated Total Assets" shall mean, at any time, all items which, in
accordance with GAAP, would be classified as assets on a consolidated balance
sheet of the Borrower as of such time.
"Controlled Group" shall mean (i) the controlled group of corporations as
defined in Section 414(b) of the Code and the applicable regulations thereunder,
or (ii) the group of trades or businesses under common control as defined in
Section 414(c) of the Code and the applicable regulations thereunder, of which
the Borrower or any of its Subsidiaries is a member.
"Credit Documents" shall mean (i) this Agreement and (ii) all other related
agreements and documents issued or delivered under this Agreement or pursuant
hereto.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Disapproving Lender" shall having the meaning assigned to such term in
Section 2.01(e).
"Dividend" shall mean, with respect to any corporation, any cash or
non-cash dividend by such corporation to its stockholders, any return of capital
by such corporation to its stockholders, any other distribution, payment or
delivery of property or cash by such corporation to its stockholders as such,
any direct or indirect redemption, retirement, purchase or other acquisition of
any shares of any class of the capital stock of such corporation now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any such shares), or the setting aside of any funds by such
corporation for any of the foregoing purposes.
"Dollars", "dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"Eligible Assignee" shall mean (i) any Lender or any Affiliate or
Subsidiary of a Lender, and (ii) any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D of the
Securities and Exchange Commission) reasonably acceptable to the Agent and the
Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries is a member
of the same Controlled Group.
"Eurodollar Loan" shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Section
9.01.
"Existing Credit Agreement" shall mean that certain Amended and Restated
Credit Agreement dated as of November 30, 1994, as amended, among Ralcorp
Holdings, Inc., the lenders party thereto and NationsBank, N.A. (successor in
interest to NationsBank of North Carolina, N.A. and NationsBank, N.A.
(Carolinas)) as agent for such lenders.
"Federal Funds Effective Rate" shall have the meaning assigned to such term
within the definition of "Base Rate".
"Fees" shall mean all fees payable pursuant to Section 2.04.
"Fixed Rate Loan" shall mean a Competitive Loan bearing interest at a fixed
percentage rate per annum as provided in accordance with the provisions of
Section 2.02.
"Foreign Subsidiary" shall mean, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness, excluding intercompany items, of such Person
for borrowed money, (ii) all obligations, including without limitation
intercompany items, of such Person for the deferred purchase price of assets or
services which in accordance with GAAP would be shown to be a liability of such
Person (or on the liability side of a balance sheet of such Person), (iii)
indebtedness of such Person created or arising under any conditional sale or
title retention agreement, (iv) the principal portion of all obligations of such
Person under Capital Leases, (v) the maximum available amount of all letters of
credit or acceptances issued or created for the account of such Person, (vi) all
Guaranty Obligations of such Person with respect to Funded Indebtedness of
another entity, (vii) all Funded Indebtedness of another entity secured by a
Lien on any Property of such Person, whether or not such Funded Indebtedness has
been assumed by such Person and (viii) all Funded Indebtedness of any
partnership or joint venture (except for any such Funded Indebtedness with
respect to which recourse by the holder thereof is limited to the assets of such
partnership or joint venture) where such Person is a general partner, net of any
assets of such partnership or joint venture.
"GAAP" shall mean generally accepted accounting principles and provisions
as used in the United States of America and as in effect as of the Closing Date,
applied on a consistent basis subject to the terms of Section 1.02.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Funded Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to purchase any such
Funded Indebtedness or any Property constituting security therefor, (ii) to
advance or provide funds or other support for the payment or purchase of any
such Funded Indebtedness or to maintain working capital, solvency or other
balance sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar agreements
or arrangements) for the benefit of any holder of Funded Indebtedness of such
other Person, (iii) to lease or purchase Property, securities or services
primarily for the purpose of assuring the holder of such Funded Indebtedness, or
(iv) to otherwise assure or hold harmless the holder of such Funded Indebtedness
against loss in respect thereof. The amount of Guaranty Obligations hereunder
shall be deemed to be an amount equal to the stated or determinable amount of
the Funded Indebtedness in respect of which such Guaranty Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated amount in
respect thereof (assuming such other Person is required to perform thereunder)
as determined in good faith.
"Hazardous Substances" shall have the meaning assigned to such term in
Section 6.12.
"Interest Payment Date" shall mean (i) as to any Base Rate Loan, the last
day of each March, June, September and December, the date of repayment of the
principal of such Loan and the Maturity Date, (ii) as to any Eurodollar Loan,
the last day of each Interest Period for such Loan and the Maturity Date, and in
addition where the applicable Interest Period is more than 3 months, then also
on the date 3 months from the beginning of the Interest Period, and each 3
months thereafter, and (iii) as to any Fixed Rate Loan, the last day of the
Interest Period for such Loan, the Maturity Date, and in addition where the
applicable Interest Period is more than 90 days, then also on the date 90 days
from the beginning of the Interest Period and each 90 days thereafter. If an
Interest Payment Date falls on a date which is not a Business Day, such Interest
Payment Date shall be deemed to be the next succeeding Business Day, except that
in the case of Eurodollar Loans where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next preceding Business Day.
"Interest Period" shall mean (i) as to any Eurodollar Loan, a period of one
(1) week or a period of one, two, three or six months' duration, as the Borrower
may elect, commencing in each case on the date of the borrowing (including
conversions, extensions and renewals) and (ii) as to any Fixed Rate Loan, a
period commencing in each case on the date of the borrowing and ending on the
date specified in the applicable Competitive Bid whereby the offer to make such
Fixed Rate Loan was extended (such ending date in any event to be not less than
15 nor more than 180 days from the date of borrowing); provided, however, (A) if
any Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day (except
that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Maturity Date, (C) in the case of Eurodollar Loans made,
extended or converted during the Term Loan Amortization Period, no Interest
Period shall extend beyond any principal amortization payment date unless the
portion of the Term Loans comprised of Base Rate Loans, together with the
portion of the Term Loans comprised of Eurodollar Loans with Interest Periods
expiring prior to the date such principal amortization payment is due, is at
least equal to the amount of such principal amortization payment due on such
date and (D) in the case of Eurodollar Loans (other than any Eurodollar Loans
having a one (1) week Interest Period), where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall, subject to
clause (A) above, end on the last Business Day of such calendar month.
"Investment", in any Person, shall mean any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any Guaranty Obligation incurred for the benefit of such
Person.
"Lenders" shall have the meaning assigned to such term in the heading
hereof. The term "Lenders" shall also include within the meaning thereof any
Person which becomes a Lender in accordance with the terms of Section 11.04(b).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" shall mean the Revolving Loans (or any Revolving Loan
bearing interest at the Base Rate or the Adjusted Eurodollar Rate and referred
to as a Base Rate Loan or a Eurodollar Loan), the Competitive Loans, and/or the
Term Loans individually or collectively, as appropriate.
"Long Term Debt" shall mean, with respect to any Person, all indebtedness
of such Person which, in accordance with GAAP, would be classified as long term
debt on a balance sheet of such Person, but in any event including all
indebtedness of such Person having a final maturity date of more than one year
after the date of creation thereof, notwithstanding that payments in respect
thereof are required to be made by such Person within one year of the date of
determination. Any indebtedness which is extended or renewed shall be deemed to
have been created at the date of such extension or renewal.
"Material Adverse Effect" shall mean a material adverse effect on (i) the
consolidated operations or consolidated financial condition of the Borrower,
(ii) the ability of the Borrower to perform any material obligation under the
Credit Documents or (iii) the material rights and remedies of the Lenders under
the Credit Documents.
"Material Plan" shall have the meaning assigned to such term in Section
9.01(h).
"Material Subsidiary" shall mean (i) Ralston Foods, Inc., Bremner, Inc.,
Beech Nut Nutrition Corporation and Ralston Resorts, Inc. and (ii) any other
direct or indirect Subsidiary of the Borrower which on or after the Closing Date
has total assets equal to or greater than 10% of Consolidated Total Assets.
"Maturity Date" shall mean March 11, 1997, or such other date as may be
established pursuant to Section 2.01(e).
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 3(37) of ERISA to which the Borrower or any
of its Subsidiaries or any ERISA Affiliate is then making or accruing an
obligation to make contributions or with respect to which the Borrower or any of
its Subsidiaries or any ERISA Affiliate has any liability.
"NationsBank" shall mean NationsBank, N.A., a national banking association.
"Notice of Borrowing" shall mean a written notice of borrowing in
substantially the form of Schedule 2, as required by Section 2.01(b).
"Notice of Extension/Conversion" shall mean a written notice of continuance
or conversion of one or more Loans in substantially the form of Schedule 3, as
required by Section 3.03.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, a body
corporate established within the Department of Labor pursuant to ERISA, or any
successor thereto.
"Permitted Investments" shall mean Investments which are either (i) cash
and Cash Equivalents, (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (iii) acquisitions permitted by Section 8.04(c), (iv) (A)
Investments in Domestic Subsidiaries of the Borrower and (B) Investments in
Foreign Subsidiaries of the Borrower (in addition to Investments permitted by
clause (iii) above), provided that, after giving effect to such Investment, the
aggregate amount of all such Investments made pursuant to this clause (iv)(B)
since the Closing Date, together with the aggregate amount of the cash portion
of purchase prices paid for acquisitions of Foreign Subsidiaries of the Borrower
made pursuant to Section 8.04(c) and the aggregate amount of transfers to
Foreign Subsidiaries of the Borrower made pursuant to Section 8.05(c), does not
exceed 5% of Consolidated Total Assets as of the most recent fiscal year end
preceding the date of such Investment with respect to which the Agent shall have
received the Required Financial Information, (v) transactions permitted by
Section 8.05, (vi) loans to directors, officers, employees, agents, customers or
suppliers that do not exceed an aggregate principal amount of $5,000,000 at any
one time outstanding, (vii) equity securities listed on the New York Stock
Exchange ("NYSE"), provided that (A) the long-term credit rating of the
corporation issuing such securities shall be A- (or the equivalent thereof) or
better from S&P or A3 (or the equivalent thereof) or better from Moody's and (B)
the aggregate purchase price paid for all such equity securities held at any
time shall not exceed $5,000,000, (viii) (A) the contribution by Ralston
Resorts, Inc. of certain undeveloped real estate located in or around Summit
County, Colorado and having a book value not to exceed $25,000,000 to a joint
venture of which Ralston Resorts, Inc. or one of its Subsidiaries is an equity
owner and (B) the ownership interest of Ralston Resorts, Inc. in such joint
venture or (ix) Investments set forth in Schedule 4 (but without additional
acquisitions thereof except as otherwise permitted hereby).
"Permitted Liens" shall mean (a) (i) Liens in favor of the Agent on behalf
of the Lenders, (ii) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof); (iii) Liens in respect of Property imposed by law
arising in the ordinary course of business such as materialmen's, mechanics',
warehousemen's and other like Liens provided that such Liens secure only amounts
not yet due and payable or, if due and payable, are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the Property subject
to any such Lien is not yet subject to foreclosure, sale or loss on account
thereof); (iv) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs; (v) Liens arising from good faith deposits in connection with or to
secure performance of tenders, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment of borrowed
money); (vi) Liens arising from good faith deposits in connection with or to
secure performance of statutory obligations and surety and appeal bonds; (vii)
easements, rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or encumbrances
not, in any material respect, impairing the use of the encumbered Property for
its intended purposes; (viii) Liens arising from Uniform Commercial Code
financing statements regarding Capital Leases and purchase money Liens securing
purchase money indebtedness, in each case to the extent permitted under Section
8.01(d); (ix) Liens on Property of any Person at the time such Person becomes a
Subsidiary of the Borrower or any of its Subsidiaries; (x) Liens existing as of
the Closing Date and identified in the financial statements referred to in
Section 6.07; (xi) Liens on Property of any Subsidiary of the Borrower and
exclusively securing indebtedness of such Subsidiary to the Borrower or any
other Subsidiary of the Borrower; (xii) subject to the terms of Section 8.01 and
Section 8.04, Liens on any Property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of such Property,
whether directly or indirectly by way of share disposition or otherwise,
provided that after 120 days from the creation of such Lien such Property shall
not be owned by the Borrower or any of its Subsidiaries and any indebtedness
secured by such Lien shall be without recourse to the Borrower or any of its
Subsidiaries; (xiii) Liens deemed to exist in connection with sales of
receivables permitted under Section 8.04(b)(iii) (including any related filings
of Uniform Commercial Code financing statements), but only to the extent that
any such Lien relates to the applicable receivables and related property
actually sold pursuant to any such transactions; and (xiv) extensions, renewals
or replacements, in whole or in part, of any Lien referred to in the foregoing
clauses (i) to (xiii), inclusive, provided that the principal amount of
indebtedness secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or any
part of the same Property that secured the Lien extended, renewed or replaced
(plus improvements on such Property); and (b) Liens securing an aggregate amount
of indebtedness outstanding at any time that is no greater than 5% of the
Consolidated Total Assets less (A) all liabilities and liability items except
long-term debt, deferred income taxes and shareholders' equity and (B) all good
will, trade names, trademarks, patents, unauthorized debt discount and expenses,
and other similar intangibles, all as computed pursuant to GAAP.
"Permitted Receivables Financings" shall mean one or more receivables
financings in an aggregate principal amount not to exceed $50,000,000 at any one
time outstanding and involving the sale by the Borrower or any of its
Subsidiaries of accounts receivable in true sale transactions (as determined in
accordance with GAAP).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any Governmental
Authority.
"Plan" shall mean any "single-employer plan" (as defined in Section
4001(a)(15) of ERISA and subject to Title IV of ERISA), which is maintained, or
at any time during the five calendar years preceding the date of this Agreement
was maintained, for employees of the Borrower or any of its Subsidiaries or any
ERISA Affiliate.
"Prime Rate" shall have the meaning assigned to such term within the
definition of "Base Rate".
"Pro Forma Basis" shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent Calculation Date preceding
the date of such transaction with respect to which the Agent has received the
Required Financial Information. As used herein, "transaction" shall mean (i) any
incurrence, assumption or retirement of Funded Indebtedness as referred to in
Section 8.01(f), (ii) any corporate merger or consolidation as referred to in
Section 8.04(a), (iii) any sale or other disposition of assets as referred to in
Section 8.04(b) or (iv) any acquisition of capital stock or securities or any
purchase, lease or other acquisition of Property as referred to in Section
8.04(c). With respect to any transaction of the type described in clause (i)
above regarding Funded Indebtedness which has a floating or formula rate, the
implied rate of interest for such Funded Indebtedness for the applicable period
for purposes of this definition shall be determined by utilizing the rate which
is or would be in effect with respect to such Funded Indebtedness as at the
relevant date of determination.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Regulation D, G, T, U or X" shall mean Regulation D, G, T, U or X, as
applicable, 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.
"Required Financial Information" shall mean, with respect to the applicable
Calculation Date, (i) the financial statements of the Borrower required to be
delivered pursuant to Section 7.01 for the fiscal period or quarter ending as of
such Calculation Date, and (ii) the certificate of the chief financial officer,
controller or treasurer of the Borrower required by Section 7.01(c) to be
delivered with the financial statements described in clause (i) above.
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate at least 51% of (i) the Commitments to make Revolving
Loans or (ii) if the Commitments have been terminated, the outstanding Loans.
"Revolving Committed Amount" shall have the meaning assigned to such term
in Section 2.01(a).
"Revolving Loans" shall have the meaning assigned to such term in Section
2.01(a).
"S&P" shall mean Standard & Poors Corporation.
"Solvent" shall mean, with respect to any Person as of a particular date,
that on such date (a) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary course and
(e) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Subsidiary" of any Person shall mean (i) any corporation more than 50% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through Subsidiaries, and (ii) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through Subsidiaries
has more than 50% equity interest at any time.
"Term Loans" shall have the meaning assigned to such term in Section
2.01(f).
"Term Loan Amortization Date" shall have the meaning assigned to such term
in Section 2.01(f).
"Term Loan Termination Date" shall have the meaning assigned to such term
in Section 2.01(f).
"Unused Fee" shall have the meaning assigned to such term in Section
2.04(a).
"Unused Fee Calculation Period" shall have the meaning assigned to such
term in Section 2.04(a).
"Unused Revolving Committed Amount" shall mean, for any period, the amount
by which (i) the then applicable Revolving Committed Amount exceeds (ii) the
daily average sum for such period of the outstanding aggregate principal amount
of all Loans other than Competitive Loans.
"Voting Stock" shall mean, with respect to any Person, capital stock issued
by a corporation, or equivalent interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency.
SECTION 1.02. Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared in accordance with GAAP
applied on a consistent basis (including, but not limited to, the non-inclusion
of footnotes in any unaudited financial statements covering a period of less
than a full fiscal year). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with those
used in the preparation of the latest annual or quarterly financial statements
of the applicable Person(s) required to be delivered to the Agent and each
Lender pursuant to Section 7.01 (or prior to the delivery of the first financial
statements pursuant to Section 7.01 used in the preparation of the audited
financial statements of such Person(s) as at September 30, 1995); provided,
however, if (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements or (ii) the
Agent or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with those used in the preparation of the latest financial
statements as to which no such objection shall have been made (which, if
objection is made in respect of the first financial statements delivered
pursuant to Section 7.01, shall mean the audited financial statements of the
applicable Person(s) dated September 30, 1995).
The Borrower shall deliver to the Agent and each Lender, at the same time
as the delivery of any annual or quarterly financial statement pursuant to
Section 7.01, (i) a description in reasonable detail of any material variation
between the application of accounting principles employed in the preparation of
such statement and the application of accounting principles employed in the
preparation of the most recent preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the
paragraph above and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
SECTION 1.03. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." All references
herein to Articles, Sections and Schedules shall be deemed references to
Articles and Sections of, and Schedules to, this Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP.
ARTICLE II. THE LOANS
SECTION 2.01. Revolving Loans.
(a) Revolving Commitment. Subject to and upon the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, at any time and from time to time from the
Closing Date until the Maturity Date, to make revolving credit loans (each a
"Revolving Loan" and, collectively, "Revolving Loans") to the Borrower for the
purposes set forth in Section 7.10; provided, however, (i) with regard to each
Lender individually, such Lender's pro rata share of outstanding Revolving Loans
shall not exceed such Lender's Commitment Percentage of the Revolving Committed
Amount, (ii) with regard to the Lenders collectively, the aggregate amount of
Revolving Loans outstanding shall not exceed ONE HUNDRED MILLION DOLLARS
($100,000,000), as such maximum amount may be reduced from time to time as
provided in Section 2.03 or as otherwise provided herein (such amount, as so
reduced from time to time, the "Revolving Committed Amount"), and (iii) in
addition to the limitations set forth in the preceding subparagraphs (i) and
(ii), in no event shall the sum of Revolving Loans outstanding plus Competitive
Loans outstanding exceed the Revolving Committed Amount. Revolving Loans
hereunder may consist of Base Rate Loans or Eurodollar Loans (or a combination
thereof) as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Advances.
(i) Notices. Whenever the Borrower desires a Revolving Loan advance
hereunder, it shall give an appropriate Notice of Borrowing to the Agent by
hand delivery, telex or telecopy not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of the requested advance in the
case of Base Rate Loans, and on the third Business Day prior to the
requested advance in the case of Eurodollar Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan
is requested, (B) the date of the requested advance (which shall be a
Business Day), (C) the aggregate principal amount of the Revolving Loan
requested, and (D) whether the Revolving Loan requested shall consist of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Periods with respect thereto.
If the Borrower shall fail to specify in any such Notice of Borrowing (i)
an applicable Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of one month,
or (ii) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. The Agent shall as
promptly as practicable give each Lender notice of each requested Revolving
Loan advance, of such Lender's pro rata share thereof and of the other
matters covered in the applicable Notice of Borrowing.
(ii) Minimum Amounts. Each Revolving Loan shall be in an aggregate
principal amount that is not less than the lesser of $5,000,000 or the
remaining amount available to be borrowed with respect to the Revolving
Loans in accordance with the terms of Section 2.01(a). Any Revolving Loan
requested in excess of $5,000,000 shall be in an integral multiple of
$500,000.
(iii) Funding of Advances. Each Lender will make its pro rata share of
each Revolving Loan available to the Agent by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing
by deposit in dollars of immediately available funds at the offices of the
Agent in Charlotte, North Carolina, or at such other address as the Agent
may designate in writing, and the Agent shall, by 3:00 p.m. (Charlotte,
North Carolina time) on the same day, credit the amount so received to the
general deposit account of the Borrower with the Agent. All Revolving Loans
shall be made by the Lenders pro rata on the basis of each Lender's
Commitment Percentage. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make Revolving Loans
hereunder; provided, however, that the failure of any Lender to fulfill its
Commitment hereunder shall not relieve any other Lender of its Commitment
hereunder. Unless the Agent shall have been notified by any Lender prior to
the date of any Revolving Loan advance that such Lender does not intend to
make available to the Agent its portion of the Revolving Loan advance to be
made on such date, the Agent may assume that such Lender has made such
amount available to the Agent on the date of such Revolving Loan advance,
and the Agent, in reliance upon such assumption, may (in its sole
discretion without any obligation to do so) make available to the Borrower
a corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Lender or the Borrower, 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 Borrower to the
date such corresponding amount is recovered by the Agent, at a per annum
rate equal to, with respect to the Borrower, the then applicable rate
calculated in accordance with Section 2.01(d) and, with respect to such
Lender, the Federal Funds Effective Rate.
(c) Repayment. The Borrower hereby promises to pay to the Lenders the
principal amount of all Revolving Loans outstanding hereunder on the Maturity
Date.
(d) Interest. (i) Interest Rates. Subject to the provisions of Section
3.01, Revolving Loans shall bear interest as follows:
(A) Base Rate Loans. During such periods as Revolving Loans shall
consist of Base Rate Loans, at a per annum rate (computed on the basis of
the actual number of days elapsed over a year of 365 days) equal to the
Base Rate in effect from time to time.
(B) Eurodollar Loans. During such periods as Revolving Loans
shall consist of Eurodollar Loans, at a per annum rate (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal
to the sum of the Adjusted Eurodollar Rate for the Interest Period in
effect for such Eurodollar Loan plus the Applicable Margin in effect from
time to time.
(ii) Payment of Interest. The Borrower hereby promises to pay to the
Lenders on each applicable Interest Payment Date (or at such other times as may
be specified herein) accrued interest on the Revolving Loans.
(e) Extension of Maturity Date. The Borrower may, within 60 days prior to
the Maturity Date, by notice to the Agent, make written request of the Lenders
to extend the Maturity Date for an additional period of 364 days. The Agent will
give prompt notice to each of the Lenders of its receipt of any such request for
extension of the Maturity Date. Each Lender shall make a determination not later
than 30 days prior to the then applicable Maturity Date as to whether or not it
will agree to extend the Maturity Date as requested; provided, however, the
failure by any Lender to make a timely response to the Borrower's request for
extension of the Maturity Date shall be deemed to constitute a refusal by such
Lender to extend the Maturity Date. If, in response to a request for an
extension of the Maturity Date, one or more Lenders shall fail to agree to the
requested extension (the "Disapproving Lenders"), then the Borrower may, at its
own expense with the assistance of the Agent, make arrangements in accordance
with Section 3.08 for the assignment of the Commitments and Loans of the
Disapproving Lenders. In the event that the Bororwer is unable for any reason to
arrange for the assignment of the Commitments and Loans of any Disapproving
Lender, then the Borrower may not extend the Maturity Date.
(f) Amortization of Loans Outstanding at the Maturity Date.
(i) Election to Amortize. The Borrower shall have the option to pay all of
the outstanding principal balance of the Revolving Loans outstanding as of the
Maturity Date in sixteen (16) equal consecutive quarterly installments on the
last day of each March, June, September and December commencing with the first
of such dates to occur after the Maturity Date (each such date referred to
herein as a "Term Loan Amortization Date" and the last such date referred to
herein as the "Term Loan Termination Date"). The Borrower may exercise such
option by giving written notice to the Agent at least fifteen (15) days prior to
the Maturity Date. If the Agent does not receive such notification within the
time period specified in the preceding sentence (and unless such Maturity Date
has been extended in accordance with the terms of subsection (e) above), the
principal amount of all Revolving Loans shall be due and payable on the Maturity
Date. Revolving Loans remaining outstanding after the Maturity Date at the
election of the Borrower in accordance with the terms of this subsection (f)
shall be referred to collectively as the "Term Loans". The Term Loans may be
comprised of Base Rate Loans and Eurodollar Loans as the Borrower may elect in
accordance with the provisions hereof, and amounts repaid or prepaid on the Term
Loans may not be reborrowed. For purposes of this Agreement, in the event that
the Borrower shall elect to amortize the Revolving Loans outstanding as of the
Maturity Date in accordance herewith, then on and after the Maturity Date,
references herein to the "Revolving Committed Amount" shall mean the aggregate
principal amount of the Term Loans as of the Maturity Date less all payments
made or required to be made with respect to the Term Loans hereunder, whether
scheduled amortization payment, voluntary or optional prepayment, or otherwise.
(ii) Interest on Term Loans. It is the intention of the parties hereto that
the Term Loans bear interest on the same terms as apply to Revolving Loans prior
to the Maturity Date.
SECTION 2.02. Competitive Loan Subfacility.
(a) Competitive Loans. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, the Borrower may, from time
to time from the Closing Date until the earlier of the Maturity Date or the
termination of the Commitments hereunder, request and each Lender may, in its
sole discretion, agree to make Competitive Loans to the Borrower; provided,
however, (i) the aggregate principal amount of Competitive Loans outstanding
shall not at any time exceed the Revolving Committed Amount; and (ii) the sum of
Revolving Loans outstanding plus Competitive Loans outstanding shall not at any
time exceed the Revolving Committed Amount. Each Competitive Loan shall be
comprised entirely of Fixed Rate Loans. Each Competitive Loan shall be not less
than $5,000,000 in the aggregate and in integral multiples of $500,000 in excess
thereof (or the remaining portion of the Revolving Committed Amount, if less).
(b) Competitive Bid Requests. The Borrower may solicit Competitive Bids by
delivery of a Competitive Bid Request substantially in the form of Schedule 5 to
the Agent by 12:00 noon (Charlotte, North Carolina time) on a Business Day not
less than three (3) nor more than ten (10) Business Days prior to the date of a
requested Competitive Loan advance. A Competitive Bid Request (i) shall specify
(A) the date of the requested Competitive Loan advance (which shall be a
Business Day), (B) the amount of the requested Competitive Loan advance and (C)
the applicable Interest Periods requested, and (ii) shall be accompanied by
payment of the Competitive Bid Request Fee. The Agent shall notify the Lenders
of its receipt of a Competitive Bid Request and the contents thereof and invite
the Lenders to submit Competitive Bids in response thereto. No more than five
(5) Competitive Bid Requests (e.g., the Borrower may request Competitive Bids
for no more than five (5) different Interest Periods at a time) shall be
submitted at any one time.
(c) Competitive Bid Procedure. Each Lender may, in its sole discretion,
make one or more Competitive Bids to the Borrower in response to a Competitive
Bid Request. Each Competitive Bid must be received by the Agent not later than
10:00 a.m. (Charlotte, North Carolina time) on the proposed date of a
Competitive Loan advance; provided, however, that should the Agent, in its
capacity as a Lender, desire to submit a Competitive Bid it shall notify the
Borrower of its Competitive Bid and the terms thereof not later than 9:30 a.m.
(Charlotte, North Carolina time) on the proposed date of a Competitive Loan
advance. A Lender may offer to make all or part of the requested Competitive
Loan advance and may submit multiple Competitive Bids in response to a
Competitive Bid Request. The Competitive Bid shall specify (i) the particular
Competitive Bid Request as to which the Competitive Bid is submitted, (ii) the
minimum (which shall be not less than $1,000,000 and in integral multiples of
$500,000 in excess thereof) and maximum principal amounts of the requested
Competitive Loan or Loans as to which such Lender is willing to make, and (iii)
the applicable interest rate or rates and Interest Period or Periods therefor. A
Competitive Bid submitted by a Lender in accordance with the provisions hereof
shall be irrevocable. The Agent shall promptly notify the Borrower of all
Competitive Bids made and the terms thereof. The Agent shall send a copy of each
of the Competitive Bids to the Borrower for its records as soon as practicable.
(d) Acceptance of Competitive Bids. The Borrower may, in its sole and
absolute discretion, subject only to the provisions of this subsection (d),
accept or refuse any Competitive Bid offered to it. To accept a Competitive Bid,
the Borrower shall give written notification of its acceptance of any or all
such Competitive Bids to the Agent by 11:00 a.m. (Charlotte, North Carolina
time) on the proposed date of Competitive Loan advance; provided, however, (i)
the failure by the Borrower to give timely notice of its acceptance of a
Competitive Bid shall be deemed to be a refusal thereof, (ii) the Borrower may
accept Competitive Bids only in ascending order of rates, (iii) the aggregate
amount of Competitive Bids accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Bid Request, (iv) if the Borrower
shall accept a bid or bids made at a particular Competitive Bid Rate, but the
amount of such bid or bids shall cause the total amount of bids to be accepted
by the Borrower to be in excess of the amount specified in the Competitive Bid
Request, then the Borrower shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such bid
at such Competitive Bid Rate, and (v) no bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $1,000,000
and integral multiples of $500,000 in excess thereof, except that where a
portion of a Competitive Bid is accepted in accordance with the provisions of
subsection (iv) of this Section 2.02, then in a minimum principal amount of
$100,000 and integral multiples thereof (but not in any event less than the
minimum amount specified in the Competitive Bid), and in calculating the pro
rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to subsection (iv) of this Section 2.02, the
amounts shall be rounded to integral multiples of $100,000 in a manner which
shall be in the discretion of the Borrower. A notice of acceptance of a
Competitive Bid given by the Borrower in accordance with the provisions hereof
shall be irrevocable. The Agent shall, not later than 12:00 noon (Charlotte,
North Carolina time) on the proposed date of Competitive Loan advance, notify
each bidding Lender whether or not its Competitive Bid has been accepted (and if
so, in what amount and at what Competitive Bid Rate), and each successful bidder
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Loan in respect of which its bid has been accepted.
(e) Funding of Competitive Loans. Each Lender which is to make a
Competitive Loan shall make its Competitive Loan advance available to the Agent
by 2:00 P.M. (Charlotte, North Carolina time) on the date specified in the
Competitive Bid Request by deposit in dollars of immediately available funds at
the office of the Agent in Charlotte, North Carolina, or at such other address
as the Agent may designate in writing. The Agent shall, by 3:00 p.m. (Charlotte,
North Carolina time) on the same day, credit the amount so received to the
general deposit account of the Borrower with the Agent.
(f) Repayment of Competitive Loans. The Borrower hereby promises to pay to
each Competitive Loan Lender the principal amount of the Competitive Loans of
such Lender on the last day of the Interest Period applicable thereto; provided,
however, unless the Borrower shall give notice to the Agent otherwise, the
Borrower, subject to the provisions of Section 5.02, shall be deemed to have
requested a Revolving Loan comprised solely of Base Rate Loans in the amount of
a maturing Competitive Loan, the proceeds of which will be used to repay such
Competitive Loan.
(g) Interest. (i) Interest Rates. Subject to the provisions of Section
3.01, each Competitive Loan shall bear interest at the Competitive Bid Rate
applicable thereto.
(ii) Payment of Interest. The Borrower hereby promises to pay to each
Competitive Loan Lender on each applicable Interest Payment Date (or at such
other times as may be specified herein) accrued interest on the Competitive
Loans made by such Lender.
SECTION 2.03. Termination and Reduction of Commitments. The Borrower may
from time to time permanently reduce or terminate the aggregate Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of the lesser
of $5,000,000 or the full remaining amount of the Revolving Committed Amount)
upon three Business Days' prior written notice to the Agent; provided, however,
no such termination or reduction shall be made which would reduce the Revolving
Committed Amount to an amount less than the sum of Revolving Loans outstanding
plus Competitive Loans outstanding. The Commitments of the Lenders to make,
extend or convert Revolving Loans shall automatically terminate on the Maturity
Date. The Agent shall promptly notify each of the Lenders of receipt by the
Agent of any notice from the Borrower pursuant to this Section 2.03.
SECTION 2.04. Fees.
(a) Unused Fee. In consideration of the Revolving Committed Amount made
available by the Lenders hereunder, the Borrower agrees to pay to the Agent for
the account of the Lenders a fee (the "Unused Fee") computed at a per annum rate
for each day during the applicable Unused Fee Calculation Period (hereinafter
defined) equal to the Applicable Margin for the Unused Fee on the Unused
Revolving Committed Amount. The accrued Unused Fee shall be due and payable in
arrears on the fifteenth (15th) day of each January, April, July and October
(and on the Maturity Date and on any date that the Revolving Committed Amount is
reduced as provided in Section 2.03 or as otherwise provided herein) for the
immediately preceding fiscal quarter (or portion thereof) (each such fiscal
quarter or portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date.
(b) Agent's Fee. The Borrower agrees to pay to the Agent, for its own
account or for the account of NationsBanc Capital Markets, Inc., as applicable,
the structuring, administrative and other fees referred to in the Agent's Fee
Letter (the "Agent's Fees").
(c) Competitive Bid Request Fee. The Borrower shall pay to the Agent for
its own account, a fee of $1,000 (the "Competitive Bid Request Fee") for each
Competitive Bid Request, such fee to be payable concurrently with delivery of
such Competitive Bid Request (whether or not any Competitive Bid is offered by a
Lender, accepted by the Borrower or extended by the offering Lender pursuant
thereto).
ARTICLE III. ADDITIONAL PROVISIONS REGARDING LOANS
SECTION 3.01. Default Rate. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing hereunder or
under the other Credit Documents shall bear interest, payable on demand, at a
per annum rate 2% greater than the rate which would otherwise be applicable.
SECTION 3.02. Prepayments.
(a) Revolving Loans. The Borrower shall have the right to prepay Revolving
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (A) each such partial prepayment shall be a minimum
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (B) no Eurodollar Loan may be prepaid prior to the last day of the
Interest Period applicable thereto unless accompanied by payment of amounts
specified in Section 3.07. Amounts prepaid on the Revolving Loans may be
reborrowed in accordance with the provisions hereof.
(b) Competitive Loans. Competitive Loans may not be prepaid unless
accompanied by payment of amounts specified in Section 3.07.
(c) Term Loans. The Borrower shall have the right to prepay Term Loans in
whole or in part from time to time without premium or penalty; provided,
however, that (A) each such partial prepayment shall be a minimum principal
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
(B) no Eurodollar Loan may be prepaid prior to the last day of the Interest
Period applicable thereto unless accompanied by payment of amounts specified in
Section 3.07. Amounts prepaid on the Term Loans may not be reborrowed.
(d) Application. Amounts prepaid hereunder shall be applied to the
Revolving Loans and the Competitive Loans as the Borrower may elect, provided
that, if the Borrower shall fail to specify its application, prepayments shall
be applied first to Revolving Loans (and with respect to Base Rate Loans and
Eurodollar Loans comprising such Loans, first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities) and then to the
Competitive Loans (in direct order of Interest Period maturities); provided
further that, during the Term Loan Amortization Period, amounts prepaid
hereunder shall be applied ratably to the remaining principal installments of
the Term Loans (and with respect to Base Rate Loans and Eurodollar Loans
comprising such Loans, first to Base Rate Loans and then to Eurodollar Loans in
direct order of interest period maturities).
(e) General. All prepayments of Loans shall be subject to Section 3.07 but
otherwise without premium or penalty and shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment and all
other amounts due and payable hereunder with respect to such Loans.
SECTION 3.03. Extension and Conversion. The Borrower shall have the option,
on any Business Day, to extend existing Revolving Loans into a subsequent
Interest Period or to convert Revolving Loans into Revolving Loans of another
type; provided, however, that (i) except as provided in Section 3.06, Eurodollar
Loans may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Revolving
Loans extended as, or converted into, Eurodollar Loans shall be in such minimum
amounts as provided in Section 2.01(b) and (iv) any request for extension or
conversion of a Eurodollar Loan which shall fail to specify an Interest Period
shall be deemed to be a request for an Interest Period of one month. Competitive
Loans may not be converted or extended pursuant to this Section 3.03. Each such
extension or conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan and
on the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Revolving Loans to be so extended or converted, the
types of Loans into which such Revolving Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall constitute a representation and warranty by
the Borrower of the matters specified in Section 5.02(b), (c) and (d). In the
event the Borrower fails to request extension or conversion of any Eurodollar
Loan in accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Loans shall be automatically
converted into Base Rate Loans at the end of their Interest Period. The Agent
shall give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Revolving Loan.
SECTION 3.04. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan (i) the Agent shall have determined in
good faith that dollar deposits in the principal amounts of such Eurodollar Loan
are not generally available in the London interbank market, (ii) the Agent shall
have determined in good faith that reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate or (iii) any Lender shall have
notified the Agent that such Lender shall have determined in good faith that,
with respect to any requested Eurodollar Loan for an Interest Period of one (1)
week, dollar deposits in the principal amount of such Lender's Eurodollar Loan
are not available to such Lender in the London interbank market, the Agent
shall, as soon as practicable thereafter, give telex or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination under clause (i) or (ii) above, until the Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, (A) any request by the Borrower pursuant to Section 2.01(b) for
a Eurodollar Loan shall be deemed to be a request for a Base Rate Loan and (B)
any request by the Borrower pursuant to Section 3.03 for conversion into or
extension of a Eurodollar Loan shall be deemed to be a request for conversion
into or extension of a Base Rate Loan. In the event of any such determination
under clause (iii) above, until the Agent shall have advised the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(A) any request by the Borrower pursuant to Section 2.01(b) for a Eurodollar
Loan having an Interest Period of one (1) week shall be deemed to be a request
for a Base Rate Loan and (B) any request by the Borrower pursuant to Section
3.03 for conversion into or extension of a Eurodollar Loan having an Interest
Period of one (1) week shall be deemed to be a request for conversion into or
extension of a Base Rate Loan. Each determination hereunder by the Agent or any
Lender, as applicable, shall be in good faith and shall be conclusive absent
manifest error.
SECTION 3.05. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by such Lender, or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement, such Lender's
Commitment or any Loan made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
such Loan or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
in accordance with paragraph (c) below upon demand such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender shall have determined that after the date of this
Agreement the applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards," or the adoption after
the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
any Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement, such Lender's Commitment or
any Loan made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
and the policies of such Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time the Borrower shall pay to such Lender in accordance with paragraph (c)
below such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate signed by a duly authorized officer of a Lender setting
forth such amount or amounts (including computation of such amount or amounts)
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) above, as the case may be, shall be delivered to the
Borrower and the Agent, and the Borrower shall pay to such Lender, within 30
Business Days after receipt by the Borrower of such certificate delivered by the
Lender, the amount shown as due on any such certificate.
(d) Notwithstanding the foregoing, if any Lender fails to notify the
Borrower of any event that will entitle such Lender to compensation pursuant to
paragraph (a) above, as the case may be, within 90 days after such Lender
becomes aware of such event, then such Lender shall not be entitled to any
compensation from the Borrower for any increased costs or reduction in amounts
received or receivable or reduction in return on capital arising prior to the
date that is 90 days before the date on which such Lender notifies the Borrower
of such event. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed. Each determination by a Lender under this Section
3.05 shall be in good faith and shall be conclusive absent manifest error.
SECTION 3.06. Change in Legality. (a) Notwithstanding any other provision
herein, if any change in any law or regulation or in the interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by 30 days' (or such shorter period as shall be
required in order to comply with applicable law) written notice to the Borrower
and to the Agent, such Lender may:
(i)declare that Eurodollar Loans, and conversions into or
extensions of Eurodollar Loans, will not thereafter be made by such Lender
hereunder, whereupon any request by the Borrower for, or for conversion
into or extension of, a Eurodollar Loan shall, as to such Lender only, be
deemed a request for, or for conversion into or extension of, a Base Rate
Loan, unless such declaration shall be subsequently withdrawn; and
(ii)require that all outstanding Eurodollar Loans made by it be
converted to Base Rate Loans, in which event all such Eurodollar Loans
shall be automatically converted to Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 3.06, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower. Each determination by a Lender under this Section 3.06 shall be in
good faith and shall be conclusive absent manifest error.
SECTION 3.07. Indemnity. The Borrower shall indemnify each Lender against
any loss, cost or expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to borrow or to refinance,
convert or extend any Loan hereunder after notice of such borrowing,
refinancing, conversion or extension has been given pursuant to Section 2.01,
2.02, 2.03 or 3.03, or (b) any payment, prepayment or conversion by the Borrower
of a Eurodollar Loan or a Competitive Loan required by any other provision of
this Agreement or otherwise made or deemed made on a date other than the last
day of the Interest Period, if any, applicable thereto. In the case of any such
event, the Borrower shall, upon demand by such Lender (with a copy of such
demand to the Agent), pay to such Lender any amounts required to compensate such
Lender for any reasonable loss, cost or expense which such Lender may incur as a
result of such action or inaction by the Borrower, including without limitation
any reasonable loss, cost or expense incurred by reason, of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Loan or proposed Loan. Each determination by a Lender under this
Section 3.07 shall be in good faith and shall be conclusive absent manifest
error.
SECTION 3.08. Mandatory Assignment; Commitment Termination. In the event
any Lender either (i) delivers to the Agent or the Borrower, as appropriate, a
certificate in accordance with Section 3.05(c) or a notice in accordance with
Section 3.06 or (ii) becomes a Disapproving Lender, then, provided that no
Default or Event of Default has occurred and is continuing at such time, the
Borrower may, at its own expense (such expense to include any transfer fee
payable to the Agent under Section 11.04(b)), and in its sole discretion (a)
require such Lender to transfer and assign in whole or in part, without recourse
(in accordance with and subject to the terms and conditions of Section
11.04(b)), all or part of its interests, rights and obligations under this
Agreement to an assignee which shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority and (ii) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder or (b) terminate
the Commitment of such Lender and prepay all outstanding Loans of such Lender;
provided that (i) such termination of the Commitment of such Lender and
prepayment of Loans does not conflict with any law, rule or regulation or order
of any court or other Governmental Authority and (ii) the Borrower shall have
paid to such Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder.
ARTICLE IV. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; U.S. TAXES; EVIDENCE
OF LOANS
SECTION 4.01. Payments and Computations. Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Agent in dollars in
immediately available funds, without offset, deduction or withholding of any
kind, at its offices at NationsBank Corporate Center, Charlotte, North Carolina
not later than 2:00 p.m. (Charlotte, North Carolina time) on the date when due.
The Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Agreement, specify to the
Agent the Loans, Fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 4.02). The Agent will thereafter
cause to be distributed promptly on the same day like funds relating to the
payment of principal or interest or Fees ratably to the Lenders entitled to
receive such payments in accordance with the terms of this Agreement. Whenever
any payment hereunder 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
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days. Interest shall
accrue from and include the date of advance, but exclude the date of payment.
SECTION 4.02. Pro Rata Treatment. Except to the extent otherwise provided
herein, each Revolving Loan, each payment or prepayment of principal of any
Revolving Loan, each payment of interest on the Revolving Loans, each payment of
Unused Fees, each reduction of the Revolving Committed Amount and each
conversion or extension of any Revolving Loan, shall be allocated pro rata among
the Lenders in accordance with their respective Commitment Percentages. With
respect to Competitive Loans, if the Borrower fails to specify the particular
Competitive Loan or Loans as to which any payment or other amount should be
applied and it is not otherwise clear as to the particular Competitive Loan or
Loans to which such payment or other amounts relate, or any such payment or
other amount is to be applied to Competitive Loans without regard to any such
direction by the Borrower, then each payment or prepayment of principal on
Competitive Loans and each payment of interest or other amount on or in respect
of Competitive Loans, shall be allocated pro rata among the relevant Competitive
Loan Lenders in accordance with the then outstanding amounts of their respective
Competitive Loans.
SECTION 4.03. Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Loan or
other obligation owing to such Lender under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
pro rata share as provided for in this Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or must
otherwise be restored, each Lender which shall have shared the benefit of such
payment shall, by repurchase of a participation theretofore sold, return its
share of that benefit (together with its share of any accrued interest payable
with respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker's lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan or
other obligation in the amount of such participation. Except as otherwise
expressly provided in this Agreement, if any Lender or the Agent shall fail to
remit to the Agent or any other Lender an amount payable by such Lender or the
Agent to the Agent or such other Lender pursuant to this Agreement on the date
when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Effective Rate.
SECTION 4.04. U.S. Taxes. (a) The Borrower agrees to pay to each Lender
that is not a U.S. Person (a "Foreign Lender") such additional amounts as are
necessary in order that the net payment of any amount due to such Foreign Lender
hereunder after deduction for or withholding in respect of any U.S. Taxes
imposed with respect to such payment (or in lieu thereof, payment of such U.S.
Taxes by such Foreign Lender), will not be less than the amount stated herein to
be then due and payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(i)to any payment to any Foreign Lender hereunder unless such
Foreign Lender is, on the date hereof (or on the date it becomes a Lender
as provided in Section 11.04(b)) and on the date of any change in the
applicable lending office of such Foreign Lender, either entitled to submit
a Form 1001 (relating to such Foreign Lender and entitling it to a complete
exemption from withholding on all interest to be received by it hereunder
in respect of the Loans) or Form 4224 (relating to all interest to be
received by such Foreign Lender hereunder in respect of the Loans); and any
Foreign Lender that is, on the date hereof (or on the date that it becomes
a Lender as provided in Section 11.04(b)) and on the date of any change in
its applicable lending office, entitled to submit a Form 1001 or a Form
4224 will submit such Form in duplicate to the Borrower, with a copy to the
Agent at such time; or
(ii)to any U.S. Tax imposed solely by reason of the failure by
such Foreign Lender to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity, or connections with the United States of America of
such Foreign Lender if such compliance is required by statute or regulation
of the United States of America as a precondition to relief or exemption
from such U.S. Taxes.
For the purposes of this Section 4.04(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), (y) "U.S. Person" shall mean a citizen, national or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United States of
America, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof or
herein.
(b) Within thirty (30) days after paying any amount to the Agent or any
Foreign Lender from which it is required by law to make any deduction or
withholding, and within thirty (30) days after it is required by law to remit
such deduction or withholding to any relevant taxing or other authority, the
Borrower shall deliver to the Agent for delivery to such Foreign Lender evidence
satisfactory to such Foreign Lender of such deduction, withholding or payment
(as the case may be).
SECTION 4.05. Evidence of Loans. (a) Each Lender shall maintain an account
or accounts evidencing each Loan made by such Lender to the Borrower from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement. Each Lender will make
reasonable efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain a register and a subaccount for each Lender,
in which register and subaccounts (taken together) shall be recorded (i) the
amount, type and Interest Period of each Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
from or for the account of the Borrower and each Lender's share thereof. The
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, register and subaccounts maintained
pursuant to paragraphs (a) and (b) of this Section 4.05 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Agent to maintain any such account, such
register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.01. Conditions to Initial Loans. The obligation of each Lender
to make its initial Loans is subject to the satisfaction of the following
conditions on or prior to the Closing Date:
(a) The Agent shall have received counterparts hereof signed by
each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received in form satisfactory to it telegraphic, facsimile, telex or other
written confirmation from such party of execution of a counterpart hereof
by such party);
(b)There shall not have occurred since September 30, 1995, any
material adverse change with respect to the consolidated financial
condition of the Borrower except as otherwise disclosed on Schedule 9;
(c) There shall not exist any action, suit or proceeding, pending
or threatened, in which there is a reasonable possibility of an adverse
decision, which would materially adversely affect the ability of the
Borrower to perform its obligations under the Credit Documents or the
ability of the Lenders to exercise their rights thereunder;
(d)The Agent and each Lender shall have received a legal opinion
of R. W. Lockwood, Esq., General Counsel of the Borrower, dated as of the
Closing Date and substantially in the form of Schedule 6;
(e) The Agent and each Lender shall have received a legal opinion
of Moore & Van Allen, PLLC, counsel to the Agent, dated as of the Closing
Date and substantially in the form of Schedule 7;
(f) The Agent shall have received all documents it may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of each of the Credit Documents, and any other matters
relevant hereto, all in form and substance reasonably satisfactory to the
Agent;
(g) The representations and warranties set forth in Article VI
shall be true and correct in all material respects as of the Closing Date;
(h) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(i) The Agent shall have received satisfactory evidence that
Guaranties with respect to those 8-3/4% Notes due September 15, 2004 issued
by the Borrower shall, contemporaneously with the termination of the
Existing Credit Agreement in accordance with the terms of Section 11.03, be
of no further force or effect; and
(j) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the Agent.
SECTION 5.02. Each Loan. The obligation of each Lender to make, convert or
extend any Loan is subject to satisfaction of the following conditions in
addition to satisfaction on the Closing Date of the conditions set forth in
Section 5.01:
(a) (i) In the case of any Revolving Loan, the Agent shall have
received an appropriate Notice of Borrowing or Notice of
Extension/Conversion; (ii) in the case of any Competitive Loan, the
applicable Competitive Loan Lender shall have received an appropriate
notice of acceptance of its related Competitive Bid; and (iii) in the case
of any Term Loan, the Agent shall have received notice pursuant to the
terms of Section 2.01(f)(i);
(b) The representations and warranties set forth in Article VI
shall be true and correct in all material respects as of such date (except
for those which expressly relate to an earlier date);
(c) There shall not have been commenced against the Borrower an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Borrower or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded; and
(d) No Default or Event of Default shall exist and be continuing either
prior to or after giving effect thereto.
The delivery of each Notice of Borrowing and each Notice of
Extension/Conversion, each request for a Competitive Bid pursuant to a
Competitive Bid Request shall constitute a representation and warranty by the
Borrower of the correctness of the matters specified in subsections (b), (c) and
(d) above.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Lender that:
SECTION 6.01. Corporate Organization and Validity. (a) The Borrower and
each of its Material Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Borrower and its Material Subsidiaries is duly
qualified, is validly existing and in good standing and has lawful power and
authority to engage in the business it conducts in each jurisdiction where it
conducts its business, except where the failure to so qualify, exist, be in good
standing or have power and authority to conduct such business would not have a
Material Adverse Effect.
(b) The execution, delivery and performance of the Credit Documents will
not violate any law, government rule or regulation, any judgment, injunction,
order or decree binding upon the Borrower or the charter, minutes or bylaw
provisions of the Borrower or violate or result in a default (immediately or
with the passage of time or upon the giving of notice or both) under any
contract, agreement, or instrument to which any of the Borrower or its Material
Subsidiaries is a party, or by which it is bound. Neither the Borrower nor any
of its Material Subsidiaries is in violation of any terms of any agreement,
instrument, judgment, injunction, order or decree to which it is a party or by
which it may be bound or of its charter, minutes or its bylaws, which violation
could have a Material Adverse Effect.
(c) The Borrower has all requisite corporate power and authority to enter
into and perform the Credit Documents and to incur the obligations herein and
therein provided for, and has taken all proper and necessary corporate action to
authorize the execution, delivery and performance of the Credit Documents.
(d) Each Credit Document has been duly executed and delivered and is a
legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms (subject to bankruptcy, insolvency,
moratorium or other laws and equitable principles relating to or affecting
creditors' rights generally).
SECTION 6.02. Pending Litigation. There have been no judgments issued
against and there are no judicial, administrative or arbitration orders, awards
or proceedings pending, or to the knowledge of the Borrower, threatened against
or affecting the Borrower or any of its Subsidiaries in any court or before any
governmental authority or arbitration board or tribunal which may have a
Material Adverse Effect, except as shown on Schedule 8. Neither the Borrower nor
any of its Subsidiaries is in default with respect to any order of any court,
governmental authority, regulatory agency or arbitration board or tribunal,
which default would have a Material Adverse Effect.
SECTION 6.03. Title to Properties. Each of the Borrower and its
Subsidiaries has good and marketable title (or its equivalent under applicable
law) to all the Property it purports to own which is material to the operation
of its business, free from Liens and the claims of any third party, except for
Permitted Liens.
SECTION 6.04. Patents and Trademarks. Each of the Borrower and its
Subsidiaries owns or has the right to use all of the material patents, patent
applications, trademarks, trademark registrations, trademark applications,
service marks, service mark registrations, service mark applications, trade
names, trade name registrations, trade name applications, copyrights, copyright
registrations, copyright applications, franchises, licenses and rights with
respect to the foregoing necessary for the present conduct of its business,
without any known conflict with the rights of others, excluding conflicts that
are not reasonably expected to have a material adverse effect on the
consolidated financial condition of the Borrower.
SECTION 6.05. Governmental Consent. No consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority on
the part of the Borrower is required in conjunction with the execution, delivery
or performance of the Credit Documents.
SECTION 6.06. Taxes. All tax returns required to be filed by the Borrower
or any of its Subsidiaries in any jurisdiction have in fact been filed, and all
taxes, assessments, fees and other governmental charges upon any such member, or
upon any of its Property, income or franchises, which are due and payable have
been paid, except for those taxes being contested in good faith with due
diligence by appropriate proceedings for which appropriate reserves have been
maintained under GAAP. The Borrower is not aware of any proposed tax assessments
against it or any of its Subsidiaries, the payment of which could reasonably be
expected to have a material adverse effect on the consolidated financial
condition of the Borrower.
SECTION 6.07. Financial Statements. The consolidated balance sheet of the
Borrower and its Subsidiaries at September 30, 1995, and the related statements
of earnings and retained earnings for each of the three fiscal year periods then
ended, all accompanied by unqualified reports thereon from Price Waterhouse
(complete copies of which have been delivered to each of the Lenders), have been
prepared in accordance with GAAP and present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as of such
date and the results of the consolidated operations of the Borrower and its
Subsidiaries for each such period. The unaudited consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries at December 31, 1995, and
the related statements of earnings and retained earnings for the nine months
then ended (complete copies of all of which have been delivered to each of the
Lenders), have been prepared in accordance with GAAP and present fairly in all
material respects the consolidated and consolidating financial condition of the
Borrower and its Subsidiaries as of such date and the result of its consolidated
and consolidating operations for such period, subject to changes resulting from
normal year-end audit adjustments. Except as otherwise permitted by Section
8.09, the fiscal year of the Borrower and each of its Subsidiaries ends on
September 30. As of the Closing Date, there has been no material adverse change
since September 30, 1995, with respect to the consolidated financial condition
of the Borrower except as otherwise disclosed on Schedule 9.
SECTION 6.08. Full Disclosure. None of the financial statements referred to
in Section 6.07 contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein or
herein not misleading.
SECTION 6.09. Funded Indebtedness. Neither the Borrower nor any of its
Subsidiaries has any Funded Indebtedness except (i) as disclosed in the
financial statements referenced in Section 6.07 or (ii) as permitted by
Section 8.01.
SECTION 6.10. Affiliates and Subsidiaries. (a) Set forth in Schedule 10
is a complete and accurate list as of the Closing Date of all Affiliates of the
Borrower or any of its Subsidiaries.
(b) Set forth in Schedule 11 is a complete and accurate list as of the
Closing Date of all direct and indirect Subsidiaries of the Borrower.
SECTION 6.11. Governmental Regulations, Etc.. (a) The use of the Loans or
the proceeds thereof by the Borrower, will not directly or indirectly violate or
result in a violation of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation U, G, T or X. The Borrower does not own or intend to
carry or purchase any "margin security" within the meaning of said Regulations.
(b) Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, neither the Borrower nor any of its Subsidiaries
is (i) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(c) No director, executive officer or principal shareholder of the Borrower
is a director, executive officer or principal shareholder of any Lender, except
for W. P. Stiritz, who is a director of The Boatman's National Bank. For the
purposes hereof the terms "director", "executive officer" and "principal
shareholder" (when used with reference to any Lender) have the respective
meanings assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has obtained all material
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its respective Property and to the conduct of its business, the
absence of which would likely have a material adverse effect on the consolidated
financial condition of the Borrower.
(e) Neither the Borrower nor any of its Subsidiaries is in material
violation of any applicable statute, regulation or ordinance of the United
States of America, or of any state, city, town, municipality, county or any
other jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations).
(f) Each of the Borrower and its Subsidiaries is current with all reports
and documents, if any, required to be filed with any state or federal securities
commission or similar agency and is in full compliance in all material respects
with all applicable rules and regulations of such commissions.
SECTION 6.12. Environmental Matters. The Borrower has no knowledge after
reasonable inquiry, except as disclosed on Schedule 12, of any spills, releases,
discharges or disposals of Hazardous Substances (as defined herein) by the
Borrower, any of its Subsidiaries or any third party that have occurred or are
currently occurring on any of the real property on which the Borrower or any of
its Subsidiaries conducts its business in a quantity in excess of the current
reportable quantity established pursuant to any applicable environmental
statute, rule or regulation of any Governmental Authority currently in effect
that could result in any liability of the Borrower or any of its Subsidiaries
under such law and that could reasonably be expected to have a material adverse
effect on the consolidated financial condition of the Borrower. As used herein,
the term "Hazardous Substances" with respect to a real property means any
substance defined or designated as hazardous or toxic waste, hazardous or toxic
material, hazardous or toxic substance or similar term, by any environmental
statute, rule or regulation of any Governmental Authority currently in effect
and applicable to such real property.
SECTION 6.13. Solvency. As of the Closing Date after giving effect to all
transactions contemplated by the Credit Documents to occur on such date, the
Borrower is Solvent.
SECTION 6.14. ERISA. (a) (i) No steps have been taken or proceedings have
been instituted, or, to the knowledge of the Borrower, planned, to terminate any
Plan where such termination could give rise to any liability under Title IV of
ERISA and no contribution failure has occurred with respect to any Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA and (ii) neither
the Borrower, any of its Material Subsidiaries nor any ERISA Affiliate has
withdrawn or instituted steps to withdraw from any Multiemployer Plan, which
withdrawal has resulted or could result in the incurrence by the Borrower or any
of its Material Subsidiaries of liability that could reasonably be expected to
have a material adverse effect on the consolidated financial condition of the
Borrower.
(b) The Borrower has no knowledge of any circumstances likely to cause the
PBGC to institute steps to terminate any Material Plans. No condition exists or
event or transaction has occurred in connection with any Plan which could result
in the incurrence by the Borrower or any of its Material Subsidiaries of any
liability, fine or penalty that could reasonably be expected to have a material
adverse effect on the consolidated financial position of the Borrower.
ARTICLE VII. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Agreement is
in effect or any Loans or any other amounts payable hereunder shall remain
outstanding, and until all of the Commitments hereunder shall have terminated:
SECTION 7.01. Information Covenants. The Borrower will furnish, or cause
to be furnished, to the Agent and each Lender:
(a) Annual Financial Statements. As soon as available and in any
event within 95 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal year together with related consolidated statements of
income and retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated figures as of the end of and
for the preceding fiscal year, all in reasonable detail and examined by
Price Waterhouse, or other independent certified public accountants of
recognized national standing acceptable to the Required Lenders and whose
opinion shall be to the effect that such consolidated financial statements
have been prepared in accordance with GAAP (except for changes with which
such accountants concur) and shall not be qualified as to the scope of the
audit or as to the status of the Borrower or any of its Subsidiaries as a
going concern. It is specifically understood and agreed that failure of the
annual financial statements to be accompanied by an opinion of such
accountants in form and substance as provided herein or by a certificate of
such accountants as referred to in paragraph (d) below shall constitute a
Default.
(b) Quarterly Financial Statements. As soon as available and in
any event within 50 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, an unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
quarterly period together with related consolidated statements of income
and of cash flows for such quarterly period and for the portion of the
fiscal year ending with such period, in each case setting forth in
comparative form unaudited consolidated figures for the corresponding date
or period of the preceding fiscal year, all in reasonable form and detail
acceptable to the Required Lenders, and accompanied by a certificate of the
chief financial officer, controller or treasurer of the Borrower as having
been prepared in accordance with GAAP and as presenting fairly in all
material respects the consolidated financial condition of the Borrower and
its Subsidiaries as of the date of such financial statements, subject to
changes resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of the chief financial officer, controller or treasurer of the
Borrower substantially in the form of Schedule 13 to the effect that the
Borrower is in substantial compliance with the terms of this Agreement and
that no Default or Event of Default exists, or if any Default or Event of
Default does exist specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto. In addition, such
certificate shall demonstrate compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period.
(d) Accountant's Certificate. Within the period for delivery of
the annual financial statements provided in Section 7.01(a), a certificate
of the accountants conducting the annual audit stating that in the course
of its regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted in accordance with generally accepted auditing
standards (including tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances),
they have reviewed this Agreement and they have obtained no knowledge of
any violation of any of the financial covenants set forth in Section 7.11
or, if in the opinion of such accounting firm such a violation has occurred
and is continuing, a statement as to the nature thereof, all of the
foregoing to be in reasonable detail and in form and substance satisfactory
to the Required Lenders.
(e) SEC and Other Reports. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the
Securities and Exchange Commission, or any successor agency, by the
Borrower or any of its Subsidiaries, and copies of all financial
statements, proxy statements, notices and reports as the Borrower or its
Subsidiaries shall send to its shareholders or to the holders of any other
Funded Indebtedness in their capacity as such holders.
(f) Other Information. With reasonable promptness upon any such
request, such other information not otherwise required to be delivered by
any other provision of this Agreement regarding the business, properties or
financial condition of the Borrower and its Subsidiaries as the Agent or
the Required Lenders may reasonably request (any such information being
collectively referred to for purposes of this paragraph (f) as "Additional
Information"); provided, however, that if the Borrower reasonably believes
that any material interests of the Borrower or any of its Subsidiaries
relating to any such Additional Information which is non-public,
confidential or proprietary in nature are not adequately protected in
connection with the delivery of such Additional Information to the Agent
and the Lenders by any then existing confidentiality agreements entered
into by the Agent and the Lenders with respect to the Borrower and its
Subsidiaries, then the Borrower shall not be required to deliver such
Additional Information pursuant to this paragraph (f) until the Agent and
the Lenders shall have executed an additional confidentiality agreement
regarding such Additional Information in form and substance mutually
satisfactory to the Borrower and the Lenders.
(g) Notice of Default or Litigation. Upon the Borrower obtaining
knowledge thereof, written notice to the Agent and the Lenders (i)
immediately, of the occurrence of an event or condition consisting of a
Default or Event of Default, specifying the nature and existence thereof
and what action the Borrower proposes to take with respect thereto, and
(ii) promptly, but in any event within five (5) Business Days, of the
occurrence of any of the following with respect to the Borrower or any of
its Subsidiaries which are, individually or collectively, likely to have a
Material Adverse Effect: (A) the pendency or commencement of any
litigation, arbitral or governmental proceedings against the Borrower or
any of its Subsidiaries, (B) any one or more levies of an attachment,
executions or other processes against any Property of the Borrower or any
of its Subsidiaries, (C) the occurrence of an event or condition which
shall constitute a default or event of default with respect to any Funded
Indebtedness of the Borrower or any of its Subsidiaries (other than Funded
Indebtedness outstanding under this Agreement and the other Credit
Documents) or (D) any notice or determination concerning the imposition of
any withdrawal liability by a Multiemployer Plan against the Borrower, any
of its Material Subsidiaries or any ERISA Affiliate.
SECTION 7.02. Preservation of Existence and Franchises. Except as otherwise
permitted under Section 8.04, the Borrower 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, rights, franchises and authority,
unless the failure to do so is not likely to have a Material Adverse Effect.
SECTION 7.03. Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep books and records of its transactions in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves). The Borrower will, and
will cause each of its Subsidiaries to, permit on reasonable notice officers or
designated representatives of the Agent to visit and inspect its books of
account and records and any of its properties or assets (in whomever's
possession) up to 2 times during each calendar year and to permit the Agent to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with, and be advised as to the same by, its and their officers, directors and
independent accountants; provided, however, that if the Borrower reasonably
believes that any material interests of the Borrower or any of its Subsidiaries
relating to any non-public, confidential or proprietary information which could
become available to the Agent during the course of such inspections or such
discussions are not adequately protected by any then existing confidentiality
agreements entered into by the Agent and the Lenders with respect to the
Borrower and its Subsidiaries, then the Agent shall not be entitled to make any
such inspections or to have any such discussions, as the case may be, pursuant
to this Section 7.03 until the Agent and the Lenders shall have executed an
additional confidentiality agreement regarding such non-public, confidential or
proprietary information in form and substance mutually satisfactory to the
Borrower and the Lenders.
SECTION 7.04. Compliance with Law. The Borrower will, and will cause each
of its Subsidiaries to, comply in all material respects with all laws, rules,
regulations and orders of, and all restrictions imposed by, any Governmental
Authority, applicable to it or its Subsidiaries or its or their Property, the
violation of which is likely to have a Material Adverse Effect.
SECTION 7.05. Payment of Taxes and Other Claims. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge (i) all material
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income or profits, or upon any of its Property, before they shall become
delinquent and (ii) all material lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien or charge
upon any of its Property; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP.
SECTION 7.06. Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice for
consumer food companies with similar sales and profits.
SECTION 7.07. Maintenance of Property. The Borrower will, and will cause
each of its Subsidiaries to, maintain and preserve its material properties and
equipment used or useful in its business (in whomsoever's possession as they may
be) in good repair, working order and condition, normal wear and tear excepted,
and will make, or cause to be made, in such properties and equipment from time
to time all repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses, unless the failure to do
so is not likely to have a material adverse effect on the conduct of the
operations of the Borrower and its Subsidiaries taken as a whole.
SECTION 7.08. Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound, unless the failure to do so is not likely to have a material
adverse effect on the conduct of the operations of the Borrower and its
Subsidiaries taken as a whole.
SECTION 7.09. ERISA. The Borrower will, and will cause each of its
Subsidiaries to, at all times, make prompt payment when due of all contributions
required under all Plans and required to meet the minimum funding standard set
forth in ERISA with respect to its Plans. The Borrower will not, nor will it
permit any of its Subsidiaries or ERISA Affiliates to, (i) terminate a Plan or
withdraw from any Multiemployer Plan or (ii) cause or permit to exist any
condition under Section 4.02(a) of ERISA or other event or condition which
presents a material risk of termination of a Plan at the request of the PBGC,
the result of which would be to cause the Borrower and its Subsidiaries to incur
a present liability which would result in the occurrence of a Default under
Section 9.01(f).
SECTION 7.10. Use of Proceeds. The proceeds of the Loans hereunder shall be
used, subject to the terms of Section 8.05 and Section 8.07, to refinance
existing indebtedness of the Borrower under the Existing Credit Agreement and
for the working capital and the general corporate purposes (including, without
limitation, acquisitions) of the Borrower and its Subsidiaries.
SECTION 7.11. Financial Covenants.
(a) Consolidated Debt Coverage Ratio. The Borrower shall cause the
Consolidated Debt Coverage Ratio at each Calculation Date to be no greater
than 3.25 to 1.00.
(b) Consolidated Interest Coverage Ratio. The Borrower shall cause the
Consolidated Interest Coverage Ratio at each Calculation Date to be no less than
3.00 to 1.00.
(c) Consolidated Net Worth. The Borrower shall cause Consolidated Net
Worth at all times to be no less than $105,000,000.
SECTION 7.12. Domestic Revenues. The Borrower shall cause the majority of
revenues of the Borrower and its consolidated Subsidiaries for all periods
subsequent to the Closing Date to be generated by Property owned or held by one
or more of the Borrower and its Domestic Subsidiaries.
ARTICLE VIII. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Agreement is
in effect or any Loans or any other amounts payable hereunder shall remain
outstanding, and until all of the Commitments hereunder shall have terminated:
SECTION 8.01. Funded Indebtedness. The Borrower will not, nor will it
permit any of its Subsidiaries to, contract, create, incur, assume or permit
to exist any Funded Indebtedness, except:
(a) Funded Indebtedness arising under this Agreement and the
other Credit Documents;
(b) Funded Indebtedness existing as of the Closing Date and
disclosed in the financial statements referenced in Section 6.07 (and
renewals, refinancings or extensions thereof on terms and conditions no
less favorable to the applicable obligor than such existing Funded
Indebtedness and in a principal amount not in excess of that outstanding as
of the date of such renewal, refinancing or extension);
(c) Funded Indebtedness incurred or arising under or in
connection with Permitted Liens;
(d) purchase money Funded Indebtedness (including Capital Leases)
hereafter incurred by the Borrower or any of its Subsidiaries to finance
the purchase of fixed assets provided that (i) the total of all such Funded
Indebtedness for the Borrower and its Subsidiaries shall not exceed an
aggregate principal amount of $50,000,000 at any time outstanding; (ii)
such Funded Indebtedness when incurred shall not exceed the purchase price
of the assets financed; and (iii) no such Funded Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(e) obligations of the Borrower or any of its Subsidiaries in
connection with sales of receivables permitted by subsection (b)(iii) of
Section 8.04, to the extent such obligations constitute Funded
Indebtedness; and
(f) in addition to the Funded Indebtedness otherwise permitted by
this Section 8.01, other Funded Indebtedness hereafter incurred by the
Borrower provided that (A) the loan documentation with respect to such
Funded Indebtedness shall not contain covenants or default provisions
relating to the Borrower that are more restrictive than the covenants and
default provisions contained in the Credit Documents and (B) on the date of
incurrence of such Funded Indebtedness after giving effect on a Pro Forma
Basis to the incurrence of such Funded Indebtedness and to the concurrent
retirement of any other Funded Indebtedness of the Borrower or any of its
consolidated Subsidiaries, no Default or Event of Default would exist
hereunder.
SECTION 8.02. Liens. The Borrower will not, nor will in permit any of its
Subsidiaries to, contract for, create, incur, assume or permit to exist any Lien
with respect to any of its Property, whether now owned or after acquired, except
for Permitted Liens.
SECTION 8.03. Nature of Business. The Borrower will not, nor will it permit
any of its Subsidiaries to, engage in any business other than consumer product
businesses, coupon and promotion businesses, all seasons resort businesses,
other businesses related to the existing businesses of the Borrower and its
Subsidiaries as of the Closing Date and any other business reasonably acceptable
to the Required Lenders.
SECTION 8.04. Consolidation, Merger, Sale or Purchase of Assets, etc..
The Borrower will not, nor will it permit any of its Subsidiaries to:
(a) dissolve, liquidate or wind up its affairs, or enter into any
transaction of merger or consolidation; provided, however, that, so long as no
Default or Event of Default would be directly or indirectly caused as a result
thereof, (i) the Borrower may merge or consolidate with any of its Subsidiaries
provided that the Borrower is the surviving corporation; (ii) any Domestic
Subsidiary of the Borrower may merge or consolidate with any other Domestic
Subsidiary of the Borrower; (iii) any Domestic Subsidiary of the Borrower may
merge or consolidate with any Person that is not a Domestic Subsidiary of the
Borrower provided that (A) such Domestic Subsidiary is the surviving corporation
and (B) after giving effect to such merger or consolidation and after giving
effect on a Pro Forma Basis to such merger or consolidation, no Default or Event
of Default would exist hereunder; (iv) any Subsidiary of the Borrower that is
not a Domestic Subsidiary of the Borrower may merge or consolidate with any
other Person that is not a Domestic Subsidiary of the Borrower provided that
after giving effect to such merger or consolidation and after giving effect on a
Pro Forma Basis to such merger or consolidation, no Default or Event of Default
would exist hereunder; and (v) any wholly-owned Subsidiary of the Borrower may
dissolve, liquidate or wind up its affairs;
(b) sell, lease, transfer or otherwise dispose of any Property (including
without limitation pursuant to any sale/leaseback transaction) other than (i)
the sale of inventory in the ordinary course of business for fair consideration,
(ii) the sale or disposition of machinery and equipment no longer used or useful
in the conduct of such Person's business, (iii) the sale of receivables by the
Borrower or any of its Subsidiaries as part of any Permitted Receivables
Financings, (iv) the contribution by Ralston Resorts, Inc. of certain
undeveloped real estate located in or around Summit County, Colorado and having
a book value not to exceed $25,000,000 to a joint venture of which Ralston
Resorts, Inc. or one of its Subsidiaries is an equity owner and (v) subject to
the terms of Section 8.05, other sales or dispositions, provided that (A) after
giving effect to such sale or other disposition, the aggregate book value of
assets sold or otherwise disposed of pursuant to this clause (v) since the
Closing Date does not exceed the majority of Consolidated Total Assets as of the
most recent fiscal year end preceding the date of such sale or other disposition
with respect to which the Agent shall have received the Required Financial
Information and (B) after giving effect to such sale or other disposition and
after giving effect on a Pro Forma Basis to such sale or other disposition, no
Default or Event of Default would exist hereunder;
(c) except as otherwise permitted under Section 8.07, acquire all or any
substantial part of the capital stock or securities of any other Person or
purchase, lease or otherwise acquire (in a single transaction or a series of
related transactions) all or any substantial part of the Property of any other
Person; provided that, subject to the terms of Section 8.05, the Borrower or any
of its Subsidiaries shall be permitted to make acquisitions of the type referred
to in this Section 8.04(c) provided that (i) after giving effect to such
acquisition and after giving effect on a Pro Forma Basis to any such acquisition
(including but not limited to any Funded Indebtedness to be incurred or assumed
by the Borrower or any of its Subsidiaries in connection therewith), no Default
or Event of Default would exist hereunder and (ii) the aggregate amount of the
cash portion of purchase prices paid for all acquisitions of Foreign
Subsidiaries of the Borrower made pursuant to this Section 8.04(c) since the
Closing Date, together with the aggregate amount of Investments in Foreign
Subsidiaries of the Borrower made pursuant to Section 8.07 and clause (iv)(B) of
the definition of "Permitted Investments" set forth in Section 1.01 and the
aggregate amount of transfers to Foreign Subsidiaries of the Borrower made
pursuant to Section 8.05(c), does not exceed 5% of Consolidated Total Assets as
of the most recent fiscal year end preceding the date of such transfer with
respect to which the Agent shall have received the Required Financial
Information; or
(d) with respect to the Borrower or any Person which is a Domestic
Subsidiary of the Borrower, take any action in furtherance of causing such
Person not to be incorporated or organized under the laws of any State of the
United States or the District of Columbia.
SECTION 8.05. Transactions with Affiliates. The Borrower will not, nor will
it permit any of its Subsidiaries to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (a) advances by the Borrower
or any of its Subsidiaries of working capital to (i) any Domestic Subsidiary of
the Borrower or (ii) any other Subsidiary or any partnership or joint venture in
which the Borrower or any of its Subsidiaries is an equity owner, provided that
(A) such advances are necessary to meet the working capital needs of such
Subsidiary, partnership or joint venture and such transfer will not impair the
Borrower's operations or its ability to meet its obligations, (B) to the extent
made with proceeds of any Loans hereunder, such advances shall not be applied to
any Long Term Debt of such Subsidiary, partnership or joint venture and (C) the
aggregate amount of such advances at any time outstanding for all Subsidiaries,
partnerships and joint ventures shall not exceed $25,000,000, (b) transfers of
cash and assets to any Domestic Subsidiary of the Borrower, (c) transfers of
cash and assets to any Foreign Subsidiary of the Borrower, provided that after
giving effect to any such transfer the aggregate amount of cash and assets
(valued at book value) transferred pursuant to this clause (c) since the Closing
Date, together with the aggregate amount of Investments in Foreign Subsidiaries
of the Borrower made pursuant to Section 8.07 and clause (iv)(B) of the
definition of "Permitted Investments" set forth in Section 1.01 and the
aggregate amount of the cash portion of purchase prices paid for acquisitions of
Foreign Subsidiaries of the Borrower made pursuant to Section 8.04(c), does not
exceed 5% of Consolidated Total Assets as of the most recent fiscal year end
preceding the date of such transfer with respect to which the Agent shall have
received the Required Financial Information, (d) transactions permitted by
Section 8.07, (e) normal compensation and reimbursement of expenses of officers
and directors and (f) except as otherwise specifically limited in this
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length
transactions with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
SECTION 8.06. Dividends. (i) The Borrower will not declare or pay any
Dividends (other than Dividends payable solely in the same class of capital
stock of the Borrower) if at the time thereof a Default or Event of Default has
occurred and is continuing or a Default or Event of Default would be directly or
indirectly caused as a result of the declaration or payment of such Dividend.
(ii) The Borrower will not permit any of its Subsidiaries to declare or pay
any Dividends (other than Dividends payable solely in the same class of capital
stock of such Person), except that any Subsidiary of the Borrower may declare or
pay Dividends with respect to any shares of its capital stock held by the
Borrower or any of its Subsidiaries.
SECTION 8.07. Advances, Investments, Loans, etc.. The Borrower will not,
nor will it permit any of its Subsidiaries to, make Investments in or to any
Person, except for Permitted Investments.
SECTION 8.08. No Dividend Restrictions. The Borrower will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to: (a) pay
dividends or make any other distribution on any of such Person's capital stock,
(b) subject to subordination provisions, pay any indebtedness owed to the
Borrower or any of its Subsidiaries, (c) make loans or advances to the Borrower
or any of its Subsidiaries or (d) transfer any of its Property to the Borrower
or any of its Subsidiaries.
SECTION 8.09. Fiscal Year. Without giving prior written notice thereof
to the Agent, the Borrower will not change, or permit a change, in the fiscal
year for it and its Subsidiaries on a consolidated basis.
ARTICLE IX. EVENTS OF DEFAULT
SECTION 9.01. Events of Default. Each of the following shall be an event
of default (each an "Event of Default") hereunder:
(a) Payment. The Borrower shall
(i) default in the payment when due of any principal of
any of the Loans, or
(ii) default, and such default shall continue for five (5) or
more days, in the payment when due of any interest on the Loans, or of any
Fees or other amounts owing hereunder, under any of the other Credit
Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by the Borrower herein, in any of the other Credit Documents,
or in any written statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material respect on the
date as of which it was made or deemed to have been made or delivered; or
(c) Covenants. The Borrower shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Section 7.02, 7.10 or 7.11 or Sections
8.01 through Section 8.09, inclusive and such default shall continue
unremedied for a period of at least ten (10) days after the earlier of an
officer of the Borrower becoming aware of such default or notice thereof by
the Agent, or
(ii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsection (a), (b)
or (c)(i) of this Section 9.01) contained in this Agreement and such
default shall continue unremedied for a period of at least thirty (30) days
after the earlier of an officer of the Borrower becoming aware of such
default or notice thereof by the Agent; or
(d) Bankruptcy Event. Any Bankruptcy Event shall occur with respect to
the Borrower or any of its Subsidiaries; or
(e) Defaults Under Other Agreements; Judgments; ERISA. If at any time,
(i) the aggregate amount of
(A) Funded Indebtedness of the Borrower or any of its
Subsidiaries (other than Funded Indebtedness outstanding under this
Agreement and the other Credit Documents), (1) with respect to which there
has occurred (I) a default in any payment (beyond the applicable grace
period with respect thereto, if any) or (II) a default in the observance or
performance relating to such Funded Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event or condition, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such Funded
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Funded Indebtedness to become due prior to its stated
maturity; or (2) which shall have been declared due and payable, or
required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof;
plus
(B) the amount of liability with respect to any judgments or
decrees which shall have been entered against the Borrower or any of its
Subsidiaries and not paid or fully covered by insurance provided by a
carrier who has acknowledged coverage or not vacated, paid, discharged or
stayed or bonded pending appeal within forty-five (45) days from the entry
thereof;
plus
(C) (1) the aggregate amount which the Borrower or any member of
the Controlled Group shall have failed to pay when due under Title IV of
ERISA, (2) the unfunded liabilities under any Plans with respect to which a
notice of intent to terminate has been filed by the Borrower or any member
of the Controlled Group, any Plan administrator or any combination of the
foregoing, (3) the unfunded liabilities of any Plans with respect to which
(I) the PBGC shall have instituted proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007
of ERISA) in respect of or to cause a trustee to be appointed to administer
or (II) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that such Plans must be
terminated, and (4) the current payment obligations which likely have been
incurred by one or more members of the Controlled Group as a result of a
complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer
Plans,
shall exceed (ii) $50,000,000; or
(f) Ownership. There shall occur a Change of Control.
SECTION 9.02. Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived by the Lenders or cured to the satisfaction of the Lenders (pursuant
to the voting procedures in Section 11.08), the Agent, upon the request of the
Required Lenders, shall, by written notice to the Borrower, take any of the
following actions without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for herein:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately
terminated.
(ii) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, all accrued and unpaid Fees
and other indebtedness or obligations of any and every kind owing by
the Borrower to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Borrower.
(iii) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.01(d) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations of any and every kind owing by the Borrower to
any of the Lenders hereunder automatically shall immediately become due and
payable without the giving of any notice or other action by the Agent.
ARTICLE X. AGENT
SECTION 10.01. Appointment and Authorization. Each Lender hereby
irrevocably appoints and authorizes the Agent to take such action on its behalf
and to exercise such powers under this Agreement and the other Credit Documents
as are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto.
SECTION 10.02. General Immunity. In performing its duties to the Lenders as
Agent hereunder, the Agent will take the same care as it takes in connection
with credit transactions in which it alone is interested. However, neither the
Agent nor any of its directors, officers, agents or employees shall be liable to
the Lenders for any action taken or omitted to be taken by it or them hereunder
or in connection herewith except for its own or their own gross negligence or
willful misconduct.
SECTION 10.03. Consultation with Professionals. The Agent may consult with
legal counsel and other professionals selected by it and shall not be liable to
the Lenders for any action taken or suffered in good faith by it in accordance
with the advice of such counsel and professionals in their respective areas of
expertise.
SECTION 10.04. Documents. The Agent shall not be under any duty to examine
or pass upon the effectiveness, genuineness or validity of this Agreement or any
of the other Credit Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, and the Agent shall be entitled to
assume that the same are valid, effective and genuine and what they purport to
be.
SECTION 10.05. Rights as a Lender. With respect to its Commitment, the
Agent shall have the same rights and powers hereunder as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall, as applicable and unless the context 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 or trust
business with the Borrower or any of its Subsidiaries as if it were not the
Agent.
SECTION 10.06. Responsibility of Agent. It is expressly understood and
agreed that the obligations of the Agent hereunder to the Lenders are only those
expressly set forth in this Agreement and the other Credit Documents and that
the Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing unless the Agent has actual knowledge of such fact or
has received notice from a Lender or the Borrower that such Lender or the
Borrower considers that a Default or an Event of Default has occurred and is
continuing and specifying the nature thereof.
SECTION 10.07. Action by Agent. So long as the Agent shall be entitled,
pursuant to Section 10.06, to assume that no Default or Event of Default has
occurred and is continuing, the Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights that may be
vested in it by, or with respect to taking or refraining from taking any action
or actions that it may be able to take under or in respect of, this Agreement or
any of the other Credit Documents. The Agent shall incur no liability to the
Lenders under or in respect of this Agreement or any of the other Credit
Documents by acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by
the proper party or parties, or with respect to anything that it may do or
refrain from doing in the reasonable exercise of its judgment, or that may seem
to it to be necessary or desirable under the circumstances.
Without limiting the generality of the foregoing provisions of this Section
10.07, the Agent shall be conclusively entitled to assume that the conditions
precedent set forth in Section 5.02 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not been
satisfied.
SECTION 10.08. Notices of Event of Default, Etc.. In the event that the
Agent shall have acquired actual knowledge of any Default or Event of Default,
the Agent shall promptly give notice thereof to the Lenders, and the Agent may
take such action and assert such rights with respect to taking or refraining
from taking any action or actions that it may be able to take under or in
respect of, this Agreement or any of the other Credit Documents, as it deems to
be advisable in its discretion for the protection of the interests of the
Lenders, including, without limitation, the exercise of rights and remedies
under Article IX and under any of the other Credit Documents; provided that, as
between the Agent and the Lenders only, after the occurrence of an Event of
Default, the Agent (i) shall not exercise any rights or remedies granted to it
hereunder, under any other of the Credit Documents, or otherwise available to it
at law or in equity, without the approval of the Required Lenders (or all of the
Lenders, if otherwise required by this Agreement) and (ii) upon the direction of
the Required Lenders (or all of the Lenders, if otherwise required by this
Agreement), shall exercise such rights and remedies as so directed; provided
further that, notwithstanding the above, the Agent shall not be required to take
any action which would expose the Agent to personal liability or which is
contrary to law unless it shall be indemnified to its satisfaction against any
and all amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of taking
or continuing to take any such action.
SECTION 10.09. Indemnification of Agent. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to their
respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or any of the other Credit Documents or any action taken
or omitted by the Agent under this Agreement or any of the other Credit
Documents; provided that, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation to the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any of the other Credit Documents, to the extent not reimbursed by the
Borrower.
SECTION 10.10. No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent or any of its directors, employees, agents,
attorneys-in-fact or affiliates hereafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to such Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigations into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make Loans
hereunder and to enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Credit Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. The Agent agrees that (i) it shall promptly
deliver to each Lender copies of all notices, reports and other documents
expressly required to be furnished to the Agent by the Borrower pursuant to any
of the Credit Documents and (ii) upon the reasonable request of any Lender, it
shall promptly deliver to such Lender such other information as the Agent shall
receive regarding the Borrower or the performance of the obligations of the
Borrower under the Credit Documents; otherwise, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 10.11. Resignation. Subject to the appointment and acceptance of a
successor as provided below, the acting Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor acceptable to the Borrower,
which successor shall be a Lender that is a bank having a combined capital and
surplus of at least $500,000,000 or an affiliate of any such bank. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor satisfying the requirements set forth above. Upon the
acceptance of any appointment hereunder by a successor Lender, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After the Agent's resignation hereunder,
the provisions of this Article and Section 11.07 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
ARTICLE XI. MISCELLANEOUS
SECTION 11.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telex, telecopy, graphic scanning or other
telegraphic communications equipment of the sending party, as follows:
(a) if to the Borrower, to it at 800 Market Street, 29th Floor, St. Louis,
Missouri 63101 Attention of T.C. Oviatt, Treasurer (Facsimile No. 314-877-7729);
(b) if to the Agent, to it at 233 S. Wacker Drive, Sears Tower, Suite
2800, Chicago, Illinois 60606-6308, Attention of Louise Comiskey (Facsimile No.
312-372-9194);
With a copy to: NationsBank, N.A.
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-02
Charlotte, North Carolina 28255
Attention of Molly Canup
(Facsimile No. 704-386-9923)
(c) if to a Lender, to it at its address (or telecopy number) set forth in
Schedule 1 or in the assignment agreement pursuant to which such Lender became a
party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telex, telecopy, graphic scanning or other telegraphic communications equipment
of the sender, or on the date five (5) Business Days after dispatch by certified
or registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 11.01 or at such other
address or telex, telecopy or other number as shall be designated by such party
in a notice to each other party complying with the terms of this Section 11.01.
SECTION 11.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making of Loans by the Lenders hereunder
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as any Loans or any amounts are
outstanding under this Agreement or any of the other Credit Documents and so
long as the Commitments have not been terminated.
SECTION 11.03. Binding Effect; Termination of Existing Credit Agreement.
This Agreement shall become effective when it shall have been executed by the
Borrower and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Agreement shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and their respective
successors and assigns. The Borrower hereby agrees that, at such time as this
Agreement shall have become effective pursuant to the terms of the immediately
preceding sentence, the Existing Credit Agreement and the Commitments thereunder
and as defined therein automatically shall be terminated.
SECTION 11.04. Benefit of Agreement. (a) Generally. 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 that, the Borrower may
not assign or transfer any of its interests without prior written consent of the
Lenders; provided further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be limited
as set forth in this Section 11.04, provided, however, that nothing herein shall
prevent or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or participations in such
Lender's Loans and/or Commitments hereunder to its parent company and/or to any
affiliate of such Lender which is at least 50% owned by such Lender or its
parent company. To the extent required in connection with a pledge of Loans by
any Lender to a Federal Reserve Bank, the Borrower agrees that, upon request of
any such Lender, it will promptly provide such Lender a promissory note
evidencing the repayment obligations of the Borrower with respect to the
principal of and interest on the Loans of such Lender arising under Section
2.01, 2.02 and/or 2.03, as applicable, such promissory note to be in a form
reasonably satisfactory to the Borrower and the applicable Lender.
(b) Assignments by Lenders. Each Lender may assign all or a
portion of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Schedule 14 to one or more Eligible
Assignees, provided that any such assignment shall be in a minimum aggregate
amount of $10,000,000 of the Commitments and in integral multiples of $1,000,000
above such amount, and that each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement. Any assignment hereunder shall be effective upon delivery
to the Agent of written notice of the assignment together with a transfer fee of
$5,000 payable to the Agent for its own account; provided that no such transfer
fee shall be payable in connection with an assignment by any Lender to an
Affiliate or Subsidiary of such Lender. The assigning Lender will give prompt
notice to the Agent and the Borrower of any such assignment. Upon the
effectiveness of any such assignment (and after notice to the Borrower as
provided herein), the assignee shall become a "Lender" for all purposes of this
Agreement and the other Credit Documents and, to the extent of such assignment,
the assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. By executing and
delivering an assignment agreement in accordance with this Section 11.04(b), the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim; (ii)
except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any of the
other Credit Documents or any other instrument or document furnished pursuant
hereto or thereto or the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under this Agreement,
any of the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Agreement, the other
Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without reliance
upon the Agent, such assigning Lender or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Credit Documents; (vi) such assignee appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement or any other Credit Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement and the other Credit Documents are required to be performed by it
as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and obligations
hereunder; provided that (i) such selling Lender shall remain a "Lender" for all
purposes under this Agreement and the other Credit Documents (such selling
Lender's obligations under this Agreement remaining unchanged) and the
participant shall not constitute a Lender hereunder, (ii) no such participant
shall have, or be granted, rights to approve any amendment or waiver relating to
this Agreement or any of the other Credit Documents except with respect to any
such amendment or waiver which would, under the terms of Section 11.08, require
the consent of all of the Lenders, (iii) sub-participations by the participant
(except to an affiliate, parent company or affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in integral
multiples of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under this Agreement or
under any of the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant shall
be entitled to receive additional amounts under Sections 3.05 and 3.07 on the
same basis as if it were a Lender.
(d) Disclosure of Confidential Information. (i) Any Lender may, in
connection with any assignment pursuant to paragraph (b) above, disclose to the
assignee or the proposed assignee any information relating to the Borrower or
any Subsidiary of the Borrower furnished to such Lender by or on behalf of the
Borrower or any Subsidiary of the Borrower in connection with this Agreement,
provided that, prior to any such disclosure each such assignee or proposed
assignee shall execute an agreement containing substantially the terms of all
then existing confidentiality agreements entered into by the assigning Lender
with respect to the Borrower and its Subsidiaries, in each case whereby such
assignee or proposed assignee shall agree to preserve the confidentiality of any
non-public, confidential or proprietary information relating to the Borrower or
any Subsidiary of the Borrower.
(ii) The Lenders may not, in connection with any participation pursuant to
paragraph (c) above, disclose to the participant or the proposed participant any
non-public, confidential or proprietary information relating to the Borrower or
any Subsidiary of the Borrower furnished to such Lender by or on behalf of the
Borrower or any Subsidiary of the Borrower.
SECTION 11.05. Right of Set-Off. 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 Lender is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights 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 Lender
(including, without limitation, branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of the Borrower against
obligations and liabilities of the Borrower to such Lender hereunder or under
any of the other Credit Documents or otherwise, irrespective of whether such
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. The Borrower hereby agrees that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 4.03 or Section 11.04(c) may exercise all rights of set-off with respect
to its participation interest as fully as if such Person were a Lender
hereunder.
SECTION 11.06. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower and the Agent or any Lender 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 and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
SECTION 11.07. Payment of Expenses, etc.. The Borrower agrees to: (i) pay
all reasonable out-of-pocket costs and expenses (A) of the Agent in connection
with the negotiation, preparation, execution and delivery and administration of
this Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Moore & Van Allen, PLLC, special counsel to the Agent) and any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Borrower under this Agreement and (B) of the Agent and the Lenders in connection
with enforcement of the Credit Documents and the documents and instruments
referred to therein and/or collection of the obligations of the Borrower
pursuant to the Credit Documents (including, without limitation, in connection
with any such enforcement or collection, the reasonable fees and disbursements
of counsel for the Agent and each of the Lenders); (ii) pay and hold each of the
Lenders harmless from and against any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save each of the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or reasonable
out-of-pocket expenses incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not any Lender is a party thereto) related to the
entering into and/or performance of any Credit Document, to the use of proceeds
of any Loans hereunder, to the consummation of any other transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).
SECTION 11.08. Amendments, Waivers and Consents. Neither this Agreement nor
any other Credit Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by the Required Lenders, provided
that no such amendment, change, waiver, discharge or termination shall, without
the consent of each Lender, (i) extend the scheduled maturities (including the
final maturity) of any Loan, or any portion thereof, or reduce the rate or
extend the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon or fees
hereunder or reduce the principal amount thereof, or increase the Commitment of
any Lender over the amount thereof in effect (it being understood and agreed
that a waiver of any Default or Event of Default shall not constitute a change
in the terms of any Commitment of any Lender), (ii) amend, modify or waive any
provision of this Section or Section 3.05, 3.07, 4.02, 4.03, 9.01(a), 11.04,
11.05, 11.07 or 11.11, (iii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders or (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Credit Documents. No provision of Article X may be
amended without the consent of the Agent.
SECTION 11.09. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument.
It shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
SECTION 11.10. Table of Contents; Headings. The table of contents hereto
and the headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
SECTION 11.11. Survival of Indemnification. All indemnities set forth
herein, including, without limitation, in Section 3.05, 3.07, 4.04, 10.09 or
11.07 shall survive the execution and delivery of this Agreement, and the making
of the Loans, the repayment of the Loans and other obligations and the
termination of the Commitments hereunder.
SECTION 11.12. Governing Law; Submission to Jurisdiction;
Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA. The Borrower hereby submits to the non-exclusive
jurisdiction of the United States District Court for the Western District of
North Carolina or the courts of the State of North Carolina in Mecklenburg
County for the purposes of any legal action or proceeding with respect to this
Agreement or any of the other Credit Documents. The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that such proceeding has been brought in an inconvenient
form. The Borrower hereby consents to process being served in any such
proceeding by the mailing of a copy thereof by registered or certified air mail,
postage prepaid, return receipt requested, to the address specified for notices
to the Borrower pursuant to Section 11.01 or in any other matter permitted by
law. Nothing herein shall affect the right of the Agent to serve process in any
other manner permitted by law or to commence legal proceedings or to otherwise
proceed against the Borrower in any other jurisdiction.
(b) EACH OF THE AGENT, THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 11.13. Severability. If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
SECTION 11.14. Entirety. This Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence, relating to this Agreement or any of the other Credit
Documents or the transactions contemplated herein and therein.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
RALCORP HOLDINGS, INC.
By______________________________
Title___________________________
NATIONSBANK, N.A., individually
in its capacity as a Lender and
Title___________________________
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<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
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<ALLOWANCES> 2
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<CURRENT-ASSETS> 208
<PP&E> 697
<DEPRECIATION> 269
<TOTAL-ASSETS> 724
<CURRENT-LIABILITIES> 99
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0
0
<COMMON> 0
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<TOTAL-LIABILITY-AND-EQUITY> 724
<SALES> 573
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