UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 8, 2016
Lamb Weston Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-37830 | 61-1797411 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
||
599 S. Rivershore Lane Eagle, Idaho |
83616 | |||
(Address of principal executive offices) | (Zip Code) |
(208) 938-1047
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
Separation and Distribution Agreement and Certain Other Separation-Related Agreements
On November 9, 2016, Conagra Brands, Inc. (formerly known as ConAgra Foods, Inc., Conagra ) completed the previously announced spinoff of Lamb Weston Holdings, Inc. (the Company ) through a distribution of 100% of Conagras interest in the Company to holders of shares of Conagras common stock (the Spinoff ) as of 5:00 p.m., New York City time, on November 1, 2016 (the Record Date ). On November 8, 2016, in connection with the Spinoff, the Company entered into several agreements with Conagra that govern the relationship of the parties following the Spinoff, including the following:
| Separation and Distribution Agreement; |
| Tax Matters Agreement; |
| Employee Matters Agreement; |
| Transition Services Agreement; and |
| Trademark License Agreement. |
Summaries of certain terms of these agreements can be found in the section entitled Relationship with ConAgra After the Spinoff in the Companys Information Statement, filed as Exhibit 99.1 to the Companys Registration Statement on Form 10 (File No. 001-37830) (as amended, the Registration Statement ) with the Securities and Exchange Commission, and are incorporated herein by reference. Such summaries are qualified in their entirety by reference to the full text of the Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement and Trademark License Agreement, copies of which are filed as Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Senior Credit Facility
On November 9, 2016, the Company entered into a Credit Agreement (the Credit Agreement ) among the Company, certain subsidiaries of the Company from time to time party thereto as guarantors, the institutions from time to time party thereto as Lenders (the Lenders ) and Bank of America, N.A., as Administrative Agent for the Lenders (in such capacity, the Agent ), providing for a $500.0 million multi-year multicurrency revolving credit facility, a $675.0 million term loan facility and, under certain circumstances, the ability to add incremental facilities in an aggregate amount of up to $600.0 million (collectively, the Credit Facility ). The proceeds of the term loan under the Credit Facility were used to consummate the Spinoff, and the proceeds of revolving loans under the Credit Facility will be available for working capital and for general corporate purposes. Each of the revolving credit and term loan facilities has a current maturity date of November 9, 2021.
Borrowings under the Credit Facility bear interest at LIBOR or the Base Rate (each as defined in the Credit Agreement) plus an applicable margin ranging from 1.50% to 2.25% for LIBOR-based loans and from 0.50% to 1.25% for Base Rate-based loans, depending upon the Companys total net leverage ratio.
The Credit Facility requires amortization repayments of the term loan facility, commencing on the last business day of March 2017, in equal quarterly installments in aggregate annual amounts equal to 5% of the original principal amount of such term loans, with the remaining principal balance payable on the maturity date (in each case, subject to adjustment for prepayments). There are no scheduled amortization of borrowings under the revolving credit facility, with the full outstanding balance payable on the maturity date.
The Credit Facility contains customary affirmative and negative covenants for agreements of this type. The Credit Facility also contains customary financial covenants including (a) a maximum total net leverage ratio initially set at 5.50 to 1.00 and stepping down to 5.25 to 1.00 after May 28, 2017, 5.00 to 1.00 after February 25, 2018, 4.75 to 1.00 after November 25, 2018 and 4.50 to 1.00 after August 25, 2019, and (b) a minimum interest expense coverage of 2.75 to 1.00.
- 2 -
The Credit Facility provides for customary events of default, including: nonpayment of principal, interest or fees; cross-defaults to other material debt; material inaccuracies of representations and warranties; failure to perform negative covenants; failure to perform other terms and conditions; events of bankruptcy and insolvency; material unsatisfied judgments; and change of control. Upon the occurrence of an event of default, the Agent may, and at the request of lenders holding more than 50% in principal amount of lender commitments and outstanding loans under the Credit Facility will, cause the maturity of the loans to be accelerated.
The Companys obligations under the Credit Facility are unconditionally guaranteed by each of its existing and subsequently acquired or organized wholly-owned domestic restricted subsidiaries, excluding immaterial subsidiaries (with materiality determined on an individual and aggregate basis) and other subsidiaries as set forth in the Credit Agreement. The current guarantors are ConAgra Foods Lamb Weston, Inc., Lamb Weston Sales, Inc. and Lamb-Weston/Midwest, Inc. The Credit Facility is secured by security interests and liens on substantially all of the assets of the Company and each guarantor. Notwithstanding the foregoing, subject to certain conditions set forth in the Credit Agreement, if the Companys non-credit enhanced debt securities have an investment grade rating, the liens securing the Credit Facility may be released at the Companys option (but will be required to be reinstated if the Companys non-credit enhanced senior secured debt securities no longer have an investment grade rating).
4.625% Senior Notes Due 2024 and 4.875% Senior Notes Due 2026
On November 9, 2016, the Company issued (i) $833.0 million aggregate principal amount of 4.625% senior notes due 2024 (the 2024 Notes ) pursuant to an indenture, dated as of November 9, 2016 (the 2024 Notes Indenture ), among the Company, as issuer, certain subsidiaries of the Company named therein as guarantors and Wells Fargo Bank, National Association, as trustee, and (ii) $833.0 million aggregate principal amount of 4.875% senior notes due 2026 (the 2026 Notes and, collectively with the 2024 Notes, the Notes ) pursuant to an indenture, dated as of November 9, 2016 (the 2026 Notes Indenture and, together with the 2024 Notes Indenture, the Indentures ), among the Company, as issuer, certain subsidiaries of the Company named therein as guarantors and Wells Fargo Bank, National Association, as trustee.
The Companys obligations under the Notes are unconditionally guaranteed on a senior unsecured basis by each of its subsidiaries that guarantee the Companys obligations under the Credit Facility.
The 2024 Notes bear interest at a rate of 4.625% per year, and the 2026 Notes bear interest at a rate of 4.875% per year. Interest payments on the Notes are due semi-annually each May 1 and November 1, with the first interest payment due on May 1, 2017. The 2024 Notes will mature on November 1, 2024, and the 2026 Notes will mature on November 1, 2026, unless earlier redeemed or repurchased, and are subject to the terms and conditions set forth in the applicable Indenture.
The Company may redeem some or all of the Notes at the redemption prices and on the terms specified in the applicable Indenture. If the Company experiences specific kinds of changes in control or the Company or any of its restricted subsidiaries sells certain of its assets, then the Company must offer to repurchase the Notes on the terms set forth in the applicable Indenture.
The Notes are subordinated to all of the Companys existing and future secured debt, rank equally with all of its existing and future senior debt and rank senior to all of its existing and future subordinated debt. The guarantees of the Notes are subordinated to all of the guarantors existing and future secured debt, rank equally with all of their existing and future senior debt and rank senior to all of their existing and future subordinated debt. The Notes are structurally subordinated to all of the liabilities of the Companys non-guarantor subsidiaries.
The Indentures limit the Companys ability and the ability of its restricted subsidiaries to, among other things: incur, assume or guarantee additional indebtedness; pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt; make loans and investments; incur or suffer to exist liens; sell, transfer or otherwise dispose of assets; enter into agreements that restrict distributions or other payments from restricted subsidiaries to the Company; engage in transactions with affiliates; designate subsidiaries as unrestricted or restricted; and consolidate, merge, amalgamate or transfer all or substantially all of the Companys assets. If in the
- 3 -
future the Notes have an investment grade credit rating by both Moodys Investors Services, Inc. and Standard & Poors Ratings Services, and no default or event of default has occurred and is continuing under the applicable Indenture, certain of these covenants will, thereafter, no longer apply to the Notes for so long as the Notes are rated investment grade by the two rating agencies.
The Indentures contain customary events of default that include, among other things (subject in certain cases to customary grace and cure periods): non-payment of principal or interest; breach of certain covenants contained therein; defaults in failure to pay certain other indebtedness or the acceleration of certain other indebtedness prior to maturity; the failure to pay certain final judgments; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs (subject to certain exceptions), the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes of the applicable series may declare all the Notes of such series to be due and payable immediately.
General
Copies of the Credit Agreement, the 2024 Notes Indenture and the 2026 Notes Indenture are filed as Exhibits 10.5, 4.1 and 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The descriptions above are summaries of such documents, do not purport to be complete, and are qualified in their entirety by the complete texts of each such agreement.
Certain of the Agents, Lenders and initial purchasers of the Notes and their affiliates perform various financial advisory, investment banking and commercial banking services from time to time for the Company and its affiliates for which they have received customary fees and compensation for these transactions and may in the future receive customary fees and compensation. Certain of the initial purchasers or their affiliates are Agents and Lenders under the Credit Agreement.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information regarding the Credit Facility and the Indentures set forth in Item 1.01 is incorporated by reference into this Item 2.03.
Item 3.02 | Unregistered Sales of Equity Securities. |
On November 9, 2016, the Company issued approximately 146.0 million shares of the Companys common stock to Conagra in connection with the Spinoff, and Conagra caused its distribution agent to distribute such shares of the Companys common stock to Conagras shareholders who held Conagra shares, other than in respect of treasury shares held by Conagra, as of the Record Date. The information regarding the Spinoff in Item 1.01 is incorporated by reference into this Item 3.02. To the extent applicable, the issuance of shares by the Company to Conagra pursuant to the Spinoff was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
The Board of Directors of the Company (the Board ) has appointed each of Charles A. Blixt, Thomas P. Maurer and Maria Renna Sharpe as directors of the Company effective November 8, 2016 (the Effective Date ), each to serve until their respective successor is elected and qualified or until their respective earlier resignation or removal. Upon joining the Board, Mr. Blixt and Ms. Sharpe will each serve as members of the Compensation Committee and the Nominating and Corporate Governance Committee, with Mr. Blixt acting as Chair of the Nominating and Corporate Governance Committee. Mr. Maurer will serve on the Audit Committee.
As non-employee directors, Ms. Sharpe and Messrs. Blixt and Maurer will each receive compensation in the same manner as the Companys other non-employee directors. Beginning in the Companys 2017 fiscal year, each non-employee director will receive (i) a cash retainer in the amount of $90,000 per year, plus (ii) an equity retainer in the amount of $130,000 per year, plus (iii) a cash amount of $20,000, $15,000 or $15,000 per year if such member serves as a Chairperson of the Audit, Compensation or Nominating and Corporate Governance Committee, respectively, plus (iv) a cash amount of $20,000 per year if such member serves as the Lead Director, such amounts to be payable from time to time as may be determined by the Board or pursuant to the terms of any deferred compensation plan for directors that may be adopted.
- 4 -
The Board has determined that, as of the Effective Date, each of Ms. Sharpe and Messrs. Blixt and Maurer satisfies the definition of independent director under the listing standards of the New York Stock Exchange and the categorical independence standards contained in the Companys Corporate Governance Principles.
Effective as of November 8, 2016, the Board approved the following compensation arrangements for Timothy R. McLevish, Executive Chairman, and Thomas P. Werner, President and Chief Executive Officer.
Mr. McLevishs initial base salary will be $200,000. In addition, Mr. McLevish will be entitled to participate in the Companys executive long-term incentive program, beginning in the Companys 2017 fiscal year, subject to the terms and conditions established by the Compensation Committee. His participation in the program will provide an annual targeted opportunity equal to $2,600,000, vesting over three years. Mr. McLevish will also be eligible to participate in the Companys health and welfare and retirement programs generally applicable to employees of the Company.
Mr. Werners initial base salary will be $725,000. He will also be eligible to participate in the Companys annual and long-term incentive programs. He will initially participate in the annual incentive program with an annual target opportunity of 100% of his annual base salary, subject to achievement of the applicable performance conditions established by the Compensation Committee. In addition, Mr. Werner will be entitled to participate in the Companys executive long-term incentive program, beginning in the Companys 2017 fiscal year, subject to the terms and conditions established by the Compensation Committee. His participation in the program will provide an annual targeted opportunity equal to $2,550,000, vesting over three years. Mr. Werner will also be eligible to participate in the Companys health and welfare and retirement programs generally applicable to employees of the Company.
Effective as of November 8, 2016, the Company also appointed Bernadette Madarieta, age 41, as Vice President and Controller of the Company. In her new role, Ms. Madarieta will act as the Companys principal accounting officer. Prior to joining the Company, Ms. Madarieta served as Vice President and Controller of Packaging Corporation of America (a containerboard and corrugated packaging manufacturer) since October 2013. Previously, Ms. Madarieta was Vice President and Controller at Boise Inc. (a packaging and paper products manufacturer) from February 2011 to October 2013.
Ms. Madarietas initial base salary will be $335,000. She will also be eligible to participate in the Companys annual and long-term incentive programs. She will initially participate in the annual incentive program with a target opportunity of 50% of her annual base salary, prorated for fiscal 2017 based on her days of employment, subject to achievement of the applicable performance conditions established by the Compensation Committee. In addition, Ms. Madarieta will be entitled to participate in the Companys executive long-term incentive program, subject to the terms and conditions established by the Compensation Committee. Her participation in the program will provide an annual targeted opportunity equal to $200,000.
Ms. Madarieta will also receive a sign-on grant of restricted stock units with a grant date value equal to $200,000 that will vest on the third anniversary of the grant date, subject to the terms of the Companys 2016 Stock Plan.
In addition, Ms. Madarieta will receive a sign-on cash payment of $75,000 (less required withholdings). Ms. Madarieta will also be eligible to participate in the Companys health and welfare and retirement programs generally applicable to employees of the Company.
Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On November 7, 2016, the Company filed its Amended and Restated Certificate of Incorporation (the Certificate of Incorporation ) with the Secretary of State of the State of Delaware, which became effective on November 8, 2016. The form of the Certificate of Incorporation was previously filed as Exhibit 3.1 to the Registration Statement. Among other things, the Certificate of Incorporation increased the Companys authorized capital stock to 660,000,000 shares, comprised of 600,000,000 shares of common stock, par value $1.00 per share, and 60,000,000 shares of preferred stock, par value $1.00 per share. In addition, the Companys Amended and Restated Bylaws (the Bylaws ) became effective on November 8, 2016. The form of the Bylaws was previously filed as Exhibit 3.2 to the Registration Statement.
Summaries of certain provisions of the Certificate of Incorporation and Bylaws are contained in the Description of Capital Stock section of the Information Statement filed as Exhibit 99.1 to the Registration Statement and are incorporated herein by reference. Such summaries are qualified in their entirety by reference to the full text of the Certificate of Incorporation and Bylaws, copies of which are filed as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
- 5 -
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit
|
Description |
|
2.1* | Separation and Distribution Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
3.1 | Amended and Restated Certificate of Incorporation of Lamb Weston Holdings, Inc. | |
3.2 | Amended and Restated Bylaws of Lamb Weston Holdings, Inc. | |
4.1 | 2024 Notes Indenture, dated as of November 9, 2016, by and among the Company, the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (including form of note relating to the 2024 Notes). | |
4.2 | 2026 Notes Indenture, dated as of November 9, 2016, by and among the Company, the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (including form of note relating to the 2026 Notes). | |
10.1 | Tax Matters Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.2 | Employee Matters Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.3 | Transition Services Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.4 | Trademark License Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.5 | Credit Agreement, dated as of November 9, 2016, by and among the Company, the guarantors party thereto, the lenders named therein, and Bank of America, N.A., as Administrative Agent. |
* | Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request. |
- 6 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LAMB WESTON HOLDINGS, INC. | ||||
By: |
/s/ Eryk J. Spytek |
|||
Name: | Eryk J. Spytek | |||
Title: | Senior Vice President, General Counsel and Corporate Secretary |
Date: November 10, 2016
- 7 -
EXHIBIT INDEX
Exhibit
|
Description |
|
2.1* | Separation and Distribution Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
3.1 | Amended and Restated Certificate of Incorporation of Lamb Weston Holdings, Inc. | |
3.2 | Amended and Restated Bylaws of Lamb Weston Holdings, Inc. | |
4.1 | 2024 Notes Indenture, dated as of November 9, 2016, by and among the Company, the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (including form of note relating to the 2024 Notes). | |
4.2 | 2026 Notes Indenture, dated as of November 9, 2016, by and among the Company, the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (including form of note relating to the 2026 Notes). | |
10.1 | Tax Matters Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.2 | Employee Matters Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.3 | Transition Services Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.4 | Trademark License Agreement, dated as of November 8, 2016, by and between ConAgra Foods, Inc. and the Company. | |
10.5 | Credit Agreement, dated as of November 9, 2016, by and among the Company, the guarantors party thereto, the lenders named therein, and Bank of America, N.A., as Administrative Agent. |
* | Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request. |
- 8 -
Exhibit 2.1
SEPARATION AND DISTRIBUTION AGREEMENT
between
CONAGRA FOODS, INC.
and
LAMB WESTON HOLDINGS, INC.
dated
November 8, 2016
TABLE OF CONTENTS
-i-
-ii-
SEPARATION AND DISTRIBUTION AGREEMENT
This Separation and Distribution Agreement (this Agreement ), dated November 8, 2016, is between ConAgra Foods, Inc., a Delaware corporation ( ConAgra ) and Lamb Weston Holdings, Inc., a Delaware corporation and wholly owned Subsidiary of ConAgra ( SpinCo or Lamb Weston ). Each of ConAgra and SpinCo is sometimes referred to individually as a Party and collectively they are sometimes referred to as the Parties .
RECITALS
1. ConAgra is engaged, directly and indirectly through certain of its Subsidiaries, in the LW Business.
2. The Board of Directors of ConAgra (the ConAgra Board ) has determined that it would be appropriate and in the best interests of ConAgra and its stockholders for ConAgra to separate its businesses into two publicly-traded companies: (i) ConAgra, which will be renamed Conagra Brands, Inc. and will continue to conduct, directly and through members of the ConAgra Group, the Retained Business, and (ii) Lamb Weston, which will continue to conduct, directly and through members of the LW Group, the LW Business (the Separation ).
3. ConAgra has formed SpinCo in order to facilitate such Separation and the Distribution.
4. ConAgra currently owns all of the issued and outstanding shares of common stock, par value $1.00 per share, of SpinCo (collectively with shares of common stock of SpinCo issued to ConAgra pursuant to the LW Transfer, the SpinCo Common Stock ).
5. To effect the Separation and the Distribution, (i) ConAgra or other members of the ConAgra Group have contributed or will contribute their interests in the LW Assets to a member of the LW Group, (ii) SpinCo or another member of the LW Group has assumed or will assume the LW Liabilities, (iii) ConAgra or another member of the ConAgra Group has retained or assumed, or will retain or assume the Excluded Liabilities and (iv) the Special Cash Payment will be paid and the Stock Issuance and the Special SpinCo Securities Issuance will occur as provided herein (together, the LW Transfer ).
6. The Parties contemplate that, immediately following the LW Transfer, ConAgra will distribute all of the shares of SpinCo Common Stock to ConAgras stockholders without consideration on a pro rata basis (the Distribution ).
7. It is intended, for U.S. federal income Tax purposes, that (i) the LW Transfer, together with the Debt Exchange and the Distribution, will qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code and that each of ConAgra and SpinCo will be a party to the reorganization within the meaning of Section 368(b) of the Code, (ii) the Distribution, as such, will qualify as a distribution of
SpinCo Common Stock to ConAgras stockholders pursuant to Section 355 of the Code, (iii) the Special Cash Payment will qualify as money distributed to ConAgra creditors or shareholders in connection with the reorganization for purposes of Section 361(b) of the Code, (iv) the Special SpinCo Securities Issuance will qualify as a tax-free issuance under Section 361(a) of the Code and the Debt Exchange will qualify as a tax-free exchange to ConAgra within the meaning of Section 361(c) of the Code and (v) this Agreement constitutes a plan of reorganization within the meaning of Treasury Regulation Section 1.368-2(g).
Accordingly, the Parties agree as follows:
I. LW TRANSFER AND RESTRUCTURING
1.01 Transfer and Internal Restructuring . (a) Overview . Prior to consummating the Distribution, to the extent not already completed, each of ConAgra and SpinCo will, and will cause their Affiliates to, consummate the Internal Restructuring.
(b) Business Transfer Time . Subject to the satisfaction and waiver of the conditions set forth in Article II , the effective time and date of each Conveyance and assumption of any Asset or Liability in accordance with this Article I that has not occurred prior to the Distribution Date will be 12:01 a.m. Eastern Time on the Distribution Date (the Business Transfer Time ).
1.02 Conveyance of Assets; Assumption and Discharge of Liabilities . Except as otherwise expressly provided herein or in any of the other Transaction Documents or Ancillary Agreements, and except to the extent previously effected pursuant to the Internal Restructuring, upon the terms and subject to the conditions set forth in this Agreement, effective as of the Business Transfer Time:
(a) ConAgra will have assigned, transferred, conveyed and delivered ( Convey ), or will have caused the Affiliated Transferors to Convey, to SpinCo or to one or more other members of the LW Group as contemplated by the Internal Restructuring, and SpinCo will accept from ConAgra (or the applicable Affiliated Transferor), or will have caused any other applicable member of the LW Group to accept, all of ConAgras and the applicable Affiliated Transferors respective right, title and interest in and to all of the LW Assets, including the equity interests in the LW Entities (it being understood that any LW Assets that are already held by a member of the LW Group as of the Business Transfer Time will continue to be held by such LW Group member);
(b) ConAgra will have Conveyed, or will have caused the Affiliated Transferors to Convey, to SpinCo or to one or more other members of the LW Group as SpinCo may have designated, and SpinCo will (or will cause the other members of the LW Group as applicable to) assume, perform, timely pay and discharge when due, fulfill when due and comply with all of the LW Liabilities in accordance with their respective terms (it being understood that any LW Liabilities that are already Liabilities of a member of the LW Group as of the Business Transfer Time will continue to be Liabilities of such LW Group member);
2
(c) SpinCo will have, and ConAgra will have caused SpinCo to, Convey, or caused another applicable member of the LW Group to Convey, to ConAgra or to such other members of the ConAgra Group as ConAgra may designate, all of SpinCos and the applicable LW Group members respective right, title and interest in and to all of the Excluded Assets (it being understood that any Excluded Assets that are already held by a member of the ConAgra Group as of the Business Transfer Time will continue to be held by such ConAgra Group member); and
(d) SpinCo will have, and ConAgra will have caused SpinCo to, Convey, or will have caused another applicable member of the LW Group to Convey, to ConAgra or to such other members of the ConAgra Group as ConAgra may designate, and ConAgra will (or will cause another member of the ConAgra Group as applicable to) assume, perform, timely pay and discharge when due, fulfill when due and comply with all of the Excluded Liabilities in accordance with their respective terms (it being understood that any Excluded Liabilities that are already Liabilities of a member of the ConAgra Group as of the Business Transfer Time will continue to be Liabilities of such ConAgra Group member).
1.03 Transfers Not Effected Prior to the Business Transfer Time . In the event that any Conveyance of an Asset or assumption of a Liability required by any of the Transaction Documents has not been effected at or before the Business Transfer Time, the obligation to Convey such Asset or assume such Liability will continue after the Business Transfer Time and will be promptly effected, without further consideration, subject to the terms and conditions set forth in the Transaction Documents. From and after the Business Transfer Time, each of ConAgra and SpinCo will promptly Convey or cause the other members of its Group promptly to Convey to the appropriate member of the other Group, from time to time, any property received that is allocated to the other Group pursuant to this Agreement or the other Transaction Documents. Without limiting the foregoing, in the event any member of the LW Group or member of the ConAgra Group will, after the Business Transfer Time, receive funds upon the payment of accounts receivable or other amounts under Contracts or other Assets or Liabilities that are allocated to a member of the other Group pursuant to this Agreement or the other Transaction Documents, such party will Convey, or cause to be Conveyed, such funds to the applicable member of the other Group by wire transfer promptly after the receiving party becomes aware of having received such funds.
1.04 Preservation of Tax-Free Status . Notwithstanding anything in this Article I to the contrary, no ConAgra Group member nor any of its Affiliates will be required to undertake any action or arrangement contemplated by this Article I that would result in, or could reasonably be expected to result in, Tax treatment that is inconsistent with the Intended Tax-Free Treatment, as determined by ConAgra in its sole discretion.
3
1.05 LW Assets . (a) For purposes of this Agreement and subject to the exclusions set forth in Section 1.05(b) , LW Assets means all Assets owned or held by any member of the ConAgra Group that are included in any of clauses (i) through (xiv) below or that are otherwise exclusively used or held for exclusive use in the LW Business and are of a nature not otherwise addressed in such clauses, in each case whether now existing or hereafter acquired prior to the Business Transfer Time:
(i) (A) all tangible machinery, molds, tools (including special and general tools), equipment, furniture and other tangible personal property exclusively used or held for exclusive use in the LW Business, (B) computers, smartphones and similar communications equipment provided by the ConAgra Group in connection with a LW Employees performance of services, (C) all motor vehicles and other transportation equipment exclusively used or held for exclusive use in the LW Business or provided for the use of a LW Employee, and (D) the items listed on Schedule 1.05(a)(i) ;
(ii) all product inventories, raw and packaging materials, parts, work-in-process and finished goods and products, in each case to the extent exclusively used or held for exclusive use in the LW Business (the LW Inventory );
(iii) all Real Property Interests in the land and facilities listed on Schedule 1.05(a)(iii) , together with the improvements, structures and fixtures located thereon (the LW Facilities );
(iv) all issued and outstanding capital stock or other equity interests of (A) any Person that may be designated as part of the LW Group pursuant to the plan for the Internal Restructuring including the Persons listed on Schedule 1.05(a)(iv) (such capital stock or other equity interests, the LW Equity Interests , and such Persons, the LW Entities ), and (B) the Joint Venture Interests;
(v) all interests, rights, claims and benefits of ConAgra and any of its Subsidiaries pursuant to all LW Contracts, including the LW Contracts listed on Schedule 1.05(a)(v) ;
(vi) all Governmental Permits (and all pending applications therefor) that are exclusively used or held for exclusive use in the LW Business;
(vii) all Intellectual Property owned by ConAgra or any of its Subsidiaries exclusively used or held for exclusive use in the LW Business, including the Registered Intellectual Property listed on Schedule 1.05(a)(vii) , including all goodwill related to any of the foregoing and all rights to sell or recover and retain damages and costs and attorneys fees for infringement, misappropriation or other violations of any of the foregoing, whether occurring prior to, on or after the Business Transfer Time (the LW IP Assets ), together with any tangible embodiments thereof;
(viii) (A) all business records to the extent exclusively related to the LW Business, including the corporate minute books and related stock records of the members of the LW Group and the LW Joint Ventures, and employment records of the LW Employees, and (B) all other books, records, ledgers, files, documents and correspondence, in whatever form, that are exclusively related to the LW Business (collectively, the LW Books and Records ); provided , however , that ConAgra will be entitled to retain a copy of the LW Books and Records;
4
(ix) all Software exclusively used or held for exclusive use in the LW Business (all of the foregoing, the LW Software );
(x) all goodwill of the LW Business, other than any goodwill associated with the Excluded IP Assets;
(xi) all rights to causes of Action, lawsuits, judgments, claims and demands that are exclusively related to the LW Business or the ownership of the Joint Venture Interests by the LW Group or prior to the Distribution, by the ConAgra Group;
(xii) all Assets expressly allocated to any member of the LW Group pursuant to the Employee Matters Agreement;
(xiii) all rights of SpinCo and the LW Entities under this Agreement or any other Transaction Document or any Ancillary Agreement and the certificates, instruments and Transfer Documents delivered in connection herewith; and
(xiv) all accounts receivable and prepaid assets, in each case, to the extent they exclusively relate (and only to the extent so related) to the LW Business.
(b) Notwithstanding Section 1.05(a) or any other provision hereof, the LW Assets will not in any event include any of the following Assets (the Excluded Assets ):
(i) the Assets listed or described on Schedule 1.05(b)(i) ;
(ii) the Excluded IP Assets;
(iii) all Assets in respect of ConAgra Plans or corresponding to any Liabilities allocated to ConAgra or any of its Affiliates or for which ConAgra is expressly liable pursuant to the Employee Matters Agreement and all Assets in respect of all other compensation and benefit plans sponsored by the ConAgra Group, in each case other than Assets expressly allocated to any member of the LW Group pursuant to the Employee Matters Agreement;
(iv) all financial and Tax records relating to the LW Business that form part of the general ledger of ConAgra or any of its Subsidiaries (other than the members of the LW Group), any work papers of ConAgras auditors and any other Tax records (including accounting records) of ConAgra or any of its Subsidiaries (other than Tax records exclusively related to the members of the LW Group);
(v) except as otherwise provided by Section 3.05 , all rights to insurance policies or practices of ConAgra and its Subsidiaries (including any captive insurance policies, fronted insurance policies, surety bonds or corporate insurance policies or practices, or any form of self-insurance whatsoever, any refunds paid or payable in connection with the cancellation or discontinuance of any such policies or practices and any claims made under such policies);
5
(vi) all records prepared by or on behalf of ConAgra or its Subsidiaries relating to the transactions contemplated by this Agreement and all records prepared by or on behalf of ConAgra or its Subsidiaries in connection with the potential divestiture of all or a part of the LW Business or any other business or Asset of ConAgra or its Subsidiaries, including, communications with legal counsel representing ConAgra or its Affiliates and the right to assert the attorney-client privilege with respect thereto;
(vii) all rights of ConAgra or its Affiliates (other than members of the LW Group) under this Agreement or any other Transaction Document or Ancillary Agreements and the certificates, instruments and Transfer Documents delivered in connection therewith;
(viii) all cash and cash equivalents of ConAgra and its Affiliates, except as specifically provided in Schedule 1.05(b)(viii) ; and
(ix) any and all Assets that are expressly contemplated by this Agreement as Assets to be retained by ConAgra or any other member of the ConAgra Group.
1.06 LW Liabilities . (a) For the purposes of this Agreement, LW Liabilities will mean each of the following, regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Business Transfer Time, or where or against whom such Liabilities are asserted or determined or whether asserted or determined prior to the date hereof:
(i) any and all Liabilities of ConAgra and its Affiliates (including the members of the LW Group) to the extent relating to, resulting from or arising out of the ownership or use of the LW Assets or the operation or the conduct of the LW Business, whether before, at or after the Business Transfer Time;
(ii) all Liabilities that are provided by this Agreement or any other Transaction Document or any Ancillary Agreement as Liabilities to be assumed by SpinCo or any other member of the LW Group and all Liabilities of SpinCo or any other member of the LW Group under this Agreement or any other Transaction Document or any Ancillary Agreement, including all Liabilities allocated to or expressly assumed by any member of the LW Group pursuant to the Employee Matters Agreement;
(iii) all Liabilities under the LW Contracts;
(iv) all Liabilities to the extent relating to, resulting from or arising out of product liability Actions with respect to, or product returns or recalls of, products of the LW Business;
(v) all Liabilities to the extent relating to, resulting from or arising out of (A) any Environmental Conditions at the LW Facilities or that otherwise relate to, result from or arise out of (1) any Assets to be transferred to the LW Group or (2) the operation or conduct of the LW Business, (B) any presence or Release of Hazardous Materials that occurs at, on, under, or migrating to or from (x) any of the LW Facilities or
6
(y) any third-party site, to the extent such presence or Release of Hazardous Materials relate to, result from or arise out of the operation or conduct of the LW Business, (C) any property or facility formerly owned, leased, operated or used in connection with the LW Business, (D) any locations at which any Hazardous Materials generated by, from or in connection with the LW Business or any Asset to be transferred to the LW Group have been transported for treatment, storage, disposal or recycling, or (E) any violation of or remediation or other requirements or liability under any Environmental Law as a result of or relating to the operation or conduct of the LW Business;
(vi) all Liabilities related to, resulting from or arising out of the ownership of the Joint Venture Interests by the LW Group or, prior to the Distribution, the ConAgra Group; and
(vii) all Liabilities listed or described on Schedule 1.06(a)(vii) .
(b) Notwithstanding anything to the contrary in this Agreement, the LW Liabilities will not include the following Liabilities (such Liabilities, the Excluded Liabilities ):
(i) all Liabilities listed or described on Schedule 1.06(b)(i) ;
(ii) all Liabilities to the extent relating to, resulting from or arising out of any Excluded Asset, except to the extent expressly identified as LW Liabilities in Section 1.06(a) ; and
(iii) all Liabilities that are expressly contemplated by this Agreement or any other Transaction Document or any Ancillary Agreement as Liabilities to be retained or assumed by ConAgra or any other member of the ConAgra Group, and all Liabilities of any member of the ConAgra Group under this Agreement or any of the Transaction Documents or any of the Ancillary Agreements.
1.07 Termination of Intercompany Agreements; Settlement of Intercompany Accounts . (a) SpinCo, on behalf of itself and each other member of the LW Group, on the one hand, and ConAgra, on behalf of itself and each other member of the ConAgra Group, on the other hand, hereby terminate any and all Contracts between or among SpinCo or any member of the LW Group, on the one hand, and ConAgra or any member of the ConAgra Group, on the other hand, effective without further action as of the Business Transfer Time, other than this Agreement, the Transaction Documents, the Ancillary Agreements and any other Contract expressly contemplated by this Agreement to be entered into or continued by the Parties or any member of their respective Groups. No such Contract (including any provision thereof which purports to survive termination) will be of any further force or effect after the Business Transfer Time and all parties will be released from all Liabilities thereunder. Each Party will, at the reasonable request of any other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.
(b) ConAgra will have caused all of the intercompany receivables, payables, loans and other accounts, rights and Liabilities between SpinCo and any
7
other member of the LW Group, on the one hand, and ConAgra or any other member of the ConAgra Group, on the other hand, in existence as of the Business Transfer Time (collectively, the Intercompany Accounts ) to be (i) settled in full in cash or (ii) otherwise cancelled, terminated or extinguished, in which case the balance will be treated as a contribution to capital or a dividend (in the case of each of clauses (i) and (ii), with no further liability or obligation thereunder), such that, as of the Business Transfer Time, there are no Intercompany Accounts outstanding.
(c) From and after the date hereof, SpinCo will substitute those bonds, guaranties, letters of credit, indemnities, assurances, comfort letters and other arrangements similar to the foregoing issued by any member of the ConAgra Group (other than a member of the LW Group) in support of the LW Business set forth on Schedule 1.07(c) (collectively, ConAgra Support Arrangements ) for bonds, guaranties, letters of credit, indemnities, assurances, comfort letters or such similar arrangements issued by one or more members of the LW Group, such arrangements to be effective as of the Business Transfer Time (or, if not in place as of the Business Transfer Time, as promptly as reasonably practicable thereafter). Such substitution shall include the assumption by SpinCo of, and the release of ConAgra and the members of the ConAgra Group of all of their respective obligations under, each of the ConAgra Support Arrangements.
1.08 Transfers In Violation of Law or Required Consents; Certain Shared Business Contracts . (a) If and to the extent that the consummation of the LW Transfer or Conveyance of Excluded Assets would be a violation of applicable Laws or require any Consent or Governmental Approval in connection with the transactions contemplated hereby that has not been obtained as of the Business Transfer Time, then, notwithstanding any other provision hereof, such Conveyance will automatically be deferred and will not occur until all legal impediments are removed or such Consents and Governmental Approvals have been obtained or ConAgra has received written confirmation from such parties reasonably satisfactory in form and substance to ConAgra confirming that such Consent or Governmental Approval is not required. Notwithstanding the foregoing, any such Asset (x) will not be Conveyed in, or considered part of, the LW Transfer and (y) will still be considered a LW Asset or Excluded Asset, as applicable, and the Person retaining such Asset will thereafter hold such Asset in trust for the benefit, insofar as reasonably possible, of the Person entitled thereto (at such Persons sole expense) until the consummation of the Conveyance thereof. The Parties will use their respective Commercially Reasonable Efforts to (i) continue to seek to remove any legal impediments or secure any contractual Consents required from third parties or Governmental Approval necessary to Convey such Asset (or written confirmation that no such Consent is required) and (ii) develop and implement arrangements to place the Person entitled to receive such Asset, insofar as reasonably possible and to the extent not prohibited by applicable Law or the relevant Contract, in the same position as if such Asset had been Conveyed as contemplated hereby such that all the benefits and burdens relating to such Asset, including possession, use, risk of loss, potential for gain, any Tax Liabilities in respect thereof and dominion, control and command over such Asset, are to inure from and after the Business Transfer Time to such Person. If and when the applicable legal or
8
contractual impediments are removed or the applicable Consents or Governmental Approvals are obtained, the Conveyance of the applicable Asset will be effected in accordance with the terms of this Agreement or such applicable Transaction Document or applicable Ancillary Agreement without further consideration. Except with respect to the Assets and Liabilities that are the subject of the Ancillary Agreement, the obligations set forth in this Section 1.08(a) will terminate on the date that is 18 months after the Distribution Date.
(b) The Parties will, and will cause their respective Subsidiaries to, use Commercially Reasonable Efforts to work together (and, if necessary and desirable, to work with the third party to such Shared Business Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Business Contract, such that (a) a member of the LW Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Business Contract relating to the LW Business (the LW Portion ), which rights will be a LW Asset and which obligations will be a LW Liability, and (b) a member of the ConAgra Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Business Contract relating to the Retained Business (the ConAgra Portion ), which rights will be an Excluded Asset and which obligations will be an Excluded Liability. If the Parties, or their respective Subsidiaries, as applicable, are not able to enter into an arrangement to formally divide, partially assign, modify and/or replicate such Shared Business Contract as contemplated by the previous sentence, then the Parties shall use their Commercially Reasonable Efforts to develop and implement alternative arrangements to place (x) the LW Group, insofar as reasonably possible, in the same position as if the portion of such Shared Business Contract related to the LW Business had been separated as contemplated hereby such that all the benefits and burdens relating to such portion, including risk of loss, potential for gain, any Tax Liabilities in respect thereof and dominion, control and command over such portion, are to inure from and after the Business Transfer Time to the LW Group and (y) the ConAgra Group, insofar as reasonably possible, in the same position as if the portion of such Shared Business Contract not related to the LW Business had been separated as contemplated hereby such that all the benefits and burdens relating to such portion, including risk of loss, potential for gain, any Tax Liabilities in respect thereof and dominion, control and command over such portion, are to inure from and after the Business Transfer Time to the ConAgra Group. The obligations set forth in this Section 1.08(b) will terminate on the one-year anniversary of the Distribution.
(c) Notwithstanding anything in this Section 1.08 to the contrary, no member of the ConAgra Group nor any of its Affiliates will be required to undertake any action or arrangement contemplated by this Section 1.08 (i) if ConAgra determines in its sole discretion that such arrangement or action would increase the likelihood that the Intended Tax-Free Treatment would not apply to the transactions contemplated by this Agreement or (ii) if such arrangement is not in compliance with applicable Law (or the relevant Shared Business Contract).
9
1.09 Evidence of Transfer of LW Assets and LW Liabilities . In furtherance of the Conveyance of LW Assets and assumption of LW Liabilities provided in Sections 1.02(a) and (b) , on or prior to the Business Transfer Time, (a) ConAgra will have executed and delivered, and will have caused its Subsidiaries to execute and deliver, such bills of sale, stock powers, certificates of title, deeds, assignments of Contracts, and other instruments of Conveyance (in each case to the extent applicable and in a form that is consistent with the terms and conditions of this Agreement, and otherwise customary or statutorily required in the jurisdiction in which the relevant Assets are located), as necessary to evidence the Conveyance of all of ConAgras and its Subsidiaries right, title and interest in and to the LW Assets to SpinCo and the other members of the LW Group (it being understood that no such bill of sale, stock power, certificate of title, deed, assignment or other instrument of Conveyance will require ConAgra or any of its Affiliates to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement except to the extent required to comply with applicable local Law, in which case the Parties will enter into such supplemental agreements or arrangements as are effective to preserve the allocation of economic benefits and burdens contemplated by this Agreement) and (b) SpinCo will have executed and delivered such assumptions of LW Liabilities and other instruments of assumption (in each case in a form that is consistent with the terms and conditions of this Agreement, and otherwise customary or statutorily required in the jurisdiction in which the relevant Liabilities are located) as and to the extent reasonably necessary to evidence the valid and effective assumption of the LW Liabilities by SpinCo or the applicable members of the LW Group. All of the foregoing documents contemplated by this Section 1.09 will be referred to collectively herein as the ConAgra Transfer Documents .
1.10 Transfer of Excluded Assets and Assumption of Excluded Liabilities . In furtherance of the Conveyance of Excluded Assets and assumption of Excluded Liabilities provided in Sections 1.02(c) and (d) , on or prior to the Business Transfer Time, (a) SpinCo will have executed and delivered, and will have caused its Subsidiaries to execute and deliver, such bills of sale, stock powers, certificates of title, deeds, assignments of Contracts and other instruments of Conveyance (in each case to the extent applicable and in a form that is consistent with the terms and conditions of this Agreement, and otherwise customary or statutorily required in the jurisdiction in which the relevant Assets are located), as necessary, to evidence the Conveyance of all of SpinCos and its Subsidiaries right, title and interest in and to the Excluded Assets to ConAgra and the other members of the ConAgra Group (it being understood that no such bill of sale, stock power, certificate of title, deed, assignment or other instrument of Conveyance will require SpinCo or any of its Affiliates to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement except to the extent required to comply with applicable local Law, in which case the Parties will enter into such supplemental agreements or arrangements as are effective to preserve the allocation of economic benefits and burdens contemplated by this Agreement) and (b) ConAgra will have executed and delivered such assumptions of Excluded Liabilities and other instruments of assumption (in each case in a form that is consistent with the terms and conditions of this Agreement, and otherwise customary or statutorily required in the jurisdiction in which the relevant Liabilities are located) as and
10
to the extent reasonably necessary to evidence the valid and effective assumption of the Excluded Liabilities by ConAgra or the applicable member of the ConAgra Group. All of the foregoing documents contemplated by this Section 1.10 will be referred to collectively herein as the LW Transfer Documents and, together with the ConAgra Transfer Documents, the Transfer Documents .
1.11 LW Transfer . (a) At the Business Transfer Time, or within seven days prior to the Distribution Date, SpinCo will borrow funds in an amount equal to approximately $823.5 million (the Special Cash Amount ). Immediately thereafter and prior to the Distribution, ConAgra and SpinCo shall, subject to the terms and conditions set forth herein, effect the LW Transfer as described by this Section 1.11(a) . ConAgra shall Convey the LW Assets to SpinCo as contemplated by Section 1.02(a) . As consideration for such Conveyance, no later than immediately prior to the Distribution, SpinCo shall:
(i) issue and deliver to ConAgra a number of shares of SpinCo Common Stock equal to 146,046,295 (the Stock Issuance );
(ii) pay the Special Cash Amount in immediately available funds to one or more accounts of ConAgra designated in writing by ConAgra (the Special Cash Payment );
(iii) issue SpinCo Securities to ConAgra in an aggregate principal amount equal to $1,540,999,000 (the Special SpinCo Securities Issuance ); and
(iv) assume the LW Liabilities in accordance with the requirements of this Agreement.
(b) ConAgra shall maintain any funds received pursuant to payment of the Special Cash Payment in a non-interest bearing segregated bank account (the Segregated Account ). Within 12 months following the Distribution, ConAgra will distribute the cash held in the Segregated Account exclusively to (i) ConAgras creditors in retirement of outstanding ConAgra indebtedness or (ii) to ConAgras shareholders in repurchase of, or distribution with respect to, its shares.
1.12 Waiver of Bulk-Sales Laws . Each of ConAgra and SpinCo hereby waives compliance by each member of their respective Group with the requirements and provisions of the bulk-sale or bulk-transfer Laws of any jurisdiction that may otherwise be applicable with respect to the Conveyance of any or all of the Assets to any member of the ConAgra Group or LW Group, as applicable.
1.13 Disclaimer; No Representations or Warranties . Except as expressly set forth in this Agreement or in any of the other Transaction Documents or any of the Ancillary Agreements, each Party on behalf of itself and each of its Affiliates understands and agrees that neither Party nor any of its Affiliates is making any representation or warranty of any kind whatsoever, express or implied, to the other party or any of its Affiliates or to any other Person in respect of the contemplated transactions or any information that may have been exchanged or provided pursuant to this
11
Agreement or any other Transaction Document or any Ancillary Agreement, and that all LW Assets are being assigned and transferred, and all LW Liabilities are being assumed, on an as is, where is basis. Without limiting the generality of the foregoing, (i) neither ConAgra nor any of its Affiliates has made or shall be deemed to have made any representations or warranties in any presentation or written information relating to the LW Business given or to be given in connection with the contemplated transactions or in any filing made or to be made by or on behalf of ConAgra or any of its Affiliates with any Governmental Authority, and no statement made in any such presentation or written materials, made in any such filing or contained in any such other information shall be deemed a representation or warranty hereunder or otherwise, and (ii) ConAgra, on its own behalf and on behalf of the other members of the ConAgra Group, expressly disclaims any implied warranties, including warranties of fitness for a particular purpose and warranties of merchantability. SpinCo acknowledges and agrees that SpinCo specifically disclaims that it is relying upon or has relied upon any representations or warranties that have been made by ConAgra or any other Person relating to the LW Business, and acknowledges and agrees that ConAgra has specifically disclaimed and does hereby specifically disclaim any representation or warranty made by ConAgra or any other person relating to the LW Business.
II. THE DISTRIBUTION
2.01 Actions Prior to the Distribution . (a) Subject to the conditions specified in Section 2.02 and subject to Section 2.05 , each of the Parties will use reasonable best efforts to consummate the Distribution. Such actions will include those specified in this Section 2.01 .
(b) Prior to the Distribution, each of the Parties will have executed and delivered all Transaction Documents and all Ancillary Agreements to which it is intended to be a party, and will have caused the other members of the LW Group or the ConAgra Group, as applicable, to execute and deliver any Transaction Documents or Ancillary Agreements to which such Persons are intended to be parties.
(c) Prior to the Distribution, SpinCo will have mailed the Information Statement to the Record Holders.
(d) SpinCo will prepare, file with the Commission and use reasonable best efforts to cause to become effective any registration statements or amendments thereto required to effect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the transactions contemplated by this Agreement or any of the Transaction Documents or any of the Ancillary Agreements.
(e) Each of the Parties will take all such actions as may be necessary or appropriate under the securities or blue sky Laws of the states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution.
12
(f) SpinCo will prepare and file, and will use reasonable best efforts to have approved prior to the Distribution, an application for the listing on NYSE of the SpinCo Common Stock to be distributed in the Distribution, subject to official notice of listing.
(g) Prior to the Distribution, the existing directors of SpinCo will duly elect the individuals listed as members of the SpinCo board of directors in the Information Statement, and such individuals will become the members of the SpinCo board of directors effective as of no later than immediately prior to the Distribution; provided , however , that to the extent required by any Law or requirement of NYSE or any other national securities exchange, as applicable, one independent director will be appointed by the existing board of directors of SpinCo to begin his or her term prior to the Distribution in accordance with such Law or requirement.
(h) Prior to the Distribution, each individual who will be an employee of any member of the ConAgra Group after the Distribution and who is a director or officer of any member of the LW Group shall have resigned or been removed from each such directorship or office held by such person, effective no later than immediately prior to the Distribution.
(i) Immediately prior to the Distribution, SpinCos Restated Certificate of Incorporation and Restated Bylaws, each in substantially the form filed as an exhibit to the Form 10, will be in effect.
(j) The Parties will, subject to Section 2.05 , take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 2.02 to be satisfied and to effect the Distribution on the Distribution Date.
2.02 Conditions to the Distribution . The obligations of the Parties to consummate the Distribution will be conditioned on the satisfaction, or waiver by the ConAgra Board, of the following conditions:
(a) The ConAgra Board, in its sole and absolute discretion, shall have authorized and approved the Separation and the Distribution and shall not have withdrawn such authorization and approval;
(b) The ConAgra Board shall have declared the dividend of SpinCo Common Stock to the Record Holders;
(c) The Commission shall have declared the Form 10 effective under the Exchange Act, no stop order suspending the effectiveness of the Form 10 shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission;
(d) The NYSE or another national securities exchange approved by the ConAgra Board shall have accepted the SpinCo Common Stock for listing, subject to official notice of issuance;
13
(e) The Internal Restructuring and the LW Transfer shall have been consummated in all material respects;
(f) ConAgra shall have received a written opinion from Davis Polk & Wardwell LLP, tax counsel to ConAgra, to the effect that (i) the LW Transfer, taken together with the Distribution, will qualify as a tax-free reorganization pursuant to Section 368(a)(1)(D) of the Code, and that each of ConAgra and SpinCo will be a party to the reorganization within the meaning of Section 368(b) of the Code, (ii) the Distribution, as such, will qualify as a distribution of SpinCo stock to ConAgras shareholders pursuant to Section 355 of the Code and (iii) the Special Cash Payment will qualify as money distributed to ConAgra creditors or shareholders in connection with the reorganization for purposes of Section 361(b) of the Code;
(g) ConAgra shall have received a written opinion from a nationally recognized financial advisory firm as may be reasonably selected by the ConAgra Board that, as of the Distribution Date, (i) SpinCo will not be insolvent, (ii) SpinCo will not be left with unreasonably small capital, (iii) SpinCo will not have incurred debts or other Liabilities beyond its ability to pay such debts or other Liabilities as they mature and (iv) the capital of SpinCo will not be impaired;
(h) No order, injunction or decree that would prevent the consummation of the Distribution shall be threatened, pending or issued (and still in effect by any Governmental Authority of competent authority, no other legal restraint or prohibition preventing the consummation of the Distribution shall be in effect, and no other event outside the control of ConAgra shall have occurred or failed to occur that prevents the consummation of the Distribution;
(i) No other events or developments shall have occurred prior to the Distribution that, in the judgment of the ConAgra Board, would result in the Distribution having a material adverse effect on ConAgra or ConAgras stockholders; and
(j) The actions set forth in Section 2.01(b) , (c) , (g) , (h) and (i) shall have been completed in all material respects.
The foregoing conditions may be waived only by the ConAgra Board, in its sole and absolute discretion, are for the sole benefit of ConAgra and will not give rise to or create any duty on the party of the ConAgra Board to waive or not waive such conditions or in any way limit the right of termination of this Agreement set forth in Section 6.02 or alter the consequences of any such termination from those specified in Section 6.02 . Any determination made by the ConAgra Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 2.02 will be conclusive.
2.03 The Distribution . (a) SpinCo will cooperate with ConAgra to accomplish the Distribution and will, at the direction of ConAgra, use reasonable best efforts to promptly take any and all actions necessary or desirable to effect the Distribution. Each of the Parties will provide, or cause the applicable member of its Group to provide, to the transfer agent or the exchange agent (the Exchange Agent ) all documents and information required to complete the Distribution.
14
(b) Subject to the terms and conditions set forth in this Agreement, (i) on or prior to the Distribution Date, for the benefit of and distribution to the Record Holders, ConAgra will deliver to the Exchange Agent all of the issued and outstanding shares of SpinCo Common Stock then owned by ConAgra and book-entry authorizations for such shares and (ii) on the Distribution Date, ConAgra will instruct the Exchange Agent to (A) distribute to each Record Holder (or such Record Holders bank, brokerage firm or other nominee on such Record Holders behalf) electronically, by direct registration in book-entry form, the number of whole shares of SpinCo Common Stock to which such Record Holder is entitled based on the Distribution Ratio and (B) receive and hold for and on behalf of each Record Holder, the number of fractional shares of SpinCo Common Stock to which such Record Holder is entitled based on the Distribution Ratio. The Distribution will be effective at the Distribution Effective Time. On or as soon as practicable after the Distribution Date, the Exchange Agent will mail to each Record Holder an account statement indicating the number of whole shares of SpinCo Common Stock that have been registered in book-entry form in such Record Holders name.
(c) ConAgra and SpinCo, as the case may be, will instruct the Exchange Agent, as applicable, to deduct and withhold from the consideration otherwise required to be distributed pursuant to this Agreement such amounts as are required to be deducted and withheld from such consideration under the Code or any provision of state, local or foreign Tax Law. Any withheld amounts will be treated for all purposes of this Agreement as having been distributed to the Persons otherwise entitled thereto.
2.04 Fractional Shares . ConAgras stockholders holding a number of ConAgra Common Stock, on the Record Date, which would entitled such stockholders to receive less than one whole share of SpinCo Common Stock in the Distribution will receive cash in lieu of fractional shares. Fractional shares of SpinCo Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. The Exchange Agent and ConAgra will, as soon as practicable after the Distribution Date, (a) determine the number of whole and fractional shares of SpinCo Common Stock that each Record Holder is entitled to receive in the Distribution, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then-prevailing trading prices on behalf of Record Holders to whom fractional share interests were distributed in the Distribution and (c) distribute to each such Record Holder, or for the benefit of each beneficial owner of fractional shares, such Record Holders or beneficial owners ratable share of the net proceeds of such sales, based upon the average gross selling price per share of SpinCo Common Stock after making appropriate deductions for any amount required to be withheld under applicable Tax Law and less any brokers charges, commissions or transfer Taxes. The Exchange Agent, in its sole discretion, will determine the timing and method of selling such shares, the selling price of such shares and the broker-dealer to which such shares will be sold; provided , however , that the designated broker-dealer is not an Affiliate of ConAgra or SpinCo. Neither ConAgra nor SpinCo will pay any interest on the proceeds from the sale of such shares.
15
2.05 Sole Discretion of the ConAgra Board . The ConAgra Board will, in its sole and absolute discretion, determine the Record Date, the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition, and notwithstanding anything to the contrary set forth in this Agreement, the ConAgra Board, in its sole and absolute discretion, may at any time and from time to time until the Distribution decide to abandon the Distribution or modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution.
2.06 Plan of Reorganization . This Agreement constitutes a plan of reorganization under Treasury Regulation Section 1.368-2(g) with respect to the transactions contemplated hereby.
III. COVENANTS
3.01 Further Assurances; Efforts To Obtain Consents . In addition to the actions specifically provided for elsewhere in this Agreement or in any other Transaction Document, each Party will cooperate with each other and use (and will cause their respective Subsidiaries and Affiliates to use) their reasonable best efforts, prior to, at and after the Distribution, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the other Transaction Documents as promptly as practicable; provided , however , that neither ConAgra nor SpinCo will be required to make any non-de minimis payments, incur any non-de minimis Liability or offer or grant any non-de minimis accommodation (financial or otherwise) to any third party in connection with obtaining any Consent or Governmental Approval. Except as otherwise expressly contemplated by another provision of the Transaction Documents or the Ancillary Agreements, each Party will bear its respective costs and expenses incurred in connection with obtaining such Consents and Governmental Approvals. Without limiting the foregoing, upon the reasonable request of a Party hereto, the other Party shall, and shall cause its respective Affiliates to, execute, acknowledge and deliver all such further assurances, deeds, assignments, conveyances, powers of attorney and other instruments and papers as may be required for the transfer to a member of the LW Group of direct or indirect ownership of the LW Assets and to a member of the ConAgra Group ownership of the Excluded Assets and the assumption by the LW Group of the LW Liabilities and the assumption by the ConAgra Group of the Excluded Liabilities, as contemplated by this Agreement (it being understood that no such assurances, deeds, assignments, conveyances, powers of attorney or other instruments or papers will require ConAgra or any of its Affiliates to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement).
16
3.02 Non-Solicit . (a) For a period of 24 months following the Distribution Date, ConAgra will not, and will cause its Subsidiaries not to, without first discussing with SpinCos Chief Human Resources Officer (or equivalent officer) or such officers delegee and obtaining the prior written approval of SpinCo, directly or indirectly solicit (or cause to be directly or indirectly solicited) for employment any Transferred Employees who are employed at the level of Senior Manager (or equivalent) or above; provided that the foregoing restriction will not apply to (i) generalized searches for employees through media advertisements of general circulation, employment search firms, open job fairs or other similar means which are not specifically targeted at such Transferred Employees or hiring any person that responds to such generalized search or (ii) any such Transferred Employees whose employment is terminated by SpinCo or any of its Affiliates (including any member of the LW Group) or who voluntarily terminates his or her employment prior to any such solicitation by Parent or its Subsidiaries.
(b) For a period of 24 months following the Distribution Date, SpinCo will not, and will cause its Affiliates (including any member of the LW Group) not to, without first discussing with ConAgras Chief Human Resources Officer (or equivalent) or such officers delegee and obtaining the prior written approval of ConAgra, directly or indirectly solicit (or cause to be directly or indirectly solicited) for employment any person who is at the time of such solicitation an employee of ConAgra or any of its Subsidiaries (other than any LW Business employee), in any case, who is employed at the level of Senior Manager or above; provided that (i) the foregoing restriction will not apply to generalized searches for employees through media advertisements of general circulation, employment search firms, open job fairs or other similar means which are not specifically targeted at such persons or hiring any person who responds to such generalized search, (ii) any such employee of ConAgra or any of its Subsidiaries (other than any LW Business employee) whose employment is terminated by ConAgra or any of its Subsidiaries (including any member of the ConAgra Group) or who voluntarily terminates his or her employment prior to any such solicitation by SpinCo or its Subsidiaries.
3.03 Access to Information; Cooperation .
(a) SpinCo to ConAgra . Subject to Section 3.03(e) , from the Distribution Date until the five-year anniversary of the Distribution Date, upon reasonable request, SpinCo will, and will cause the members of the LW Group to: (i) promptly afford to ConAgra and its Representatives reasonable access upon reasonable prior notice during normal business hours, to its offices, properties, agreements, books, records, employees, auditors and other agents (giving consideration to business demands of such employees, auditors and other agents), to the extent relating to the LW Business prior to the Distribution Effective Time, and provide copies of such Information (including any Shared Information in its possession or under its control) as ConAgra may reasonably request for any proper purpose, including in connection with (A) the preparation of any financial statements or reports or the satisfaction of its public reporting obligations, (B) to the extent requested to permit ConAgra or any of its Affiliates to comply with their financial reporting, accounting or
17
auditing obligations with respect to any period ending before the Distribution Date, (C) any judicial, quasi-judicial, administrative or audit proceeding or Action related to the conduct or ownership of the LW Group for which ConAgra or such Affiliate has retained any Liability under this Agreement, (D) the defense or pursuit of any claims, allegations or actions that relate to or may relate to any Excluded Assets, Excluded Liabilities or claim for indemnification, and (E) otherwise to the extent reasonably required by ConAgra; and (ii) use reasonable best efforts to cooperate in the defense or pursuit of any Excluded Asset or Excluded Liability or any claim or action that relates to occurrences involving the LW Business or the Retained Business prior to the Distribution Date; provided that ConAgra will reimburse the LW Group for any reasonable out-of-pocket expenses (including fees and expenses of attorneys, accountants and other agents or representatives) incurred by any member of the LW Group in connection with any such defense, claim or action. ConAgra agrees to treat and hold as confidential all Information provided or otherwise made available to it or any of its Representatives under this Section 3.03(a) in accordance with the provisions of Section 3.04 .
(b) ConAgra to SpinCo . Subject to Section 3.03(e) , from the Distribution Date until the five-year anniversary of the Distribution Date, upon reasonable request, ConAgra will, and will cause the members of the ConAgra Group to: (i) promptly afford to SpinCo and its Representatives reasonable access upon reasonable prior notice during normal business hours, to its offices, properties, agreements, books, records, employees, auditors and other agents (giving consideration to business demands of such employees, auditors and other agents), to the extent relating to the LW Business prior to the Distribution Effective Time, and provide copies of such Information (including any Shared Information in its possession or under its control) as SpinCo may reasonably request for any proper purpose, including in connection with (A) the preparation of any financial statements or reports or the satisfaction of its public reporting obligations, (B) to the extent requested to permit SpinCo or any of its Affiliates to comply with their financial reporting, accounting or outstanding obligations, (C) any judicial, quasi-judicial, administrative or audit proceeding or Action related to the conduct or ownership of the LW Group for which SpinCo or such a member of the LW Group has assumed any Liability under this Agreement, (D) the defense or pursuit of any claims, allegations or actions that relate to or may relate to any LW Assets, LW Liabilities or claim for indemnification, and (E) otherwise to the extent reasonably required by SpinCo; and (ii) use reasonable best efforts to cooperate in the defense or pursuit of any LW Asset or LW Liability or any claim or action that relates to occurrences involving the LW Business prior to the Distribution Date; provided that SpinCo will reimburse the ConAgra Group for any reasonable out-of-pocket expenses (including fees and expenses of attorneys, accountants and other agents or representatives) incurred by any member of the ConAgra Group in connection with any such defense, claim or action. SpinCo agrees to treat and hold as confidential all Information provided or otherwise made available to it or any of its Representatives under this Section 3.03(b) in accordance with the provisions of Section 3.04 .
18
(c) Shared Information . Except as otherwise provided in the Transition Services Agreement or as prohibited by applicable Law, each Party, on behalf of its respective Group, will provide, or cause to be provided, to the other Partys Group, at any time after the Distribution Date and until the seven-year anniversary of the Distribution Date, as soon as reasonably practicable after written request therefor, any Shared Information in its possession or under its control. Each of ConAgra and SpinCo agree to make their respective personnel available during regular business hours to discuss the Information exchanged pursuant to this Section 3.03 . Prior to the Distribution, each Party will take measures that it reasonably determines in good faith to be appropriate to ensure that any competitively sensitive Shared Information from one Party is not disclosed to the other Partys personnel involved in a competing business.
(d) Reimbursement . The Party requesting Information will reimburse the other Party for the reasonable third-party out-of-pocket costs and expenses (including attorneys fees, but excluding reimbursement for general overhead, salaries and employee benefits (other than reasonable administrative overhead directly attributable to requests for access made by or on behalf of the Party requesting access (e.g., overtime))), if any, of creating, gathering and copying such Information, to the extent that such costs are reasonably incurred by the other Party of its Representatives for the benefit of the requesting Party.
(e) No Obligation to Disclose . Notwithstanding anything to the contrary contained herein, nothing in this Section 3.03 will require (i) ConAgra or SpinCo, as applicable, to provide the other Party or its Representatives with access to (A) personnel records of employees relating to individual performance or evaluation records, medical histories or other Information which, in the disclosing partys good faith opinion, is sensitive or the disclosure of which could subject such party or its Affiliates to risk of liability or violation of any data privacy Laws, (B) Information the disclosure of which, in the disclosing partys reasonable good faith opinion (x) would conflict with confidentiality obligations to which such Party or any of its Affiliates is bound, (y) would reasonably be expected to result in the forfeiture or waiver of any attorney-client or similar privilege, or (z) would violate an applicable Law, provided that , in the case of each of clause (x), (y) and (z), the disclosing party will use Commercially Reasonable Efforts to provide the other Party, to the extent possible, with access to the relevant Information in a manner that would not reasonably be expected to conflict with confidentiality obligations, result in the forfeiture or waiver of any such attorney-client or similar privilege, or violate applicable Law, (ii) either Partys independent accountants to make available to the other party or its Representatives any work papers unless and until such Person has signed a customary confidentiality and hold harmless agreement relating to such access to work papers in form and substance reasonably acceptable to such independent accountants or (iii) either ConAgra or SpinCo to provide any cost or pricing Information for any of its products that compete directly with the other Partys products. In the event that a Party relies upon this Section 3.03(e) in not providing the other Party with any information or material requested, such non-providing Party shall be required to promptly notify the other Party that it has determined to not provide information or materials pursuant to this Section 3.03(e) .
19
(f) Ownership of Information . Except as expressly provided in this Agreement or other Transaction Document or an Ancillary Agreement, no Party or member of such Partys Group grants or confers rights of license or any other rights in any Information owned by any member of such Partys Group to any member of the other Partys Group hereunder. Any Information owned by a Party that is provided to the other Party pursuant to this Section 3.03 will remain the property of the Party that owned and provided such Information. Each Party will, and will cause members of their respective Groups to, remove and destroy any hard drives or other electronic data storage devices from any computer or server that is reasonably likely to contain Information that is protected by this Section 3.03 and that is transferred or sold to a third party or otherwise disposed of in accordance with Section 3.03(g) , unless required by Law or bona fide document retention policies to retain such materials.
(g) Record Retention . Each Party agrees to use its Commercially Reasonable Efforts to retain all Information that relates to the operations of SpinCo and the LW Business or the LW Joint Ventures in its respective possession or control at the Business Transfer Time and at the Distribution in accordance with their respective then existing document retention policies, as such policies may be amended from time to time.
3.04 Confidentiality . (a) From and after the Distribution, each of the Parties will hold, and will cause the other members of its Group to hold, in strict confidence, with at least the same degree of care that it applies to its own business sensitive and proprietary information, all business sensitive or proprietary Information concerning or belonging to the members of the other Group (such Information, Confidential Information ) obtained by it prior to the Distribution or furnished to it by any member of the other Group pursuant to this Agreement or any Transaction Document or any Ancillary Agreement. Neither Party will (and each Party will cause the other members of its Group not to) disclose any Confidential Information to any other Person, except (i) to the extent that disclosure is compelled by subpoena or other compulsory disclosure notice from a Governmental Authority or, in the opinion of ConAgras or SpinCos counsel (as the case may be), by other requirements of Law, but only after compliance with Section 3.04(b) , (ii) to the extent such Party can show that such Confidential Information was (A) in the public domain through no fault of such Party or any member of such Partys Group or any of its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (B) later lawfully acquired from other sources by such Party (or any member of such Partys Group), which sources are not themselves bound by a confidentiality obligation or (C) independently generated without reference to any proprietary or Confidential Information of the disclosing Party or the other members of its Group or (iii) to its directors, officers, employees, agents, accountants, counsel and other advisors and representatives who need to know such Information (who will be advised of their obligations hereunder with respect to such Information in advance of its disclosure to such persons). Neither Party will (and each Party will cause the other members of its Group not to) use any Confidential Information for any purpose other than for which it was disclosed by any member of the other Group.
20
(b) Upon any member of the LW Group or the ConAgra Group receiving any subpoena or other compulsory disclosure notice from a Governmental Authority that requests disclosure of Confidential Information that is subject to the confidentiality provisions of this Section 3.04 , the recipient of the notice will promptly provide to ConAgra, in the case of receipt by a member of the LW Group, or to SpinCo, in the case of receipt by a member of the ConAgra Group, a copy of such notice and an opportunity to seek reasonable protective arrangements. In the event that such appropriate protective arrangements are not obtained, the Person that is required to disclose such Confidential Information will furnish, or cause to be furnished, only that portion of such Confidential Information that is legally required to be disclosed and will use reasonable best efforts to ensure that confidential treatment is accorded such Confidential Information.
3.05 Insurance Matters . From and after the Distribution, the members of the LW Group will cease to be insured by insurance policies of any ConAgra Group member or by any of ConAgra Group members self-insurance programs, and ConAgra and such other ConAgra Group members, as applicable, will retain all rights to control such insurance policies and self-insurance programs, including the right to exhaust, settle, release, commute, buy back or otherwise resolve disputes with respect to any of its insurance policies and self-insurance programs. The Parties acknowledge that the members of the LW Group, their directors, officers or other employees and the LW Business (collectively, the LW Insureds ) may be entitled to the benefit of coverage under the insurance policies made available through ConAgra Group members as described on Schedule 3.05 under the heading Retained Policies (the Retained Policies ), in each case with respect to acts, facts, circumstances or omissions occurring prior to Distribution ( Pre-Distribution Occurrences ), and ConAgra hereby authorizes any LW Insured to report (at such LW Insureds sole cost and expense) any and all Pre-Distribution Occurrences arising in connection with such LW Insured to the applicable insurance providers to the extent permitted under the Retained Policies, and where not permitted, agrees to make such report on the LW Insureds behalf ( Retained Policy Claims ), and in either case the LW Insured will provide notice to ConAgra of any such Retained Policy Claim. With respect to Retained Policy Claims made pursuant to the preceding sentence ConAgra will, and will cause its respective Affiliates to, use Commercially Reasonable Efforts to assist any LW Insured in obtaining the benefit of the applicable insurance coverage and pay such benefit, if any, to such LW Insured (net of any Recovery Costs incurred by ConAgra, as a result of the same); provided that, (x) SpinCo will be fully liable for all uninsured, self-insured or fronted amounts in respect of any Retained Policy Claims, and (y) such LW Insured agrees to reimburse ConAgra promptly upon request for all out-of-pocket and documented costs or expenses incurred by ConAgra or any ConAgra Affiliate in connection with making or pursuing any claim pursuant to this Section 3.05 , including the costs of filing a claim and any deductibles, premium increases or other amounts that are or become payable by ConAgra or any ConAgra Affiliate under the applicable insurance policies or self-insurance programs as a result of claims made pursuant to this Section 3.05 (such costs and expenses referred to in this clause (y), Recovery Costs ). With respect to Pre-Distribution Occurrences, ConAgra (with respect to the Retained Policies) will maintain the directors and officers insurance coverage in effect as of the Distribution Date, or substantially similar
21
coverage, in full force and effect. Notwithstanding the forgoing, this Section 3.05 shall not apply to insurance coverage relating to workers compensation, which is addressed in the Employee Matters Agreement. For purposes of this Agreement, the following will not be considered insurance available to SpinCo: (A) any deductible payable by ConAgra; (B) any retention payable by ConAgra; (C) any coinsurance payable by ConAgra; and (D) any coverage that ultimately will be payable or reimbursable by ConAgra through any arrangement, including an insurance-fronting arrangement, a fronted insurance policy, or a retrospective rating program.
3.06 Privileged Matters . (a) The Parties acknowledge and agree that the LW Groups attorney-client privilege, attorney work-product protection and expectation of client confidence with respect to any communications ( Privileged Communications ) concerning any proposed sale of the LW Business or any other transaction contemplated by this Agreement or any of the other Transaction Documents or any of the Ancillary Agreements (such Privileged Communications, Privileged Transaction Communications ), and all information and documents covered by such privilege, protection or expectation shall be retained and controlled by ConAgra, and may be waived only by ConAgra. The Parties acknowledge and agree that the Privileged Transaction Communications shall not be controlled, owned, used, waived or claimed by the LW Group upon consummation of the Distribution; and in the event of a dispute between a member of the LW Group and a third party or any other circumstance in which a third party requests or demands that the member of the LW Group produce Privileged Transaction Communications, SpinCo shall cause such member of the LW Group to assert such attorney-client privilege on behalf of the applicable member of ConAgra Group to prevent disclosure of Privileged Transaction Communications to such third party.
(b) The Parties acknowledge and agree that Privileged Communications concerning general business matters related to the LW Business and the LW Group and arising prior to the Distribution for the benefit of both ConAgra and the LW Group (such Privileged Communications, Privileged Business Communications ) shall be subject to a joint privilege and protection between ConAgra, on the one hand, and the LW Group, on the other hand, and ConAgra and the LW Group shall have equal right to assert such joint privilege and protection and no such joint privilege or protection may be waived by (i) ConAgra without the prior written consent of such member of the LW Group; or (ii) by any member of the LW Group without the prior written consent of ConAgra; provided , however , that any such Privileged Business Communications, whether arising prior to, or after the Distribution Date, with respect to any matter for which a Party hereto has an indemnification obligation hereunder, shall be subject to the sole control of such Party which shall be solely entitled to control the assertion or waiver of the privilege or protection, whether or not such Privileged Business Communications are in the possession of or under the control of such Party.
(c) Upon receipt by SpinCo or any of its Affiliates of any subpoena, discovery or other request from any third party that calls for or would be reasonably expected to call for the production or disclosure of Privileged Transaction
22
Communications or if SpinCo or any of its Affiliates obtains knowledge that any current or former employee of SpinCo receives any subpoena, discovery or other request from any third party that calls for or would be reasonably expected to call for the production or disclosure of Privileged Transaction Communications, SpinCo will promptly notify ConAgra of the existence of the request and will provide ConAgra a reasonable opportunity to assert any rights it may have under this Section 3.06 or otherwise to prevent the production or disclosure of such Privileged Transaction Communications. SpinCo will not, and will cause its Affiliates not to, produce or disclose to any third party any of the Privileged Transaction Communications under this Section 3.06 unless (i) ConAgra has provided its express written consent to such production or disclosure or (ii) a court of competent jurisdiction has entered an Order finding that the Privileged Transaction Communications are not entitled to protection from disclosure under any applicable privilege, doctrine or rule.
(d) Upon receipt by either Party or any of their respective Affiliates of any subpoena, discovery or other request from any third party that calls for or would be reasonably expected to call for the production or disclosure of Privileged Business Communications or if either Party obtains knowledge that any current or former employee of such Party receives any subpoena, discovery or other request from any third party that calls for or would be reasonably expected to call for the production or disclosure of Privileged Business Communications, such Party will promptly notify the other Party of the existence of the request and will provide such other Party a reasonable opportunity to assert any rights it may have under this Section 3.06 or otherwise to prevent the production or disclosure of such Privileged Business Communications. Neither Party will, and will cause its respective Affiliates not to, produce or disclose to any third party any of the Privileged Business Communications under this Section 3.06 unless (i) the other Party has provided its express written consent to such production or disclosure or (ii) a court of competent jurisdiction has entered an Order finding that the Privileged Business Communications are not entitled to protection from disclosure under any applicable privilege, doctrine or rule.
(e) Neither ConAgra nor SpinCo will, and will cause their respective Affiliates not to, produce or disclose to any third party any of the Privileged Business Communications under this Section 3.06 unless (A) the other Party has provided its express written consent to such production or disclosure or (B) a court of competent jurisdiction has entered an Order finding that the Privileged Business Communications are not entitled to protection from disclosure under any applicable privilege, doctrine or rule.
(f) The access to Information, witnesses and individuals being granted pursuant to Section 3.03 and the disclosure to ConAgra and SpinCo of Privileged Communications relating to the LW Business pursuant to this Agreement in connection with the transactions contemplated hereby will not be asserted by ConAgra or SpinCo to constitute, or otherwise deemed, a waiver of any privilege that has been or may be asserted under this Section 3.06 or otherwise. Nothing in this Agreement will operate to reduce, minimize or condition the rights granted to ConAgra and SpinCo in, or the obligations imposed upon ConAgra and SpinCo by, this Section 3.06 .
23
3.07 Names and Marks . (a) Except as provided in, contemplated by or required in connection with the provision of services or licenses pursuant to any Transaction Document or any Ancillary Agreement or as provided in this Section 3.07 , as of the Distribution (i) the LW Group shall not have any right to use or display the ConAgra Names and Marks in any form and (ii) the ConAgra Group shall not have any right to use or display the LW Names and Marks in any form; provided , however , that (A) to the extent such ConAgra Names and Marks were used or displayed by any member of the LW Group prior to the Distribution, the members of the LW Group shall, as soon as reasonably practicable, but in any event within 18 months after the Distribution, at their expense, cease all use or display of all ConAgra Names and Marks and shall remove any and all references to the ConAgra Names and Marks on LW Assets (including on business cards, stationary, commercial signs and similar identifiers), (B) to the extent such LW Names and Marks were used or displayed by any member of the ConAgra Group prior to the Distribution, the members of the ConAgra Group shall, as soon as reasonably practicable, but in any event within 18 months after the Distribution, at their expense, cease all use or display of all LW Names and Marks and shall remove any and all references to the LW Names and Marks on Excluded Assets, (C) the LW Group shall have the right to continue to use the ConAgra Names and Marks in perpetuity to the extent they are incorporated into historical memorabilia, awards, and the like prior to the Distribution, and (D) the ConAgra Group shall have the right to continue to use the LW Names and Marks in perpetuity to the extent they are incorporated into historical memorabilia, awards, and the like prior to the Distribution. In addition, each Party shall have the right to use the others respective Names and Marks in perpetuity to the extent they are incorporated into materials that speak generally to the history of the respective companies.
(b) Notwithstanding the foregoing, nothing contained in this Agreement will prevent any Party (or any member of its respective Group) from using the others Names and Marks in documents intended to be filed with Governmental Authorities, in materials intended for distribution to such Partys stockholders or in any other communication (including correspondence) in any medium that describes the current or former relationship between the Parties (or members of their respective Groups).
3.08 Joint Defense . In the event that both a member of the ConAgra Group and a member of the LW Group are defendants in the same Action, upon reasonable request of a member of either Group, the appropriate member or members of each such Group will enter into a written joint defense agreement in a form reasonably acceptable to such Parties.
IV. INDEMNIFICATION; LIMITATION OF LIABILITY
4.01 Remedies . (a) From and after the Distribution, the sole and exclusive remedy of a Party with respect to any and all claims relating to this Agreement, the LW Business, the LW Assets, the LW Liabilities, the Excluded Assets, the Excluded Liabilities, the LW Entities or the transactions contemplated by this Agreement will be pursuant to the indemnification provisions set forth in this Article IV or, in the case of indemnification claims for Taxes addressed in the Tax Matters Agreement, the Tax
24
Matters Agreement, or in the case of indemnification claims addressed in the Transition Services Agreement, the Transition Services Agreement, or in the case of indemnification claims addressed in the Reverse TSA, the Reverse TSA. In furtherance of the foregoing, each Party hereby waives, from and after the Distribution, any and all rights, claims and causes of action (other than pursuant to the indemnification provisions set forth in this Article IV , the Tax Matters Agreement, the Transition Services Agreement, or the Reverse TSA, and other than claims of, or causes of action arising from, fraud and except for seeking specific performance or other equitable relief to require a Party to perform its obligations under this Agreement to the extent permitted hereunder and except as otherwise provided in any other Transaction Document) that such Party or its Affiliates may have against the other Party or any of its Affiliates, or their respective directors, officers and employees, arising under or based upon any applicable Laws and arising out of the transactions contemplated by this Agreement, including pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq. and other Environmental Laws.
(b) Notwithstanding any other provision hereof, from and after the Distribution, the sole and exclusive remedy of the ConAgra Group and SpinCo with respect to any and all indemnification claims for Taxes addressed in the Tax Matters Agreement will be as set forth in the Tax Matters Agreement.
4.02 Releases . (a) SpinCo Release . Except as provided in Section 4.02(c) , effective as of the Business Transfer Time, SpinCo does hereby, for itself and each other member of the LW Group, and their respective successors and assigns, remise, release and forever discharge the ConAgra Indemnified Parties from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur at or before the Business Transfer Time or any conditions existing or alleged to have existed at or before the Business Transfer Time, including in connection with the transactions and all other activities to implement the LW Transfer.
(b) ConAgra Release . Except as provided in Section 4.02(c) , effective as of the Business Transfer Time, ConAgra does hereby, for itself and each other member of the ConAgra Group, and their respective successors and assigns, remise, release and forever discharge the LW Indemnified Parties from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur at or before the Business Transfer Time or any conditions existing or alleged to have existed at or before the Business Transfer Time, including in connection with the transactions and all other activities to implement any of the LW Transfer.
(c) No Impairment . Nothing contained in Section 4.02(a) or Section 4.02(b) will limit or otherwise affect any Partys rights or obligations pursuant to or contemplated by this Agreement or any other Transaction Document or any Ancillary Agreement, in each case in accordance with its terms.
25
(d) No Actions as to Released Claims . SpinCo will not, and will cause each of its respective Affiliates not to, make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against ConAgra or any member of the ConAgra Group, or any other Person released pursuant to Section 4.02(a) , with respect to any Liabilities released pursuant to Section 4.02(a) . ConAgra will not, and will cause each other member of the ConAgra Group not to, make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against SpinCo or any of its respective Affiliates, or any other Person released pursuant to Section 4.02(b) , with respect to any Liabilities released pursuant to Section 4.02(b) .
4.03 Indemnification . (a) Indemnification by SpinCo and the LW Group . Without limiting or otherwise affecting the indemnity provisions of any Transaction Document or Ancillary Agreement, effective as of the Distribution Date and subject to the limitations set forth in this Article IV , SpinCo hereby indemnifies ConAgra, its Affiliates and their respective Representatives (together, in each case, with their respective successors and permitted assigns, the ConAgra Indemnified Parties ) from and against, and agrees to hold them harmless from, any and all Damages arising out of, resulting from or related to (whether prior to or following the Distribution) any of the following items (without duplication):
(i) any breach by SpinCo or any other member of the LW Group of any covenant to be performed by such Persons pursuant to this Agreement or any Transaction Document (other than the Tax Matters Agreement and the Transition Services Agreement) or any Ancillary Agreement (other than the Reverse TSA) subsequent to the Business Transfer Time;
(ii) any LW Liability, including the failure of SpinCo or any other member of the LW Group or any other Person to pay, perform, fulfill, discharge and, to the extent applicable, comply with, in due course and in full, any such LW Liabilities; and
(iii) any matters for which indemnification is provided by SpinCo or any LW Entity under any Transaction Document (other than this Agreement) or any Ancillary Agreement (it being understood that the terms of such indemnification shall be governed by and subject to the terms of the applicable Transaction Document or the applicable Ancillary Agreement to the extent such terms differ from the provisions of this Article IV ).
26
(b) Indemnification by ConAgra . Without limiting or otherwise affecting the indemnity provisions of any Transaction Document or Ancillary Agreement, effective as of the Distribution Date and subject to the limitations set forth in this Article IV , ConAgra hereby indemnifies SpinCo, its Affiliates and their respective Representatives (together, in each case, with their respective successors and permitted assigns, the LW Indemnified Parties ) from and against, and agrees to hold them harmless from, any and all Damages arising out of, resulting from or related to (whether prior to or following the Distribution) any of the following items (without duplication):
(i) any breach by ConAgra or any other member of the ConAgra Group of any covenant to be performed by such Persons pursuant to this Agreement or any Transaction Document (other than the Tax Matters Agreement and the Transition Services Agreement) or any Ancillary Agreement (other than the Reverse TSA) subsequent to the Business Transfer Time;
(ii) any Excluded Liability, including the failure of ConAgra or any other member of the ConAgra Group or any other Person to pay, perform, fulfill, discharge, and, to the extent applicable, comply with, in due course and in full, such Excluded Liabilities; and
(iii) any matters for which indemnification is provided by ConAgra or any member of the ConAgra Group under any Transaction Document (other than this Agreement) or any Ancillary Agreement (it being understood that the terms of such indemnification shall be governed by and subject to the terms of the applicable Transaction Document or the applicable Ancillary Agreement to the extent such terms differ from the provisions of this Article IV ).
4.04 Calculation and Other Provisions Relating to Indemnity Payments . (a) Insurance . The amount of any Damages for which indemnification is provided under this Article IV will be net of any amounts actually recovered by the Indemnitee or its Affiliates under non-Affiliated third-party, non-captive insurance policies with respect to such Loss (less the Recovery Cost). If any Damages resulting in indemnification under Section 4.03 relates to a claim by an Indemnitee or its Affiliates that is covered by one or more non-Affiliated third-party, non-captive insurance policies held by the Indemnitee or its Affiliates, the Indemnitee will use and will cause its Affiliates to use Commercially Reasonable Efforts to pursue claims against the applicable insurers for coverage of such Damages under such policies. Without duplication of the first sentence of this Section 4.04(a) , the Indemnifying Party will pay directly, or promptly reimburse the Indemnitee for the costs of pursuing such claims (including, if necessary, the filing of coverage litigation). Any indemnity payment hereunder will initially be made without regard to this Section 4.04(a) , and if the Indemnitee or its Affiliates actually receive a full or partial recovery under such insurance policies following payment of indemnification by the Indemnifying Party in respect of such Damages, then the Indemnitee will refund amounts received from the Indemnifying Party up to the amount of indemnification actually received from the Indemnifying Party with respect to such Damages (less the cost to collect the proceeds of such insurance).
(b) Tax Benefits . If an indemnification obligation of any Indemnifying Party under this Article IV arises in respect of an adjustment that makes allowable to an Indemnitee any Tax Benefit which would not, but for such adjustment, be allowable, then any such indemnification obligation shall be an amount equal to (i) the amount otherwise due but for this Article IV , minus (ii) the reduction in actual cash Taxes payable by the Indemnitee in the Taxable year such indemnification obligation arises and the two Taxable years following such year, determined on a with and without basis.
27
4.05 Procedures for Defense, Settlement and Indemnification of Third-Party Claims . (a) Each Person seeking indemnification under this Article IV (the Indemnitee ) will give prompt written notice to the Person from whom indemnification is sought (the Indemnifying Party ) of the assertion of any claim or the commencement of any Action by any third party ( Third-Party Claim ); provided that the failure of the Indemnitee to give notice as provided in this Section 4.05(a) will not relieve any Indemnifying Party of its obligations under Section 4.03 , except to the extent that such failure actually prejudices the rights of any such Indemnifying Party. Such notice will set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnitee). Thereafter, the Indemnitee will deliver to the Indemnifying Party, as promptly as reasonably practicable following the Indemnitees receipt thereof, copies of all written notices and documents (including any court papers) received by the Indemnitee relating to the Third-Party Claim and the Indemnitee will provide the Indemnifying Party with such other Information with respect to any such Third-Party Claim reasonably requested by the Indemnifying Party. The Indemnifying Party will have the right, at its sole option and expense, to be represented by counsel of its choice and, subject to the limitations set forth in this Section 4.05 , to assume control of, and defend against, negotiate, settle (subject to Section 4.05(b) ) or otherwise deal with such Third-Party Claim, but the Indemnitee may nonetheless participate in the defense of such Third-Party Claim with its own counsel and at its own expense. In the case of any Third-Party Claim for which indemnification is sought, the Indemnifying Party will have the right, upon written notice to the Indemnitee within 30 days after receipt of the notice of such claim (the Indemnification Dispute Period ), to assume control of and defend against such Third-Party Claim. If the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with any Third-Party Claim, or fails to provide the Indemnitee with notice of its intent to assume control of and defend against any Third-Party Claim within the Indemnification Dispute Period, then the Indemnitee may defend against, negotiate, settle (subject to Section 4.05(b) ) or otherwise deal with such Third-Party Claim. If the Indemnifying Party will assume the defense of any Third-Party Claim pursuant to this Article IV , then the Indemnitee may participate, at his or its own expense, in the defense of such Third-Party Claim; provided that such Indemnitee will be entitled to participate in any such defense with separate counsel at the expense of the Indemnifying Party if (i) requested by the Indemnifying Party to participate or (ii) in the reasonable opinion of counsel to the Indemnifying Party, a material conflict exists between the Indemnitee and the Indemnifying Party that would make such separate representation advisable; provided , further that the Indemnifying Party will not be required to pay for more than one such counsel for all Indemnified Parties in connection with any Third-Party Claim. Notwithstanding the foregoing, participation by the Indemnitee will allow the Indemnitee to consult with independent counsel or advisors and to submit comments and questions, which the Indemnifying Party will consider or respond to in good faith but the Indemnifying Party will not be obligated to act upon and, subject to the terms of this Article IV , such comments or questions will not alter or limit the Indemnifying Partys obligations as set forth in this Agreement.
(b) Notwithstanding anything in this Section 4.05 to the contrary, neither the Indemnifying Party nor the Indemnitee will, without the written consent of the
28
other party, settle or compromise any Third-Party Claim or permit a default or consent to entry of any judgment. Notwithstanding the foregoing, consent of the Indemnitee will not be required for any such settlement if (i) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, (ii) such settlement does not permit any order, injunction or other equitable relief to be entered, directly or indirectly, against the Indemnitee and (iii) such settlement includes an unconditional release of such Indemnitee from all liability on claims that are the subject matter of such Third-Party Claim and does not include any statement as to or any admission of fault, culpability or failure to act by or on behalf of any Indemnitee. If the Indemnifying Party makes any payment on any Third-Party Claim or in respect of any Environmental Claim, then the Indemnifying Party will be subrogated, to the extent of such payment, to all rights and remedies of the Indemnitee to any insurance benefits or other claims of the Indemnitee with respect to such Third-Party Claim or Environmental Claim, as applicable.
(c) After any decision, judgment or award shall have been rendered by a Governmental Authority of competent jurisdiction, or a settlement shall have been consummated (in accordance with this Article IV ), or the Indemnitee and the Indemnifying Party shall have arrived at a mutually binding agreement with respect to a Third-Party Claim hereunder, the Indemnitee will forward to the Indemnifying Party notice of any sums due and owing by the Indemnifying Party pursuant to this Agreement with respect to such matter.
(d) Each party will cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third-Party Claim and will furnish or cause to be furnished such records, Information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.
(e) Notwithstanding the foregoing, this Section 4.05 and the following Section 4.06 will not apply to indemnification for related to Tax matters. The procedures for such indemnification will be governed by the Tax Matters Agreement.
4.06 Direct Claim Procedures . (a) In the event an Indemnitee has a claim for indemnity under Section 4.03 against an Indemnifying Party that does not involve a Third-Party Claim, the Indemnitee agrees to give prompt notice in writing, and as promptly as practicable, of such claim to the Indemnifying Party, which notice will in no event be delivered to the Indemnifying Party later than 60 days after the Indemnitee first learns of the facts on which such claim is based (such 60-day period, the Notice Period ). Such notice will set forth in reasonable detail such claim and the basis for indemnification and the amount of such damages incurred or that such Indemnitee reasonably estimates in good faith is likely to be incurred in connection with such claim (all taking into account the information then in the possession or under the control of the Indemnitee). The failure to notify the Indemnifying Party as promptly as practicable within the Notice Period will not relieve the Indemnifying Party of its obligations hereunder, except to the extent that such failure shall have actually prejudiced the Indemnifying Party (in which case relieved only to the extent of such prejudice), and in
29
any event, the Indemnifying Party will have no indemnification obligation in respect of any claim for which notice is delivered following expiration of the applicable Notice Period for such claim.
(b) If the Indemnifying Party notifies the Indemnitee that it does not dispute its liability to the Indemnitee with respect to any claim other than a Third-Party Claim or fails to notify the Indemnitee within the Indemnification Dispute Period, the damages arising from any such claim will be conclusively deemed a liability of the Indemnifying Party and the Indemnifying Party will pay the amount of such damages to the Indemnitee on demand following the final determination thereof. If the Indemnifying Party has timely disputed its liability with respect to such claim, the Indemnifying Party and the Indemnitee will proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, either party may seek a resolution of such dispute by litigation in a court of competent jurisdiction pursuant to Section 6.05 .
4.07 Additional Matters . (a) Cooperation in Defense and Settlement . With respect to any Third-Party Claim for which SpinCo, on the one hand, and ConAgra, on the other hand, may have Liability under this Agreement or any of the other Transaction Documents or any of the Ancillary Agreements, the Parties agree to cooperate reasonably and maintain a joint defense (in a manner that is intended to the maximum extent reasonably possible to preserve the attorney-client privilege, joint defense or other privilege or doctrine with respect thereto) so as to minimize such Liabilities and defense costs associated therewith. The Party that is not responsible for managing the defense of such Third-Party Claims will, upon reasonable request, be consulted with respect to significant matters relating thereto and may retain counsel to monitor or assist in the defense of such claims at its own cost.
(b) Certain Actions . Notwithstanding anything to the contrary set forth in this Article IV , ConAgra may elect to have exclusive authority and control over the investigation, prosecution, defense and appeal of any and all Actions pending at the Business Transfer Time which relate to or arise out of the LW Business, the LW Assets or the LW Liabilities and as to which a member of the ConAgra Group is also a plaintiff or named as a target or defendant thereunder (but excluding any such Actions which solely relate to or solely arise in connection with the LW Business, the LW Assets or the LW Liabilities); provided , however , that, (i) ConAgra defends or prosecutes, as applicable, such Actions in good faith, (ii) ConAgra reasonably consults with SpinCo on a regular basis with respect to strategy and developments with respect to any such Action, (iii) SpinCo will have the right to participate in (but not control) the defense or prosecution, as applicable, of such Action, and (iv) ConAgra must obtain the written consent of SpinCo, such consent not to be unreasonably withheld, conditioned or delayed, to settle or compromise or consent to the entry of judgment with respect to such Action if ConAgra is a defendant and such settlement, consent or judgment would require SpinCo to abandon its rights, change its business practices or incur any Liabilities with respect thereto or if ConAgra is a plaintiff and the resolution involves a judgment that is less than was being sought in respect of the LW Business. After any such compromise, settlement, consent to entry of judgment or entry of judgment, ConAgra and SpinCo will agree upon a reasonable allocation to SpinCo and SpinCo will
30
be responsible for or receive, as the case may be, SpinCos proportionate share of any such compromise, settlement, consent or judgment attributable to the LW Business, the LW Assets or the LW Liabilities, including its proportionate share of the reasonable costs and expenses associated with defending same.
(c) Reasonable Minimization of Losses . To the extent any remedial, corrective or other ameliorative action is required to be taken by an Indemnitee in respect of a matter that is the subject of an indemnification claim hereunder, the Indemnitee will only be entitled for indemnification in respect of those actions that would be necessary to perform the minimum necessary remediation, correction or amelioration to remedy the breach or Liability, as the case may be, at the lowest reasonable cost.
(d) Substitution . In the event of an Action that involves solely matters that are indemnifiable and in which the Indemnifying Party is not a named defendant, if either the Indemnitee or the Indemnifying Party so requests, the Parties will endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the rights and obligations of the Parties regarding indemnification and the management of the defense of claims as set forth in this Article IV will not be affected.
(e) Subrogation . In the event of payment by or on behalf of any Indemnifying Party to or on behalf of any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party will be subrogated to and will stand in the place of such Indemnitee, in whole or in part based upon whether the Indemnifying Party has paid all or only part of the Indemnitees Liability, as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee will cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.
V. DISPUTE RESOLUTION
5.01 Dispute Process . The Parties will use commercially reasonable efforts to resolve expeditiously and on a mutually acceptable negotiated basis any dispute or disagreement between the Parties arising out of or relating to this Agreement or any Transaction Document or Ancillary Agreement (other than a third party claim) (a Dispute ) exclusively (except as otherwise expressly provided in this Agreement) as follows: (a) first, by engaging in good faith negotiations in accordance with the procedures set forth in Schedule 5.01 ; and (b) then, if the the Parties are unable to resolve the Dispute through the process of good faith negotiations contemplated in Schedule 5.01 , or if a Party reasonably concludes that the other Party is not willing to negotiate as contemplated by clause (a) of this Section 5.01 and provided in Schedule 5.01 , the Dispute will be submitted to an arbitration in accordance with Schedule 5.01 . The initiation of the alternative dispute resolution process hereunder will toll the applicable statute of limitations for the duration of any such proceedings.
31
VI. MISCELLANEOUS
6.01 Survival of Covenants . None of the covenants or agreements contained in this Agreement shall survive the Distribution Date, other than those which by their terms contemplate performance after the Distribution Date and such surviving covenants and agreements shall survive the Distribution Date only until the expiration of the term of the undertaking set forth in such covenants and agreements; provided , however , that any claim made with reasonable specificity by the party seeking to be indemnified within the time periods set forth in this Section 6.01 shall survive until such claim is finally resolved.
6.02 Termination . This Agreement and any other Transaction Document, Ancillary Agreement or Transfer Document may be terminated by the ConAgra Board in its sole and absolute discretion at any time prior to the Distribution. In the event of any termination of this Agreement prior to the Distribution, no Party (or any member of its Group or any of its or their respective directors or officers) will have any Liability or further obligation to any other Party (or any member of its Group) with respect to this Agreement or such Transaction Document, Ancillary Agreement or Transfer Document.
6.03 Expenses . Except as otherwise provided in this Agreement or any of the other Transaction Documents or any of the Ancillary Agreements, all fees and expenses incurred in connection with the transactions contemplated hereby and thereby will be paid by the Party incurring such fees or expenses.
6.04 Entire Agreement . This Agreement, the other Transaction Documents, the Ancillary Agreements, including any related annexes, schedules and exhibits, as well as any other agreements and documents referred to herein and therein, together constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior negotiations, agreements and understandings of the Parties of any nature, whether oral or written, with respect to such subject matter. If there is a conflict between any provision of this Agreement and a provision of any other Transaction Document or a provision of any Ancillary Agreement, the provision of this Agreement will control unless specifically provided otherwise in this Agreement.
6.05 Governing Law . This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby will be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to the conflict of Laws provisions thereof that would cause the Laws of another state to apply.
32
6.06 Notices . All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to have been duly given (a) upon transmission, if sent by email with confirmation of receipt, (b) when delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an international courier service and, in each case, addressed to a Party at the following address for such Party:
(i) | if to ConAgra: |
ConAgra Foods, Inc.
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Attention: Colleen Batcheler
Email: colleen.batcheler@conagra.com
(ii) | If to SpinCo: |
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk J. Spytek
Email: eryk.spytek@conagra.com
or to such other address(es) as may be furnished in writing by any such Party to the other Party in accordance with the provisions of this Section 6.06 .
6.07 Amendments and Waivers . (a) This Agreement may be amended and any provision of this Agreement may be waived; provided , however , that any such amendment or waiver, as the case may be, is in writing and signed, in the case of an amendment, by the Parties or, in the case of a waiver, by the Party against whom the waiver is to be effective. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.
(b) No delay or failure in exercising any right, power or remedy hereunder will affect or operate as a waiver thereof; nor will any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that any Party would otherwise have.
6.08 No Third-Party Beneficiaries . This Agreement is solely for the benefit of the Parties and does not confer on third parties (including any employees of any member of the ConAgra Group or the LW Group) any remedy, claim, reimbursement, claim of action or other right in addition to those existing without reference to this Agreement.
6.09 Assignability . No Party may assign its rights or delegate its duties under this Agreement without the written consent of the other Party, except that a Party may assign its rights or delegate its duties under this Agreement to a member of its Group, provided that (a) such Person agrees in writing to be bound by the terms and conditions contained in this Agreement and (b) such assignment or delegation will not relieve any Party of its indemnification obligations or other obligations under this Agreement. Any attempted assignment or delegation in contravention of the foregoing will be void.
33
6.10 Tax Matters; Priority of Agreements . Except as otherwise expressly provided herein, this Agreement will not govern Tax matters (including any administrative, procedural and related matters thereto), which will be exclusively governed by the Tax Matters Agreement. In the case of any conflict between this Agreement and the Tax Matters Agreement, in relation to any matters addressed by the Tax Matters Agreement, the Tax Matters Agreement will prevail.
6.11 Construction . The descriptive headings herein are inserted for convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement or the Schedules will include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs will include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. References in this Agreement to any document, instrument or agreement (including this Agreement) includes and incorporates all exhibits, disclosure letters, schedules and other attachments thereto. Unless the context otherwise requires, any references to an Exhibit, Section or Article will be to an Exhibit, Section or Article to or of this Agreement, and will be deemed to include any provisions or matters set forth in any corresponding schedule or section of the Schedules. The use of the words include or including in this Agreement or the Schedules will be deemed to be followed by the words without limitation. The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days mean calendar days unless specified as Business Days. References to statutes will include all regulations promulgated thereunder, and references to statutes or regulations will be construed to include all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation as of the date hereof. The Parties have participated jointly in the negotiation and drafting of this Agreement, the Transaction Documents and the Ancillary Agreements. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement or any Transaction Document or any Ancillary Agreement, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion, the Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
6.12 Severability . The Parties agree that (a) the provisions of this Agreement will be severable in the event that for any reason whatsoever any of the provisions hereof are invalid, void or otherwise unenforceable, (b) any such invalid, void or otherwise unenforceable provisions will be replaced by other provisions which are as
34
similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (c) the remaining provisions will remain valid and enforceable to the fullest extent permitted by applicable Law.
6.13 Counterparts . This Agreement may be executed in multiple counterparts (any one of which need not contain the signatures of more than one Party), each of which will be deemed to be an original but all of which taken together will constitute one and the same agreement. This Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party, the other Party will re-execute original forms thereof and deliver them to the requesting Party.
6.14 Specific Performance . The Parties agree that irreparable damage would occur if any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement without proof of actual damages, this being in addition to any other remedy to which any Party is entitled at Law or in equity. Each Party further agrees that no other Party or any other Person will be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 6.14 , and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument and will not contest the appropriateness of specific performance as a remedy.
6.15 Conflict with Another Transaction Document or Ancillary Agreement . Other than with respect to Tax matters and any matters addressed by the Tax Matters Agreement, if there is any conflict between this Agreement and another Transaction Document, each of this Agreement and the other Transaction Document is to be interpreted and construed, if possible, so as to avoid or minimize such conflict, but, to the extent (and only to the extent) of such conflict, this Agreement shall prevail and control. If there is any conflict between any Transaction Document and any Ancillary Agreement, each of such Transaction Document and such Ancillary Agreement is to be interpreted and construed, if possible, so as to avoid or minimize such conflict, but, to the extent (and only to the extent) of such conflict, the Transaction Document shall prevail and control.
VII. DEFINITIONS
For purposes of this Agreement, the following terms, when utilized in an initial capitalized form, will have the following meanings:
Action means any demand, charge, claim, action, suit, counter suit, arbitration, mediation, hearing, inquiry, proceeding, audit, review, complaint, litigation or investigation, sanction, summons, demand, subpoena, examination, citation, audit, review or proceeding of any nature whether administrative, civil, criminal, regulatory or otherwise, by or before any Governmental Authority.
35
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such other Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made. For purposes of this definition, the term control (including, with correlative meanings, the terms controlled by and under common control with), as used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise. For the avoidance of doubt, (a) Affiliates of ConAgra will include SpinCo and the LW Entities prior to the Distribution, and (b) Affiliates of SpinCo will include the LW Entities after the Distribution.
Affiliated Transferor means any Affiliate of ConAgra (other than a member of the LW Group) that either (i) owns, licenses or leases any of the assets that constitute LW Assets or (ii) is liable for any of the LW Liabilities.
Agreement has the meaning set forth in the preamble.
Alexia Trademark License Agreement means the Alexia Trademark License Agreement, dated as of the date of this Agreement, between ConAgra Foods RDM, Inc., a wholly owned subsidiary of ConAgra, and ConAgra Foods Lamb Weston, Inc., a wholly owned subsidiary of ConAgra that will become, pursuant to the LW Transfer, a wholly owned subsidiary of SpinCo.
Ancillary Agreements means the Lease, the Option and the Reverse TSA.
Assets means assets, properties and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.
Business Day means any day that is not a Saturday, a Sunday or other day that is a statutory holiday under the federal Laws of the United States.
Business Transfer Time has the meaning set forth in Section 1.01(b) .
Code means the Internal Revenue Code of 1986, as amended.
Commercially Reasonable Efforts means, with respect to the efforts to be expended by a Party with respect to any objective under this Agreement, reasonable, diligent good faith efforts to accomplish such objective as such Party would normally use to accomplish a similar objective as expeditiously as reasonably possible under similar circumstances exercising reasonable business judgment, it being understood and agreed that such efforts will include the exertion of efforts and utilization of
36
resources that would be used by such Party in support of one of its own wholly owned businesses. Commercially Reasonable Efforts will not require a Party (a) to make payments to unaffiliated third parties (except as set forth in this Agreement), to incur non- de minimis Liabilities to unaffiliated third parties or to grant any non- de minimis concessions or accommodations unless the other Party agrees to reimburse and make whole such Party to its reasonable satisfaction for such Liabilities, concessions or accommodations requested to be made by the other Party (such reimbursement and make whole to be made promptly after the determination thereof following the Distribution or, with respect to items incurred after the Distribution, promptly thereafter), (b) to violate any Law, or (c) to initiate any litigation or arbitration.
Commission means the Securities and Exchange Commission.
ConAgra has the meaning set forth in the preamble.
ConAgra Board has the meaning set forth in the recitals.
ConAgra Common Stock means the common stock, par value $5.00 per share, of ConAgra.
ConAgra Group means ConAgra and each of its Subsidiaries, but excluding any member of the LW Group.
ConAgra Indemnified Parties has the meaning set forth in Section 4.03(a) .
ConAgra Names and Marks means the Names and Marks owned, held or licensed by ConAgra or any of its Subsidiaries immediately prior to the Distribution, including those listed on Schedule 7.01 , other than the LW Names and Marks, either alone or in combination with other words or elements, and all Names and Marks confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.
ConAgra Plans has the meaning set forth in the Employee Matters Agreement.
ConAgra Portion has the meaning set forth in Section 1.08(b) .
ConAgra Support Arrangements has the meaning set forth in Section 1.07(c) .
ConAgra Transfer Documents has the meaning set forth in Section 1.09 .
Confidential Information has the meaning set forth in Section 3.04(a) .
Consents means any consents, waivers or approvals from, or notification requirements to, or authorizations by, any third parties.
Contracts means any contract, agreement, lease, sublease, license, sales order, purchase order, loan, credit agreement, bond, debenture, note, mortgage, indenture, guarantee, undertaking, instrument, arrangement, course of dealing, understanding or other commitment, whether written or oral, that is binding on any Person or any part of its property under applicable Law.
37
Convey has the meaning set forth in Section 1.02(a) . Variants of this term such as Conveyance will have correlative meanings.
Copyrights has the meaning set forth in the definition of Intellectual Property.
Damages means all assessments, losses, damages, costs, expenses, Liabilities, judgments, awards, fines, sanctions, penalties, charges and amounts paid in settlement, including reasonable costs, fees and expenses of attorneys, accountants and other agents or representatives of such Person, but specifically excluding (i) any lost profits or opportunity costs, or any special, punitive or consequential damages (except in any such case to the extent assessed in connection with a third party claim or except to the extent such damages are the reasonable and foreseeable result of the matter in question), and (ii) any amount based on or taking into account the use of any LW Asset other than its use as of the Distribution Date.
Debt Exchange means the distribution of SpinCo Securities issued to ConAgra pursuant to the Special SpinCo Securities Issuance in exchange for outstanding indebtedness of ConAgra.
Designs has the meaning set forth in the definition of Intellectual Property.
Dispute has the meaning set forth in Section 5.01 .
Distribution has the meaning set forth in the recitals.
Distribution Date means, the date selected by the ConAgra Board or its designee for the distribution of SpinCo Common Stock to ConAgras stockholders in connection with the Distribution.
Distribution Effective Time means the time established by ConAgra as the effective time of the Distribution, New York time, on the Distribution Date.
Distribution Ratio means the number of shares of SpinCo Common Stock to be distributed in respect of each share of ConAgra Common Stock in the Distribution, which ratio will be determined by the ConAgra Board prior to the Record Date.
Domain Name has the meaning set forth in the definition of Intellectual Property.
Employee Matters Agreement means the Employee Matters Agreement, dated as of the date hereof, between ConAgra and SpinCo, as amended or modified from time to time in accordance with its terms.
Environmental Claim means any Action by any Person alleging or that may reasonably be expected to result in Liability (including Liability for investigatory costs, cleanup costs, governmental oversight or response costs, natural resource damages, fines or penalties) for any Environmental Conditions or any noncompliance with or obligations under any Environmental Laws.
38
Environmental Conditions means the presence in the environment, including the soil, groundwater, surface water, ambient air or indoor air, or in any building materials, of any Hazardous Materials at a level at or exceeding the applicable standard or threshold under applicable Environmental Law or that otherwise requires investigation, remediation or other actions (including investigation, study, health or risk assessment, monitoring, removal, treatment, transport or response action) under any applicable Environmental Laws.
Environmental Laws means all Laws of any Governmental Authority, including common law, that relate to the protection of the environment and natural resources (including ambient or indoor air, surface water, ground water, land surface or subsurface strata) or the effect of the environment or Hazardous Materials on human health and safety, including Laws or any other binding legal obligations in effect now or in the future relating to the Release of Hazardous Materials, or otherwise relating to the generation, manufacture, sale, distribution, import, labeling, treatment, storage, disposal, transport or handling of Hazardous Materials, or to the exposure of any individual to any Hazardous Materials.
Exchange Act means the Securities Exchange Act of 1934.
Exchange Agent has the meaning set forth in Section 2.03(a) .
Excluded Assets has the meaning set forth in Section 1.05(b) .
Excluded IP Assets means (a) all UPC, EAN codes, IP addresses and any other codes or numbers that contain ConAgra identifiers and (b) the Intellectual Property set forth on Schedule 1.05(b)(ii) .
Excluded Liabilities has the meaning set forth in Section 1.06(b) .
Form 10 means the registration statement on Form 10 filed by SpinCo with the Commission to effect the registration of SpinCo Common Stock pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time, including any amendment or supplement thereto.
Governmental Approvals means any notices, reports or other filings to be made to, or any Consents, registrations, permits, approvals, Orders, clearances, variances, terminations or expirations of waiting periods or authorizations to be obtained from, any Governmental Authority.
Governmental Authority means any federal, state, local, provincial, foreign or international court, tribunal, judicial or arbitral body, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority or any national securities exchange.
39
Governmental Permits means any licenses, registrations, permits, Orders, clearances, or other authorizations of any Governmental Authority.
Group means the ConAgra Group or the LW Group, as the context requires.
Hazardous Materials means chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and biological materials, hazardous substances, asbestos and asbestos containing materials, petroleum and petroleum products or any fraction thereof, or any other substance or material, in each case, that is defined by, regulated by, or may form the basis for liability under any Environmental Laws.
Indemnification Dispute Period has the meaning set forth in Section 4.05(a) .
Indemnifying Party has the meaning set forth in Section 4.05(a) .
Indemnitee has the meaning set forth in Section 4.05(a) .
Information means information in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, forecasts, budgets, reports, records, books, Contracts, instruments, surveys, discoveries, ideas, concepts, know-how, recipes, techniques, designs, specifications, processes, procedures, policies, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other Software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos, manuals and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data, but in any case excluding back-up tapes.
Information Statement means the Information Statement, attached as an exhibit to the Form 10, to be sent or otherwise made available to each of ConAgras stockholders in connection with the Distribution, as such Information Statement may be amended or supplemented from time to time.
Intellectual Property means, in any and all jurisdictions throughout the world, all (a) patents, patent applications, inventors certificates, utility models, statutory invention registrations, and other indicia of ownership of an invention, discovery or improvement issued by any Governmental Authority, including reissues, divisionals, continuations, continuations-in-part, extensions, reexaminations and other pre-grant and post-grant forms of the foregoing (collectively, Patents ), (b) trademarks, service marks, trade dress, slogans, logos, symbols, trade names, brand names and other identifiers of source or goodwill recognized by any Governmental Authority, including registrations and applications for registration thereof and including the goodwill symbolized thereby or associated therewith (collectively, Trademarks ), and Internet domain names and associated uniform resource locators (collectively, Domain Names ), (c) copyrights, whether in published and unpublished works of authorship, registrations, applications, renewals and extensions therefor, mask works, and any and all similar rights recognized in a work of authorship by a Governmental Authority (collectively, Copyrights ), (d) any
40
trade secret rights in any inventions, discoveries, improvements, trade secrets and all other confidential or proprietary Information (including know-how, data, formulas, processes and procedures, research records, records of inventions, test information, and market surveys), and all rights to limit the use or disclosure thereof (collectively, Trade Secrets ), (e) registered and unregistered design rights (collectively, Designs ), (f) rights of privacy and publicity, and (g) any and all other intellectual or industrial property rights recognized by any Governmental Authority under the Laws of any country throughout the world.
Intended Tax-Free Treatment means the qualification of (i) the LW Transfer, together with the Special Cash Payment, the Special SpinCo Securities Issuance, the Debt Exchange and the Distribution as a reorganization described in Section 368(a)(1)(D) of the Code and of each of ConAgra and SpinCo as a party to the reorganization within the meaning of Section 368(b) of the Code, (ii) the Distribution, as such, as a distribution of SpinCo Common Stock to ConAgras stockholders pursuant to Section 355 of the Code, (iii) the Special Cash Payment as money distributed to ConAgra creditors or shareholders in connection with the reorganization for purposes of Section 361(b) of the Code, (iv) the Special SpinCo Securities Issuance as a tax-free issuance under Section 361(a) of the Code and the Debt Exchange as a tax-free exchange to ConAgra within the meaning of Section 361(c) of the Code and (v) the transactions described on Schedule A to the Tax Matters Agreement as being free from Tax to the extent set forth therein.
Intercompany Accounts has the meaning set forth in Section 1.07(b) .
Internal Restructuring means the internal reorganization of the LW Business, as set forth in Exhibit A .
Joint Venture Interests means the equity interests in the LW Joint Ventures held by any member of the LW Group or, prior to the Distribution, any member of the ConAgra Group.
Lamb Weston has the meaning set forth in the preamble.
Law means any statute, law, ordinance, regulation, rule, code or other requirement of, or Order or Governmental Permit issued by, a Governmental Authority.
Lease means that certain Lease, made as of the 24th day of October, 2016, between ConAgra Limited/ConAgra Limitée (the Landlord) and Lamb Weston Canada ULC (the Tenant).
Liabilities means all debts, liabilities, guarantees, assurances and commitments, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including whether arising out of any Contract or tort based on negligence, strict liability or relating to Taxes payable by a Person in connection with compensatory payments to employees or independent contractors) and whether or not the same would be required by generally accepted principles and accounting policies to be reflected in financial statements or disclosed in the notes thereto.
41
LW Assets has the meaning set forth in Section 1.05(a) .
LW Books and Records has the meaning set forth in Section 1.05(a)(viii) .
LW Business means the ConAgra Groups and the LW Groups direct or indirect business of researching, developing and cultivating potatoes and sweet potatoes, and manufacturing, marketing, distributing and selling potatoes and sweet potatoes, appetizers and vegetable products, primarily in frozen form, through the wholesale, commercial and retail channels under the Lamb Weston brand, Alexia brand and the other brands set forth on Schedule 7.02 , and Lamb Weston products made in support of customer-owned brands and customer commercial food service operations, in each case, produced in the facilities set forth on Schedule 7.03 . In construing the scope of the term LW Business, LW Business will not include the LW Joint Ventures or any Assets or Liabilities of the LW Joint Ventures.
LW Contracts means all contracts, commitments, leases and other agreements to which a member of the ConAgra Group or the LW Group is a party and that relate exclusively to the LW Business.
LW Employee has the meaning set forth in the Employee Matters Agreement.
LW Entities has the meaning set forth in Section 1.05(a)(iv) .
LW Equity Interests has the meaning set forth in Section 1.05(a)(iv) .
LW Facilities has the meaning set forth in Section 1.05(a)(iii) .
LW Group means SpinCo and each of its Subsidiaries, which will be deemed to include the LW Entities. For the avoidance of doubt, the LW Joint Ventures will not be deemed to be members of the LW Group.
LW Indemnified Parties has the meaning set forth in Section 4.03(b) .
LW Insureds has the meaning set forth in Section 3.05 .
LW Inventory has the meaning set forth in Section 1.05(a)(ii) .
LW IP Assets has the meaning set forth in Section 1.05(a)(vii) .
LW Joint Ventures means, collectively, the joint ventures set forth on Schedule 7.04 .
LW Liabilities has the meaning set forth in Section 1.06(a) .
LW Names and Marks means the Names and Marks owned, held or licensed by ConAgra or any of its Subsidiaries immediately prior to the Distribution and exclusively used or held for exclusive use in the LW Business, including those listed on Schedule 7.05 , either alone or in combination with other words or elements, and all Names and Marks that are confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.
42
LW Portion has the meaning set forth in Section 1.08(b) .
LW Software has the meaning set forth in Section 1.05(a)(ix) .
LW Transfer has the meaning set forth in the recitals.
LW Transfer Documents has the meaning set forth in Section 1.10 .
Names and Marks means Trademarks, monograms, Domain Names and other source or business identifiers.
Notice Period has the meaning set forth in Section 4.06(a) .
NYSE means the New York Stock Exchange.
Option means that certain Option to Purchase dated as of the 24th day of October, 2016, between ConAgra Limited/ConAgra Limitée (the Optionor) and Lamb Weston Canada ULC (the Optionee).
Order means any orders, judgments, injunctions, awards, decrees, writs or other legally enforceable requirement handed down, adopted or imposed by, including any consent decree, settlement agreement or similar written agreement with, any Governmental Authority.
Parties has the meaning set forth in the preamble.
Patents has the meaning set forth in the definition of Intellectual Property.
Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or other entity or organization or a Governmental Authority.
Pre-Distribution Occurrences has the meaning set forth in Section 3.05 .
Privileged Business Communications has the meaning set forth in Section 3.06(b) .
Privileged Communications has the meaning set forth in Section 3.06(a) .
Privileged Transaction Communications has the meaning set forth in Section 3.06(a) .
Real Property Interests means all interests in real property, including improvements, structures and fixtures located thereon, of whatever nature, including easements and mineral, oil and gas rights, whether as owner or holder of a Security Interest, lessor, sublessor, lessee, sublessee or otherwise.
43
Record Date means the close of business on the date to be determined by the ConAgra Board as the record date for determining stockholders of ConAgra entitled to receive shares of SpinCo Common Stock in the Distribution.
Record Holders means the holders of record of ConAgra Common Stock as of the close of business on the Record Date.
Recovery Costs has the meaning set forth in Section 3.05 .
Registered Intellectual Property means any and all Copyright registrations or applications for registration, Design registrations or applications for registration, Patents, Trademark registrations or applications for registration, and Domain Name registrations.
Release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into surface water, groundwater, land surface or subsurface strata or ambient air (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials).
Representatives means with respect to any Person, such Persons and any of its Subsidiaries officers, employees, agents, advisors, directors, consultants and other representatives.
Retained Business means any business now, previously or hereafter conducted by ConAgra or any of its Subsidiaries other than the LW Business.
Retained Policies has the meaning set forth in Section 3.05 .
Retained Policy Claims has the meaning set forth in Section 3.05 .
Reverse TSA means that certain Reverse Transition Services Agreement entered into by ConAgra and SpinCo on the date hereof, as amended or modified from time to time in accordance with its terms, pursuant to which SpinCo through one or more of its Subsidiaries will provide certain employee services to ConAgra.
Securities Act means the Securities Act of 1933.
Security Interest means, whether arising under any Contract or otherwise, any mortgage, security interest, pledge, lien, charge, claim, option to purchase or lease, indenture, right to acquire, right of first offer or refusal, deed of trust, licenses to third parties, leases to third parties, security agreements, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, title defect, restriction on transfer or other encumbrance and other restrictions, conditions or limitations on the ownership, possession or use of any real, personal, tangible or intangible property.
Segregated Account has the meaning set forth in Section 1.11(b) .
44
Separation has the meaning set forth in the recitals.
Shared Business Contracts means any Contract of any member of either Group that (a) relates to both the LW Business and the Retained Business and (b) is set forth on Schedule 7.06 .
Shared Information means (a) all Information provided by any member of the LW Group to a member of the ConAgra Group prior to the Business Transfer Time, (b) any Information in the possession or under the control of such respective Group that relates to the operation of the LW Business and the LW Joint Ventures prior to the Distribution and that the requesting Party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities or Tax Laws) by a Governmental Authority having jurisdiction over the requesting Party, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation or other similar requirements, in each case other than claims or allegations that one Party to this Agreement has against the other, (iii) subject to the foregoing clause (ii) above, to comply with its obligations under this Agreement or any other Transaction Document or any Ancillary Agreement, or (iv) to the extent such Information and cooperation is necessary to comply with such reporting, filing and disclosure obligations, for the preparation of financial statements or completing an audit, and as reasonably necessary to conduct the ongoing Retained Business, the LW Business or the LW Joint Ventures, as the case may be, and (c) any Information that is reasonably necessary for the conduct of the LW Business or the LW Joint Ventures (except for any information relating to performance ratings or assessments of employees of the ConAgra Group and LW Employees (including performance history, reports prepared in connection with bonus plan participation and related data, other than individual bonus opportunities based on target bonus as a percentage of base salary)).
Software means any and all (i) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, (iv) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (v) specifications and documentation, including user manuals and other training documentation, relating to any of the foregoing.
Special Cash Amount has the meaning set forth in Section 1.11(a) .
Special Cash Payment has the meaning set forth in Section 1.11(a) .
Special SpinCo Securities Issuance has the meaning set forth in Section 1.11(a)(iii) .
SpinCo has the meaning set forth in the preamble.
SpinCo Common Stock has the meaning set forth in the recitals.
45
SpinCo Securities means notes issued by SpinCo to ConAgra with terms as set forth on Schedule 7.07 .
Stock Issuance has the meaning set forth in Section 1.11(a)(i) .
Subsidiary of any Person means another Person (other than a natural Person), of which such Person owns directly or indirectly (a) an aggregate amount of the voting securities, other voting ownership or voting partnership interests to elect a majority of the Board of Directors or other governing body or (b) if there are no such voting interests, 51% or more of the equity interests therein.
Tax has the meaning set forth in the Tax Matters Agreement.
Tax Benefit has the meaning set forth in the Tax Matters Agreement.
Tax Matters Agreement means the Tax Matters Agreement entered into by ConAgra and SpinCo on the date hereof, as amended or modified from time to time in accordance with its terms.
Third-Party Claim has the meaning set forth in Section 4.05(a) .
Trade Secrets has the meaning set forth in the definition of Intellectual Property.
Trademarks has the meaning set forth in the definition of Intellectual Property.
Transaction Documents means, collectively, this Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement, the Alexia Trademark License Agreement and any other documents required to be delivered by a Person under any of the foregoing documents.
Transfer Documents has the meaning set forth in Section 1.10 .
Transferred Employees means employees of any member of the LW Group and any employees of ConAgra or its Subsidiaries whose employment transfers to the LW Group on or after the Business Transfer Time.
Transition Services Agreement means the Transition Services Agreement, dated as of the date hereof, between ConAgra and SpinCo, as amended or modified from time to time in accordance with its terms.
[Signature Page Follows]
46
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day and year first above written.
CONAGRA FOODS, INC. | ||
By: | /s/ Colleen R. Batcheler | |
Name: | Colleen R. Batcheler | |
Title: | Executive Vice President, General Counsel and Corporate Secretary |
LAMB WESTON HOLDINGS, INC. | ||
By: | /s/ Thomas P. Werner | |
Name: | Thomas P. Werner | |
Title: | President and Chief Executive Officer |
Exhibit 3.1
LAMB WESTON HOLDINGS, INC.
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Lamb Weston Holdings, Inc. , a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the Corporation ), hereby certifies as follows:
1. The name of the Corporation is Lamb Weston Holdings, Inc. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 5, 2016.
2. The Amended and Restated Certificate of Incorporation of the Corporation, in the form attached hereto as Exhibit A , was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the DGCL ), and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the DGCL.
3. Effective as of November 8, 2016, the text of the Certificate of Incorporation of the Corporation is amended and restated in its entirety to read as set forth in Exhibit A attached hereto.
[ Signature page follows ]
IN WITNESS WHEREOF, Lamb Weston Holdings, Inc. has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer on November 7, 2016.
LAMB WESTON HOLDINGS, INC. | ||
By: | /s/ Thomas P. Werner | |
Name: | Thomas P. Werner | |
Title: | President and Chief Executive Officer |
Exhibit A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
LAMB WESTON HOLDINGS, INC.
November 8, 2016
ARTICLE I
NAME
The name of the corporation is Lamb Weston Holdings, Inc. (the Corporation ).
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, County of New Castle, Delaware 19808. The name of the Corporations registered agent at such address is THE PRENTICE-HALL CORPORATION SYSTEM, INC.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the DGCL ).
ARTICLE IV
AUTHORIZED STOCK
Section 1. Authorized Capital Stock . The Corporation is authorized to issue two classes of capital stock, designated Common Stock and Preferred Stock. The total number of shares of capital stock that the Corporation is authorized to issue is six hundred sixty million (660,000,000) shares, consisting of six hundred million (600,000,000) shares of Common Stock, par value $1.00 per share, and sixty million (60,000,000) shares of Preferred Stock, par value $1.00 per share.
Section 2. Preferred Stock . The Preferred Stock may be issued in one or more series. The Board of Directors of the Corporation (the Board ) is hereby authorized to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, powers, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof. The authority of the Board with respect to each such series will include, without limiting the generality of the foregoing, the determination of any or all of the following:
(a) the number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series;
(b) the voting powers, if any, and whether such voting powers are full or limited in such series;
(c) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;
(d) whether dividends, if any, will be cumulative or noncumulative, the dividend rate of such series, and the dates and preferences of dividends on such series;
(e) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Corporation;
(f) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock, or any other security, of the Corporation or any other corporation or other entity, and the rates or other determinants of conversion or exchange applicable thereto;
(g) the right, if any, to subscribe for or to purchase any securities of the Corporation or any other corporation or other entity;
(h) the provisions, if any, of a sinking fund applicable to such series; and
(i) any other relative, participating, optional, or other special powers, preferences or rights and qualifications, limitations, or restrictions thereof;
all as may be determined from time to time by the Board and stated or expressed in the resolution or resolutions providing for the issuance of such Preferred Stock (collectively, a Preferred Stock Designation ).
Section 3. Common Stock . Subject to the rights of the holders of any series of Preferred Stock, the holders of Common Stock will be entitled to one vote on each matter submitted to a vote at a meeting of stockholders for each share of Common Stock held of record by such holder as of the record date for such meeting.
ARTICLE V
BYLAW AMENDMENTS
The Board may make, amend, and repeal the Bylaws of the Corporation. Any Bylaw made by the Board under the powers conferred hereby may be amended or repealed by the Board (except as specified in any such Bylaw so made or amended) or by the stockholders in the manner provided in the Bylaws of the Corporation. The Corporation may in its Bylaws confer powers upon the Board in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board by applicable law. For the purposes of this Certificate of Incorporation, Voting Stock means stock of the Corporation of any class or series entitled to vote generally in the election of Directors.
2
ARTICLE VI
ACTION BY STOCKHOLDERS; MEETINGS OF STOCKHOLDERS
Subject to the rights of the holders of any series of Preferred Stock:
(a) any action required or permitted to be taken by the stockholders of the Corporation may be taken only at a duly called annual or special meeting of stockholders of the Corporation and may not be taken without a meeting by means of any consent in writing of such stockholders; and
(b) special meetings of stockholders of the Corporation may be called only (i) by the Chairman of the Board (the Chairman ), (ii) by the Chief Executive Officer of the Corporation (the Chief Executive Officer ), or (iii) by the Secretary of the Corporation (the Secretary ) acting at the request of the Chairman, the Chief Executive Officer or a majority of the entire Board.
At any annual meeting or special meeting of stockholders of the Corporation, only such business will be conducted or considered as has been brought before such meeting in the manner provided in the Bylaws of the Corporation.
ARTICLE VII
BOARD OF DIRECTORS
Section 1. Number, Election, and Terms of Directors . Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, the number of the Directors of the Corporation will not be less than 7 nor more than 13 and will be fixed from time to time in the manner provided in the Bylaws of the Corporation. The Directors, other than those who may be elected by the holders of any series of Preferred Stock, will be elected, as provided in the Bylaws of the Corporation, at each annual meeting of stockholders to serve as such until the next annual meeting of stockholders and until their successors are elected and qualified; provided that any Directors that are to be elected by the holders of any series of the Preferred Stock will be so elected in the manner provided in the applicable Preferred Stock Designation. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, Directors may be elected by the stockholders only at an annual meeting of stockholders. Election of Directors of the Corporation need not be by written ballot unless requested by the presiding officer or by the holders of a majority of the Voting Stock present in person or represented by proxy at a meeting of the stockholders at which Directors are to be elected. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.
3
Section 2. Nomination of Director Candidates . Advance notice of stockholder nominations for the election of Directors must be given in the manner provided in the Bylaws of the Corporation.
Section 3. Newly Created Directorships and Vacancies . Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board resulting from death, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board, or by a sole remaining Director. Any Director elected in accordance with the preceding sentence will hold office for a term expiring at the next annual meeting of stockholders and until such Directors successor has been elected and qualified. No decrease in the number of Directors constituting the Board may shorten the term of any incumbent Director.
ARTICLE VIII
LIMITATION OF LIABILITY
To the full extent permitted by the Delaware General Corporation Law and any other applicable law currently or hereafter in effect, no Director of the Corporation will be personally liable to the Corporation or its stockholders for or with respect to any breach of fiduciary duty or other act or omission as a Director of the Corporation. No repeal or modification of this Article VIII will adversely affect the protection of any Director of the Corporation provided hereby in relation to any breach of fiduciary duty or other act or omission as a Director of the Corporation occurring prior to the effectiveness of such repeal or modification.
ARTICLE IX
EFFECTS OF BUSINESS COMBINATIONS
The Board of Directors of the Corporation, when evaluating any offer of another party to (a) make a tender or exchange offer for any equity security of the Corporation, (b) merge or consolidate the Corporation with another corporation, or (c) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, may, in connection with the exercise of its judgment in determining what is in the best interests of the Corporation and its stockholders, give due consideration to all relevant factors, including without limitation the social and economic effects on the employees, customers, suppliers and other constituents of the Corporation and its subsidiaries and on the communities in which the Corporation and its subsidiaries operate or are located.
ARTICLE X
PROHIBITION OF GREENMAIL
Section 1. Any purchase or other acquisition, directly or indirectly, in one or more transactions, by the Company or any Subsidiary (as hereinafter defined) of the Company of any shares of Voting Stock (as hereinafter defined) or any Voting Stock Right (as hereinafter defined) known by the Company to be beneficially owned by any Interested Stockholder (as hereinafter defined) who has purchased or otherwise acquired any such Voting Stock or Voting
4
Stock Right within two years prior to the date of such purchase or other acquisition from the Company or Subsidiary shall, except as hereinafter expressly provided, require the affirmative vote of at least a majority of all votes entitled to be cast by the holders of the Voting Stock (excluding Voting Stock held by an Interested Stockholder) voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or any agreement with any national securities exchange, or otherwise, but no such affirmative vote shall be required with respect to any purchase or other acquisition by the Company or any of its Subsidiaries of Voting Stock or Voting Stock Rights purchased at or below Fair Market Value (as hereinafter defined) or made as part of a tender or exchange offer made on the same terms to all holders of such securities and complying with the applicable requirements of the Securities Exchange Act of 1934 (the Exchange Act ) and the rules and regulations thereunder or in a Public Transaction (as hereinafter defined).
Section 2. For the purposes of this Article X:
(a) An Affiliate of, or a person Affiliated with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
(b) The term Associate used to indicate a relationship with any person, means (1) any corporation or organization (other than the Company or a Subsidiary of the Company) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of 5% or more of any class of equity securities, (2) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (3) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person.
(c) A person shall be a beneficial owner of any Voting Stock or Voting Stock Right:
(1) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) any right to vote pursuant to any agreement, arrangement or understanding; or
(3) which is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any security of any class of the Company or any of its Subsidiaries.
For the purposes of determining whether a person is an Interested Stockholder, the relevant class of securities outstanding shall be deemed to include all such securities
5
of which such person is deemed to be the beneficial owner through application of this subparagraph 3, but shall not include any other securities of such class which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion right, warrants or options, or otherwise, but are not yet issued.
(d) Fair Market Value means, for any share of Voting Stock or any Voting Stock Right, the average of the closing sale prices during the 30-day period immediately preceding the repurchase of such Voting Stock or Voting Stock Right, as the case may be, on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such Voting Stock or Voting Stock Right, as the case may be, is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such Voting Stock or Voting Stock Rights, as the case may be, is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such Voting Stock or Voting Stock Right, as the case may be, is listed, or if such Voting Stock or Voting Stock Right, as the case may be, is not listed on any such exchange, the average of the closing bid quotations with respect to a share of such Voting Stock or Voting Stock Right, as the case may be, during the 90-day period immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the Fair Market Value on the date in question of a share of such Voting Stock or Voting Stock Right, as the case may be, as determined by the Board of Directors in good faith.
(e) Interested Stockholder shall mean any person (other than (i) the Company, (ii) any of its Subsidiaries, (iii) any benefit plan or trust of or for the benefit of the Company or any of its Subsidiaries, (iv) any trustee, agent or other representative of any of the foregoing, or (v) any person who beneficially owned more than 3% of any class of Voting Stock on November 8, 2016), who or which:
(1)(a) is the beneficial owner, directly or indirectly, of more than 3% of any class of Voting Stock (or Voting Stock Rights with respect to more than 3% of any such class); or
(2) is an Affiliate of the Company and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than 3% of any class of Voting Stock (or Voting Stock Rights with respect to more than 3% of any such class); or
(3) is an assignee of or has otherwise succeeded to any shares of any class of Voting Stock (or Voting Stock Rights with respect to more than 3% of any such class) which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Stockholder, unless such assignment or succession shall have occurred pursuant to any Public Transaction or a series of transactions including a Public Transaction.
(f) A person shall mean any individual, firm, corporation or other entity (including a group within the meaning of Section 13(d) of the Exchange Act).
6
(g) A Public Transaction shall mean any (i) purchase of shares offered pursuant to an effective registration statement under the Securities Act of 1933, or (ii) open market purchases of shares if, in either such case, the price and other terms of sale are not negotiated by the purchaser and seller of the beneficial interest in the shares.
(h) The term Subsidiary shall mean any corporation at least a majority of the outstanding securities of which having ordinary voting power to elect a majority of the board of directors of such corporation (whether or not any other class of securities has or might have voting power by reason of the happening of a contingency) is at the time owned or controlled directly or indirectly by the Company or one of more Subsidiaries or by the Company and one or more Subsidiaries.
(i) The term Voting Stock shall mean stock of all classes and series of the Company entitled to vote generally in the election of directors.
(j) The term Voting Stock Right shall mean any security convertible into, and any warrant, option or other right of any kind to acquire beneficial ownership of, any Voting Stock, other than securities issued pursuant to any of the Companys employee benefit plans.
Section 3. A majority of the Board of Directors shall have the power and duty to determine for the purposes of this Article X, on the basis of information known to it after reasonable inquiry, all facts necessary to determine compliance with this Article X, including without limitation, (a) whether (i) a person is an Interested Stockholder, (ii) any Voting Stock and Voting Stock Right is beneficially owned by any person; (iii) a person is an Affiliate or Associate of another and (iv) a transaction is a Public Transaction; and (b) the Fair Market Value of any Voting Stock or Voting Stock Right.
7
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF LAMB WESTON HOLDINGS, INC.
As Amended November 8, 2016
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meetings . The annual meeting of the stockholders shall be held on a date and at an hour determined by the Board of Directors (the Board ) for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting in accordance with these Bylaws.
Section 2. Special Meetings . (a) Special meetings of the stockholders may be called at any time by (i) the Chairman of the Board, (ii) the Chief Executive Officer of Lamb Weston, or (iii) by the Secretary acting at the request of the Chairman of the Board, Chief Executive Officer or a majority of the entire Board, in each case, to transact only such business as is specified in the notice of the meeting or authorized by a majority of the entire Board to be brought before the meeting.
(b) Notwithstanding the foregoing provisions of this Section 2 of this Article I, special meetings of holders of any outstanding Preferred Stock may be called in the manner and for the purposes provided in the applicable Preferred Stock Designation.
Section 3. Place of Meeting . The Board may designate any location as the place of meeting for any annual meeting or any special meeting.
Section 4. Notice of Meeting . Written notice of a meeting of stockholders, stating the place, if any, date, and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given, in a form and manner permitted by the General Corporation Law of the State of Delaware, as amended ( DGCL ), not less than ten nor more than sixty calendar days before the date of the meeting by or at the direction of the Chairman of the Board, the Chief Executive Officer, or the Secretary, to each stockholder of record entitled to vote at such meeting, except as otherwise provided by law. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at the address listed on the stock transfer books of Lamb Weston with postage prepaid. Lamb Weston need not send notices to stockholders for whom Lamb Weston has no current address, and action taken without notice to such persons has the same force and effect as if notice had been given to them. Lamb Weston shall be deemed to have no current stockholder address when (1) notice of 2 consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such 2 consecutive annual meetings, or (2) all, and at least 2, payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such person at such persons address as shown on the records of Lamb Weston and have been returned undeliverable. If any such person shall deliver to Lamb Weston a written notice setting forth such persons then
current address, the requirement that notice be given to such person shall be reinstated. Any previously scheduled meeting of the stockholders may be postponed, and (unless the Amended and Restated Certificate of Incorporation of Lamb Weston (the Certificate of Incorporation ) otherwise provides) any special meeting of the stockholders may be cancelled, by resolution of the Board upon public notice given prior to the date previously scheduled for such meeting of stockholders. When a meeting is recessed or adjourned to another place, date, or time, notice need not be given of the recessed or adjourned meeting if the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such recessed or adjourned meeting, are announced at the meeting at which the recess or adjournment is taken; provided , however , that if the recess or adjournment is for more than 30 calendar days, or if after the recess or adjournment a new record date is fixed for the recessed or adjourned meeting, written notice of the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such recessed or adjourned meeting, must be given in conformity herewith.
Section 5. Record Date . In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting; and (2) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (2) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
Section 6. Voting Lists . The officer or agent having charge of the stock transfer ledger for shares of Lamb Weston shall prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be opened to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting in accordance with applicable law. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The original or duplicate stock ledger shall be the only evidence detailing stockholders who are entitled to examine such list or to vote in person or by proxy at such election.
2
Section 7. Quorum . Except as otherwise provided by law or in a Preferred Stock Designation, a majority of the outstanding shares of Lamb Weston entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, the presiding officer of the meeting may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 8. Proxies; Voting . Except as otherwise provided by law, the Certificate of Incorporation or in a Preferred Stock Designation, each stockholder will be entitled at every meeting of the stockholders to one vote for each share of stock having voting power standing in the name of such stockholder on the books of Lamb Weston on the record date for the meeting, and such votes may be cast either in person or by proxy. Any such proxy shall be filed with the Secretary of Lamb Weston at or prior to the time of such meeting and authorized in a manner permitted by Section 212 of the DGCL (or any successor provision). Unless otherwise provided in the proxy, it shall be valid from the date of its execution until three years after its date of execution. When a quorum is present, all matters (other than the election of directors, which shall be governed by Section 14 of this Article I) shall, unless otherwise provided by the Certificate of Incorporation, these Bylaws, a Preferred Stock Designation, the rules or regulations of any stock exchange applicable to Lamb Weston, as otherwise provided by law or pursuant to any regulation applicable to Lamb Weston or its securities, be decided by the vote of the majority of the votes cast (with abstentions not considered votes cast).
Section 9. Voting of Shares by Certain Holders .
(a) Shares standing in the name of another corporation may be voted by such corporations duly authorized officer, agent, or proxy as the Bylaws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such corporation may determine.
(b) Shares held by an administrator, executor, guardian, conservator, or other fiduciary may be voted by such person, either in person or by proxy, without a transfer of such shares into the name of such person. Shares standing in the name of a trustee may be voted by such trustee, either in person or by proxy, but no trustee shall be entitled to vote such shares held without a transfer of such shares into his name, as trustee.
(c) Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so is contained in an appropriate order of the court.
(d) Persons whose stock is pledged shall be entitled to vote, unless the pledgor has effected the transfer on the books of Lamb Weston and has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon.
3
(e) Shares of its own stock belonging to Lamb Weston or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by Lamb Weston, shall neither be entitled to vote nor be accounted for quorum purposes; provided, however, that the foregoing shall not limit the right of Lamb Weston or any subsidiary of Lamb Weston to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Section 10. Notice of Stockholder Business .
(a) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before the annual meeting, business (other than the nomination of a person for election as a director, which is governed by Section 11 of this Article I), must be brought (i) by or at the direction of the Board or (ii) by any stockholder of Lamb Weston who was a stockholder of record at the time of giving of notice provided for in Section 4 of this Article I, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 10. For the avoidance of doubt, the foregoing clause (ii) will be the exclusive means for a stockholder to submit business before an annual meeting of stockholders (other than proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the Exchange Act ) and included in the notice of meeting given by or at the direction of the Board).
(b) For business to be properly brought before an annual meeting by a stockholder, a stockholder must have given timely notice thereof in writing to the Secretary of Lamb Weston, the notice must be in proper form and such business must otherwise be a proper matter for stockholder action.
(c) To be timely, a stockholders notice must be delivered to or mailed and received at the principal executive offices of Lamb Weston, not less than 90 nor more than 120 days prior to the first anniversary of the preceding years annual meeting; provided, however, that in the event the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from such anniversary date, notice by the stockholder to be timely must be so delivered or mailed and received no earlier than the 120th day prior to such annual meeting and no later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the date on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholders notice as described above.
(d) To be in proper form, a stockholders notice to the Secretary must set forth in writing:
(1) Information Regarding the Proposing Person . As to each Proposing Person (as such term is defined below): (A) the name and address of such Proposing Person, as they appear on Lamb Westons stock transfer book; (B) the class, series and number of shares of Lamb Weston directly or indirectly beneficially owned or held of record by such Proposing Person (including any shares of any class or series of Lamb Weston as to which such
4
Proposing Person has a right to acquire beneficial ownership, whether such right is exercisable immediately or only after the passage of time); (C) a representation (i) that the stockholder giving the notice is a holder of record of stock of Lamb Weston entitled to vote at the annual meeting and intends to appear at the annual meeting to bring such business before the annual meeting and (ii) as to whether any Proposing Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of shares of Lamb Weston entitled to vote and required to approve the proposal and, if so, identifying such Proposing Person; (D) a description of any (i) option, warrant, convertible security, stock appreciation right or similar right or interest (including any derivative securities, as defined under Rule 16a-1 under the Exchange Act), whether or not presently exercisable, with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of securities of Lamb Weston or with a value derived in whole or in part from the value of any class or series of securities of Lamb Weston, whether or not such instrument or right is subject to settlement in whole or in part in the underlying class or series of securities of Lamb Weston or otherwise, directly or indirectly held of record or owned beneficially by such Proposing Person and (ii) each other direct or indirect right or interest that may enable such Proposing Person to profit or share in any profit derived from, or to manage the risk or benefit from, any increase or decrease in the value of Lamb Westons securities, in each case regardless of whether (x) such right or interest conveys any voting rights in such security to such Proposing Person, (y) such right or interest is required to be, or is capable of being, settled through delivery of such security, or (z) such Proposing Person may have entered into other transactions that hedge the economic effect of any such right or interest (any such right or interest referred to in this clause (D) being a Derivative Interest ); (E) any proxy, contract, arrangement, understanding or relationship pursuant to which the Proposing Person has a right to vote any shares of Lamb Weston or which has the effect of increasing or decreasing the voting power of such Proposing Person; (F) any rights directly or indirectly held of record or beneficially by the Proposing Person to dividends on the shares of Lamb Weston that are separated or separable from the underlying shares of Lamb Weston; (G) any performance-related fees (other than an asset-based fee) to which the Proposing Person may be entitled as a result of any increase or decrease in the value of shares of Lamb Weston or Derivative Interests; and (H) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required pursuant to Section 14(a) of the Exchange Act to be made in connection with a general solicitation of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting.
(2) Information Regarding the Proposal . As to each item of business that the stockholder giving the notice proposes to bring before the annual meeting: (A) a description in reasonable detail of the business desired to be brought before the annual meeting and the reasons why such stockholder or any other Proposing Person believes that the taking of the proposed action or actions would be in the best interests of Lamb Weston and its stockholders; (B) a description in reasonable detail of any material interest of any Proposing Person in such business and a description in reasonable detail of all agreements, arrangements and understandings among the Proposing Persons or between any Proposing Person and any other person or entity in connection with the proposal; and (C) the text of the proposal (including the text of any resolutions proposed for consideration).
5
(e) A stockholder is not entitled to have its proposal included in Lamb Westons proxy statement or form of proxy solely as a result of such stockholders compliance with the foregoing provisions of this Section 10 .
(f) If a stockholder does not appear at the annual meeting to bring business in accordance with this Section 10, any such proposal will be disregarded (notwithstanding that proxies in respect of such proposal may have been solicited, obtained or delivered).
(g) Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 10. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 10, and if such person should so determine, such person shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
(h) For purposes of this Section 10 , Proposing Person means (i) the stockholder providing the notice of business to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business to be brought before the annual meeting is given, and (iii) any Affiliate or Associate (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.
Section 11. Notice of Stockholder Nominees at an Annual Meeting .
(a) Subject to the rights, if any, of any series of Preferred Stock to nominate or elect directors under circumstances specified in a Preferred Stock Designation, only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as directors. Nominations of persons for election as directors of Lamb Weston may be made only at an annual meeting of stockholders (i) by or at the direction of the Board or (ii) by a stockholder of Lamb Weston who was a stockholder of record at the time of giving of notice provided for in Section 4 of this Article I, who is entitled to vote at the annual meeting and entitled to vote for the election of directors at the meeting, and who complies with the notice procedures set forth in this Section 11.
(b) For nominations to be properly brought at an annual meeting by a stockholder, a stockholder must have given timely notice in proper form to the Secretary of Lamb Weston.
(c) To be timely, a stockholders notice shall be delivered to or mailed and received at the principal executive offices of Lamb Weston not less than 90 nor more than 120 days prior to the first anniversary of the preceding years annual meeting? provided, however, that in the event the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from such anniversary date, notice by the stockholder to be timely must be so delivered or mailed and received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the date on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholders notice as described above.
6
(d) To be in proper form, a stockholders notice to the Secretary must set forth in writing:
(1) Information Regarding the Nominating Person . As to each Nominating Person (as such term is defined below): (A) the name and address of such Nominating Person, as they appear on Lamb Westons stock transfer book; (B) the class, series and number of shares of Lamb Weston directly or indirectly beneficially owned or held of record by such Nominating Person (including any shares of any class or series of Lamb Weston as to which such Nominating Person has a right to acquire beneficial ownership, whether such right is exercisable immediately or only after the passage of time); (C) a representation (i) that the stockholder giving the notice is a holder of record of stock of Lamb Weston entitled to vote at the annual meeting and intends to appear at the annual meeting to bring such nomination before the annual meeting and (ii) as to whether any Nominating Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of shares of Lamb Weston entitled to vote and required to approve the nomination and, if so, identifying such Nominating Person; (D) a description of any Derivative Interest; (E) any proxy, contract, arrangement, understanding or relationship pursuant to which the Nominating Person has a right to vote any shares of Lamb Weston or which has the effect of increasing or decreasing the voting power of such Nominating Person; (F) any rights directly or indirectly held of record or beneficially by the Nominating Person to dividends on the shares of Lamb Weston that are separated or separable from the underlying shares of Lamb Weston; (G) any performance-related fees (other than an asset-based fee) to which the Nominating Person may be entitled as a result of any increase or decrease in the value of shares of Lamb Weston or Derivative Interests; and (H) any other information relating to such Nominating Person that would be required to be disclosed in a proxy statement or other filing required pursuant to Section 14(a) of the Exchange Act to be made in connection with a general solicitation of proxies or consents by such Nominating Person in support of the nomination proposed to be brought before the meeting.
(2) Information Regarding the Nominee . As to each person whom the stockholder giving notice proposes to nominate for election as a director: (A) all information with respect to such proposed nominee that would be required to be set forth in a stockholders notice pursuant to this Section 11 if such proposed nominee were a Nominating Person; (B) all information relating to such proposed nominee that would be required to be disclosed in a proxy statement or other filing required pursuant to Section 14(a) under the Exchange Act to be made in connection with a general solicitation of proxies for an election of directors in a contested election (including such proposed nominees written consent to be named in the proxy statement as a nominee and to serve as a director if elected); (C) all information that would be required to be disclosed pursuant to Items 403 and 404 under Regulation S-K of the Securities Act of 1933 if the stockholder giving the notice or any other Nominating Person were the registrant for purposes of such rule and the proposed nominee were a director or executive officer of such registrant; (D) a completed questionnaire (in the form provided by the Secretary upon written request) with respect to the identity, background and qualification of the proposed nominee and the background of any other person or entity on whose behalf the nomination is being made; (E) a written representation and agreement (in the form provided by the Secretary upon written
7
request) that the proposed nominee (i) is not and will not become a party to (x) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the proposed nominee, if elected as a director of Lamb Weston, will act or vote on any issue or question (a Voting Commitment ) that has not been disclosed to Lamb Weston or (y) any Voting Commitment that could limit or interfere with the proposed nominees ability to comply, if elected as a director of Lamb Weston, with the proposed nominees fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than Lamb Weston with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (iii) if elected as a director of Lamb Weston, would be in compliance and will comply, with all applicable publicly disclosed corporate governance, ethics, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of Lamb Weston (including without limitation the policy set forth in Section 14 of this Article I and the related agreement of the proposed nominee to tender, promptly following the meeting at which he or she is elected as director, an irrevocable resignation that will be effective as provided in Section 14 of this Article I).
(e) Lamb Weston may require any proposed nominee to furnish such other information as may be reasonably required by Lamb Weston to determine the qualifications and eligibility of such proposed nominee to serve as a director.
(f) A stockholder is not entitled to have its nominees included in Lamb Westons proxy statement solely as a result of such stockholders compliance with the foregoing provisions of this Section 11.
(g) If a stockholder does not appear at the annual meeting to present its nomination in accordance with this Section 11, such nomination will be disregarded (notwithstanding that proxies in respect of such nomination may have been solicited, obtained or delivered).
(h) No person shall be eligible for election as a director of Lamb Weston unless nominated in accordance with the procedures set forth in the Bylaws. The presiding officer of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if such person should so determine, such person shall so declare to the meeting and the defective nomination shall be disregarded.
(i) For purposes of this Section 11, Nominating Person means (i) the stockholder providing the notice of the nomination made to be at an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of nomination to be made at the annual meeting is given, and (iii) any Affiliate or Associate (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.
Section 12. Inspectors of Elections . The Board, by resolution shall, in advance of the meeting, appoint one or more inspectors, which inspector or inspectors may include individuals who serve Lamb Weston in other capacities, including, without limitation, as officers,
8
employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the presiding officer of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by law.
Section 13. Conduct of Meetings . The Chairman of the Board, or an officer of Lamb Weston designated from time to time by a majority of the Board, will call meetings of stockholders to order and will act as presiding officer thereof. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the presiding officer of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts, as in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted to questions or comments by participants; (vi) ascertaining whether any stockholder or his or her proxy holder may be excluded from the meeting based upon any determination by the presiding officer, in his or her sole discretion, that any such person has disrupted or is likely to disrupt the proceedings thereat; (vii) determining the circumstances in which any person may make a statement or ask questions at the meeting; (viii) ruling on all procedural questions that may arise during or in connection with the meeting; and (ix) determining whether any nomination or business proposed to be brought before the meeting has been properly brought before the meeting. Unless and to the extent determined by the Board or the presiding officer of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 14. Required Vote for Election of Directors .
(a) Each director shall be elected by the vote of the majority of the votes cast with respect to that directors election at any meeting for the election of directors at which a quorum is present; provided, if the number of persons properly nominated to serve as directors exceeds the number of directors to be elected, then each director of the corporation shall be elected by the vote of a plurality of the shares present in person or by proxy at the meeting and entitled to vote on the election of directors. For purposes of this Section 14, a majority of votes cast shall mean that the number of shares voted for a directors election exceeds 50% of the number of votes cast with respect to the directors election votes cast shall include votes to withhold authority and exclude abstentions with respect to the directors election.
9
(b) If a nominee for director is not elected and the nominee is an incumbent director, the director shall promptly tender his or her resignation from the Board, subject to acceptance by the Board. The corporate governance committee will make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board will act on the tendered resignation, taking into account the corporate governance committees recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of certification of the election results. The corporate governance committee in making its recommendation and the Board in making its decision may each consider any factors or other information that they consider appropriate and relevant. The director who tenders his or her resignation will not participate in the recommendation of the corporate governance committee or the decision of the Board with respect to his or her resignation.
(c) If a directors resignation is accepted by the Board pursuant to this Section 14, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board may fill the resulting vacancy pursuant to the provisions of Section 8 of Article II of these Bylaws or may decrease the size of the Board pursuant to the provisions of Section 2 of Article II of these Bylaws.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers . The business and affairs of Lamb Weston shall be managed by or under the direction of the Board. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of Lamb Weston and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.
Section 2. Number, Tenure and Qualifications . Subject to the rights, if any, of any series of Preferred Stock to elect additional directors under circumstances specified in a Preferred Stock Designation, and subject to the minimum and maximum number of authorized directors provided in the Certificate of Incorporation, the number of directors of Lamb Weston may be fixed from time to time by a resolution of the Board. Directors will be elected at each annual meeting of stockholders to serve as such until the next annual meeting of stockholders and until their successors are elected and qualified; provided that any directors that are to be elected by the holders of any series of the Preferred Stock will be so elected in the manner provided in the applicable Preferred Stock Designation. Directors need not be residents of the State of Delaware or stockholders of Lamb Weston.
Section 3. Regular Meetings . Regular meetings of the Board shall be held on the same date as the annual meeting of stockholders, and at such other time and place, either within or without the State of Delaware, as may from time to time be determined by the Board.
Section 4. Special Meetings . Special meetings of the Board may be called, upon notice to each director to whom such notice is not waived, given in a manner permitted by Section 5 of
10
this Article II, by or at the request of the Chairman of the Board, Chief Executive Officer, or a majority of the Board. The time and place of any such special meeting shall be as specified in the notice of such meeting.
Section 5. Notice . Notice shall be given three days in advance of any special meeting of the Board, or in emergency situations designated by the Chairman of the Board or the Chief Executive Officer, 12 hours notice of a special meeting of the Board may be given, by telephone, personal delivery, or other means of electronic transmission. Notices of other meetings of the Board may be given by mail or may (and, if three or fewer days notice is given, shall) be given by courier service, personal delivery or, to the extent permitted by the DGCL, by electronic transmission. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid. Notices sent by electronic transmission shall be deemed effective as set forth in Section 232 of the DGCL (or any successor provision). Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting. For purposes of this Section 5 , electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 6. Quorum; Remote Participation . A majority of the number of directors fixed in accordance with Section 2 of this Article II shall constitute a quorum for the transaction of business at any meeting of the Board, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Members of the Board or any committee designated by the Board may participate in a meeting of the Board or any such committee, as the case may be, by means of telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting will constitute presence in person at the meeting.
Section 7. Manner of Acting . Except as otherwise required by applicable law, the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if a written consent thereto is signed by all members of the Board or electronic transmissions delivered by all members of the Board, and such written consent or electronic transmissions are filed with the minutes of the proceedings of the Board. A consent in lieu of meeting may be made either by one consent signed by all the directors or by individual consents signed by each director. The directors may also meet by means of conference telephone or other communications equipment as provided by Delaware law.
Section 8. Vacancies . Subject to the rights, if any, of holders of any series of Preferred Stock to elect additional directors under circumstances specified in a Preferred Stock Designation, newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board resulting from death, resignation, disqualification, removal, or
11
other cause, shall be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected in accordance with the preceding sentence will hold office for a term expiring at the next annual meeting of stockholders and until such directors successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the full Board shall shorten the term of any incumbent director.
Section 9. Compensation . By resolution of the Board, the directors may be paid expenses, if any, for attendance at each meeting of the Board. In addition, by resolution of the Board, each director may be paid an annual retainer fee and committee fees for services as director and may also receive a fee for attendance at regular or special meetings of the Board. No such payment shall preclude any director from serving Lamb Weston in any other capacity and receiving compensation therefor.
Section 10. Committees . The Board may designate, by resolution or resolutions passed by a majority of the Board, one or more committees as the Board deems necessary or desirable or as may be required by applicable regulations or stock exchange rules. Each committee shall be composed of one or more directors, appointed by the Board, as specified in these Bylaws or required by applicable regulations or stock exchange rules. The Board shall have the power at any time to appoint the chairperson and the members of any committee, to change the membership of any committee, to fill all vacancies on committees, to designate alternate members to replace or act in the place of any absent or disqualified member of a committee, or to dissolve any committee. A member of a committee may resign from that committee at any time by giving written notice of such resignation to the Chairman of the Board. Unless otherwise specified in such resignation notice, such resignation from the committee shall take effect upon receipt thereof. Any such committee, to the extent provided in such committees charter, by resolution of the Board, or in these Bylaws, will have and may exercise all the powers and authority of the Board in the management of the business and affairs of Lamb Weston, and may authorize the seal of Lamb Weston to be affixed to all papers which may require it; but no such committee will have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) making, adopting, amending or repealing any provision of these Bylaws. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided in these Bylaws, in the charter of such committee or required by law. Adequate provision shall be made for notice to committee members of all committee meetings. Any action required or permitted to be taken at any meeting of any committee may be taken without a meeting if a written consent thereto is signed by all members of such committee or electronic transmissions delivered by all members of such committee, and such written consent or electronic transmissions are filed with the minutes of the proceedings of such committee. A consent in lieu of meeting may be made either by one consent signed by all the members of the committee or by individual consents signed by each member of the committee.
Section 11. Chairman of the Board . The Board, by a majority vote of the entire Board, shall elect a Chairman from among the members of the Board. The Chairman of the Board shall not be considered to be an officer of Lamb Weston solely in his or her capacity as such. The
12
Chairman may be removed from that capacity by a majority vote of the entire Board. The Chairman shall preside at meetings of the Board and exercise and perform such other powers and duties as may from time to time be assigned to him or her by the Board or as may be prescribed by these Bylaws. In the absence of the Chairman, such other director of Lamb Weston designated by the Chairman or by the Board shall act as chairman of any such meeting. The Chairman or the Board may appoint a Vice Chairman of the Board to exercise and perform such other powers and duties as may from time to time be assigned to him or her by the Chairman or by the Board.
ARTICLE III
OFFICERS
Section 1. Number; Election and Status . The officers of Lamb Weston will be elected annually by the Board and will consist of the Chief Executive Officer ( CEO ), a Secretary and a Treasurer, all of whom shall be elected at a regular meeting of the Board. The Board may also choose any or all of the following: a President, one or more Vice Presidents (who may be given particular designations with respect to authority, function, or seniority), one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as the Board may from time to time determine. Notwithstanding the foregoing, the Board may authorize the CEO to appoint any person to any office other than the Secretary or Treasurer. Any number of offices may be held by the same person. Any of the offices may be left vacant from time to time as the Board may determine. In the case of the absence or disability of any officer of Lamb Weston or for any other reason deemed sufficient by a majority of the Board, the Board may delegate the absent or disabled officers powers or duties to any other officer or to any director.
Section 2. Term of Office . Each officer, whether elected by the Board or appointed by the CEO, shall hold office until the officers death, or resignation, or removal in the manner hereinafter provided.
Section 3. Removal . Officers elected by the Board may be removed at any time by a majority vote of the Board, or by the CEO with such action to be affirmed by a majority vote of the Board. Officers appointed by the CEO may be removed from office by the CEO or any officer designated by the CEO to have such authority. The acceptance of office by an officer shall constitute acceptance of this provision.
Section 4. Vacancies . A vacancy in the elected offices of CEO, Secretary or Treasurer, because of death, resignation, removal, disqualification or otherwise, shall be filled by a majority vote of the Board for the unexpired portion of the term. The CEO may fill vacancies of other officers.
Section 5. Authority and Duties . Each of the officers of Lamb Weston will have such authority and will perform such duties as are customarily incident to their respective offices or as may be specified from time to time by the Board.
13
ARTICLE IV
SHARES AND THEIR TRANSFER
Section 1. Shares . The shares of Lamb Weston shall be represented by certificates, provided that the Board of Lamb Weston may adopt a resolution permitting shares to be uncertificated. Notwithstanding the adoption of any such resolution providing for uncertificated shares, every holder of capital stock of Lamb Weston theretofore represented by certificates and, upon request, every holder of uncertificated shares, shall be entitled to have a certificate for shares of Lamb Weston. Such certificates shall be in such form as determined by the Board and shall be signed by the Chairman and by the Secretary, except that the signatures of the Chairman or the Secretary may be facsimiles, engraved or printed. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person owning shares, whether or not represented by certificates, with the number of shares and date of issue, shall be entered on the stock transfer books of Lamb Weston. All certificates surrendered to Lamb Weston, or its agent, for transfer shall be canceled and new certificated or uncertificated shares shall be issued only after the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate new certificated or uncertificated shares may be issued therefor upon such terms and indemnity to Lamb Weston as the Board may prescribe.
Section 2. Transfer of Shares . Transfer of shares of Lamb Weston shall be made only on the stock transfer books of Lamb Weston by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney authorized by power of attorney duly executed and filed with the transfer agent of Lamb Weston, and, if such shares are certificates, on surrender for cancellation of the certificate for such shares, and if such shares are uncertificated, upon proper instructions from the holder of the uncertificated shares. To the fullest extent permitted by law, the person in whose name shares stand on the books of Lamb Weston shall be deemed by Lamb Weston to be the owner thereof for all purposes.
Section 3. Charge for Certificates . Lamb Weston may invoke a charge approximately equal to the cost of issuing a stock certificate for each certificate of stock to be issued or reissued in excess of the minimum number of certificates required, if the number of certificates requested by a stockholder is deemed by the Secretary to be unreasonable.
Section 4. Lost, Stolen or Destroyed Certificates . The Secretary may direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by Lamb Weston alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate or certificates, the Secretary may require the owners of such lost, stolen or destroyed certificate or certificates to give Lamb Weston a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against Lamb Weston with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of the new certificate or uncertificated shares.
14
ARTICLE V
INDEMNIFICATION AND ADVANCEMENT
Section 1. Actions by Others . Lamb Weston shall indemnify any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of Lamb Weston) by reason of the fact that such person is or was a director, officer, employee or agent of Lamb Weston, or is or was serving at the request of Lamb Weston as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Lamb Weston, and, with respect to any criminal action or proceedings, had no reasonable cause to believe the conduct was criminal. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of Lamb Weston, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was criminal.
Section 2. Actions by or in the Right of Lamb Weston . Lamb Weston shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of Lamb Weston to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of Lamb Weston, or is or was serving at the request of Lamb Weston, as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Lamb Weston and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to Lamb Weston unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
Section 3. Successful Defense . To the extent that a director, officer, employee or agent of Lamb Weston has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article V, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith.
Section 4. Specific Authorization . Any indemnification under Section 1 and 2 of this Article V (unless ordered by a court) shall be made by Lamb Weston only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of
15
conduct set forth in said Sections 1 and 2. Such determination shall be made, with respect to a person who is a director, officer, employee or agent at the time of such determination (1) by a majority vote of directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
Section 5. Advance of Expenses . Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding shall be paid by Lamb Weston in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by Lamb Weston as authorized in this Article V. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate.
Section 6. Right of Indemnity Not Exclusive . The indemnification and advancement of expenses provided by or granted pursuant to the Certificate of Incorporation or these Bylaws shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
Section 7. Insurance . Lamb Weston may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of Lamb Weston, or is or was serving at the request of Lamb Weston as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such persons status as such, whether or not Lamb Weston would have the power to indemnify such person against such liability under the provisions of this Article V, Section 145 of the DGCL (or any successor provision), or otherwise.
Section 8. Employee Benefit Plans . For purposes of this Article V, references to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of Lamb Weston shall include any service as a director, officer, employee or agent of Lamb Weston which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of Lamb Weston as referred to in this Article V.
Section 9. Invalidity of any Provisions of this Article . The invalidity or unenforceability of any provisions of this Article shall not affect the validity or enforceability of the remaining provisions of this Article.
16
Section 10. Continuation of Indemnification . The indemnification and advancement of expenses, to the extent provided by or granted pursuant to this Article V, these Bylaws, or the Certificate of Incorporation shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such person. All rights to indemnification provided by or granted pursuant to this Article V, these Bylaws, or the Certificate of Incorporation shall be deemed to be a contract between Lamb Weston and each director, officer, employee, or agent of Lamb Weston who serves or served in such capacity at any time while this Article V is in effect. Any repeal or modification of this Article V shall not in any way diminish any rights to indemnification of such directors, officer, employee or agent, or the obligations of Lamb Weston arising hereunder in respect to any act or omission occurring prior to the time of such repeal or modification.
Section 11. Certain Claims . Notwithstanding Section 1 and Section 2 of this Article V, Lamb Weston shall be required to indemnify a person described in the first sentence of Section 1 or Section 2 of this Article V in connection with an action, suit or proceeding (or part thereof) commenced by such a person only if the commencement of such proceeding (or part thereof) by such person was authorized by the Board.
ARTICLE VI
FISCAL YEAR
The fiscal year of Lamb Weston shall end on the last Sunday in May, or such other date as may be fixed from time to time by the Board.
ARTICLE VII
DIVIDENDS
The Board may from time to time declare, and Lamb Weston may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.
ARTICLE VIII
SEAL
The Board shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name Lamb Weston Holdings, Inc. on the outer edge, and the words, Corporate Seal, in the center.
ARTICLE IX
WAIVER OF NOTICE
Whenever any notice is required to be given to any stockholder or director of Lamb Weston under the provisions of these Bylaws or under the provisions of the Certificate of Incorporation or under the provisions of the laws of Delaware, a waiver thereof given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
17
ARTICLE X
AMENDMENTS
These Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the Board at any regular or special meeting of the Board.
ARTICLE XI
MISCELLANEOUS
Section 1. Reliance Upon Books, Reports and Records . Each director, each member of a committee designated by the Board, and each officer of Lamb Weston will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of Lamb Weston and upon such information, opinions, reports, or statements presented to Lamb Weston by any of Lamb Westons officers or employees, or committees of the Board, or by any other person or entity as to matters the director, committee member, or officer believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of Lamb Weston.
Section 2. Forum for Adjudication of Disputes . Unless Lamb Weston consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of Lamb Weston, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Lamb Weston to Lamb Weston or Lamb Westons stockholders, (c) an action asserting a claim arising pursuant to any provision of the DGCL or Lamb Westons Certificate of Incorporation or these Bylaws (as either may be amended from time to time), or (d) any action asserting a claim governed by the internal affairs doctrine, shall be the Court of Chancery in the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware). If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than a court located within the State of Delaware (a Foreign Action ) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (ii) having service of process made upon such stockholder in any such action by service upon such stockholders counsel in the Foreign Action as agent for such stockholder.
Section 3. Certain Defined Terms . Capitalized terms used herein and not otherwise defined have the meanings given to them in the Certificate of Incorporation.
18
Exhibit 4.1
LAMB WESTON HOLDINGS, INC.,
as Issuer
4.625% Senior Notes due 2024
INDENTURE
Dated as of November 9, 2016
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
TABLE OF CONTENTS
Page | ||||||
ARTICLE I | ||||||
Definitions and Incorporation by Reference | ||||||
SECTION 1.01. | Definitions | 1 | ||||
SECTION 1.02. | Other Definitions | 26 | ||||
SECTION 1.03. | [Reserved] | 27 | ||||
SECTION 1.04. | Rules of Construction | 27 | ||||
SECTION 1.05. | Limited Condition Acquisitions | 27 | ||||
ARTICLE II | ||||||
The Notes | ||||||
SECTION 2.01. | Amount of Notes | 28 | ||||
SECTION 2.02. | Form and Dating | 28 | ||||
SECTION 2.03. | Execution and Authentication | 29 | ||||
SECTION 2.04. | Registrar and Paying Agent | 29 | ||||
SECTION 2.05. | Paying Agent To Hold Money in Trust | 30 | ||||
SECTION 2.06. | Holder Lists | 30 | ||||
SECTION 2.07. | Transfer and Exchange | 30 | ||||
SECTION 2.08. | Replacement Notes | 39 | ||||
SECTION 2.09. | Outstanding Notes | 39 | ||||
SECTION 2.10. | Cancellation | 39 | ||||
SECTION 2.11. | Defaulted Interest | 39 | ||||
SECTION 2.12. | CUSIP, ISIN or Common Code Numbers | 40 | ||||
SECTION 2.13. | Calculation of Principal Amount of Notes | 40 | ||||
SECTION 2.14. | Temporary Notes | 40 | ||||
ARTICLE III | ||||||
Redemption | ||||||
SECTION 3.01. | Notices to Trustee | 40 | ||||
SECTION 3.02. | Selection of Notes To Be Redeemed | 40 | ||||
SECTION 3.03. | Notice of Redemption | 41 | ||||
SECTION 3.04. | Effect of Notice of Redemption | 41 | ||||
SECTION 3.05. | Deposit of Redemption Price | 42 | ||||
SECTION 3.06. | Notes Redeemed in Part | 42 | ||||
ARTICLE IV | ||||||
Covenants | ||||||
SECTION 4.01. | Covenant Suspension | 42 | ||||
SECTION 4.02. | Payment of Notes | 42 | ||||
SECTION 4.03. | SEC Reports | 43 | ||||
SECTION 4.04. | Limitation on Debt | 43 | ||||
SECTION 4.05. | Limitation on Restricted Payments | 46 | ||||
SECTION 4.06. | Limitation on Liens | 48 | ||||
SECTION 4.07. | Limitation on Asset Sales | 48 |
-i-
Page | ||||||
SECTION 4.08. |
Limitation on Restrictions on Distributions from Restricted Subsidiaries |
50 | ||||
SECTION 4.09. |
Limitation on Transactions with Affiliates |
51 | ||||
SECTION 4.10. |
Designation of Restricted and Unrestricted Subsidiaries |
52 | ||||
SECTION 4.11. |
[Reserved] |
53 | ||||
SECTION 4.12. |
Change of Control |
53 | ||||
SECTION 4.13. |
[Reserved] |
54 | ||||
SECTION 4.14. |
Limitation on Guarantees of Debt by Restricted Subsidiaries |
54 | ||||
ARTICLE V | ||||||
Successor Company | ||||||
SECTION 5.01. | When Company May Merge or Transfer Assets | 55 | ||||
ARTICLE VI | ||||||
Defaults and Remedies | ||||||
SECTION 6.01. | Events of Default | 57 | ||||
SECTION 6.02. |
Acceleration |
58 | ||||
SECTION 6.03. |
Other Remedies |
58 | ||||
SECTION 6.04. |
Waiver of Past Defaults |
58 | ||||
SECTION 6.05. |
Control by Majority |
59 | ||||
SECTION 6.06. |
Limitation on Suits |
59 | ||||
SECTION 6.07. |
Rights of Holders to Receive Payment |
59 | ||||
SECTION 6.08. |
Collection Suit by Trustee |
59 | ||||
SECTION 6.09. |
Trustee May File Proofs of Claim |
59 | ||||
SECTION 6.10. |
Priorities |
60 | ||||
SECTION 6.11. |
Undertaking for Costs |
60 | ||||
SECTION 6.12. |
Waiver of Stay or Extension Laws |
60 | ||||
ARTICLE VII | ||||||
Trustee | ||||||
SECTION 7.01. | Duties of Trustee | 60 | ||||
SECTION 7.02. |
Rights of Trustee |
61 | ||||
SECTION 7.03. |
Individual Rights of Trustee |
62 | ||||
SECTION 7.04. |
Trustees Disclaimer |
62 | ||||
SECTION 7.05. |
Notice of Defaults |
62 | ||||
SECTION 7.06. |
[Reserved] |
62 | ||||
SECTION 7.07. |
Compensation and Indemnity |
63 | ||||
SECTION 7.08. |
Replacement of Trustee |
63 | ||||
SECTION 7.09. |
Successor Trustee by Merger |
64 | ||||
SECTION 7.10. |
Eligibility; Disqualification |
64 | ||||
SECTION 7.11. |
Preferential Collection of Claims Against Company |
64 | ||||
ARTICLE VIII | ||||||
Discharge of Indenture; Defeasance | ||||||
SECTION 8.01. | Discharge of Liability on Notes; Defeasance | 64 | ||||
SECTION 8.02. |
Conditions to Defeasance |
65 | ||||
SECTION 8.03. |
Application of Trust Money |
66 | ||||
SECTION 8.04. |
Repayment to Company |
66 |
-ii-
Page | ||||||
SECTION 8.05. |
Indemnity for U.S. Government Obligations |
66 | ||||
SECTION 8.06. |
Reinstatement |
66 | ||||
ARTICLE IX | ||||||
Amendments | ||||||
SECTION 9.01. | Without Consent of Holders | 67 | ||||
SECTION 9.02. |
With Consent of Holders |
67 | ||||
SECTION 9.03. |
[Reserved] |
68 | ||||
SECTION 9.04. |
Revocation and Effect of Consents and Waivers |
68 | ||||
SECTION 9.05. |
Notation on or Exchange of Notes |
69 | ||||
SECTION 9.06. |
Trustee To Sign Amendments |
69 | ||||
SECTION 9.07. |
Additional Voting Terms; Calculation of Principal Amount |
69 | ||||
ARTICLE X | ||||||
Guarantee | ||||||
SECTION 10.01. | Guarantee of Notes. | 69 | ||||
SECTION 10.02. |
Limitation on Liability. |
71 | ||||
SECTION 10.03. |
Successors and Assigns |
71 | ||||
SECTION 10.04. |
No Waiver |
72 | ||||
SECTION 10.05. |
Modification |
72 | ||||
SECTION 10.06. |
Execution of Supplemental Indenture for Future Guarantors |
72 | ||||
SECTION 10.07. |
Non-Impairment |
72 | ||||
ARTICLE XI | ||||||
Miscellaneous | ||||||
SECTION 11.01. | Reserved | 72 | ||||
SECTION 11.02. |
Notices |
72 | ||||
SECTION 11.03. |
Communication by Holders with Other Holders |
73 | ||||
SECTION 11.04. |
Certificate and Opinion as to Conditions Precedent |
73 | ||||
SECTION 11.05. |
Statements Required in Certificate or Opinion |
73 | ||||
SECTION 11.06. |
Annual Officers Certificate as to Compliance |
73 | ||||
SECTION 11.07. |
When Notes Disregarded |
73 | ||||
SECTION 11.08. |
Rules by Trustee, Paying Agents and Registrar |
74 | ||||
SECTION 11.09. |
Legal Holidays |
74 | ||||
SECTION 11.10. |
Governing Law; Jury Trial Waiver |
74 | ||||
SECTION 11.11. |
No Recourse Against Others |
74 | ||||
SECTION 11.12. |
Successors |
74 | ||||
SECTION 11.13. |
Multiple Originals |
74 | ||||
SECTION 11.14. |
Table of Contents; Headings |
74 | ||||
SECTION 11.15. |
Force Majeure |
74 | ||||
SECTION 11.16. |
U.S.A. Patriot Act |
74 |
EXHIBIT INDEX |
||||
Exhibit A |
- |
Form of Initial Note |
||
Exhibit B |
- |
Form of Certificate of Transfer |
||
Exhibit C |
- |
Form of Certificate of Exchange |
||
Exhibit D |
- |
Form of Supplemental Indenture |
-iii-
INDENTURE dated as of November 9, 2016 among LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Company), the Guarantors (as defined herein) party hereto from time to time and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as Trustee (the Trustee).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) $833,000,000 aggregate principal amount of the Companys 4.625% Senior Notes due 2024 issued on the date hereof (the Initial Notes) and (ii) Additional Notes issued from time to time (together with the Initial Notes, the Notes):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions .
2026 Notes means the 4.875% Senior Notes due 2026 issued by the Company on the Issue Date.
2026 Notes Indenture means the indenture dated as of the Issue Date by and among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee, relating to the 2026 Notes.
Additional Assets means:
(a) any Property (other than cash, cash equivalents, securities and inventory) to be owned by the Company or any Restricted Subsidiary and used or useful in a Permitted Business;
(b) Equity Interests of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Equity Interests by the Company or another Restricted Subsidiary; or
(c) Equity Interests constituting a minority interest not held by the Company or a Restricted Subsidiary in any Person that at such time is a Restricted Subsidiary;
provided , however , that, in the case of clauses (b) and (c), the Restricted Subsidiary is primarily engaged in a Permitted Business.
Additional Notes means Notes issued under the terms of this Indenture subsequent to the Issue Date and in compliance with Section 4.04, it being understood that any Notes issued in exchange for or replacement of any Initial Note shall not be an Additional Note.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Allocable Excess Proceeds means the product of:
(a) the Excess Proceeds, and
(b) a fraction,
(1) the numerator of which is the aggregate principal amount of the Notes outstanding on the date of the Prepayment Offer, and
(2) the denominator of which is the sum of the aggregate principal amount of the Notes outstanding on the date of the Prepayment Offer and the aggregate principal amount of other Debt of the Company outstanding on the date of the Prepayment Offer that is pari passu in right of payment with the Notes and subject to terms and conditions in respect of Asset Sales similar in all material respects to Section 4.07 and requiring the Company to make an offer to purchase such Debt at substantially the same time as the Prepayment Offer.
Applicable Premium means with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, or:
(A) the present value at such redemption date of (i) the redemption price of such Note at November 1, 2021 (such redemption price being set forth in the table appearing in paragraph 5(a) of Exhibit A to this Indenture), plus (ii) all scheduled remaining interest payments due on such Note through November 1, 2021 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the principal amount of such Note.
Applicable Procedures means, with respect to any payment, tender, redemption, transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such payment, tender, redemption, transfer or exchange.
Asset Sale means any sale, lease, transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a disposition), of:
(a) any shares of Equity Interests of a Restricted Subsidiary (other than directors qualifying shares or shares of interests required to be held by foreign nationals pursuant to local law),
(b) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, or
(c) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary,
other than, in the case of clause (a), (b) or (c) above,
(1) any disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary,
(2) any disposition that constitutes a Restricted Payment permitted by Section 4.05 or a Permitted Investment,
(3) any disposition effected in compliance with Section 5.01,
(4) a sale of accounts receivables and related assets in connection with a Permitted Receivables Financing,
(5) the creation of Liens permitted by Section 4.06,
(6) the unwinding of any Swap Contract,
(7) transfers of condemned real property as a result of the exercise of eminent domain or other similar policies to the respective governmental authority or agency that has condemned such property (whether by deed in lieu of condemnation or otherwise), and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement,
-2-
(8) non-exclusive licenses or sublicenses of intellectual property in the ordinary course of business and abandonment or lapse of intellectual property that is, in the reasonable business judgment of the Company or its Restricted Subsidiary, no longer used in or useful in the conduct of their respective businesses,
(9) Specified Sales,
(10) the issuance by a Restricted Subsidiary of Disqualified Equity Interests or Preferred Stock that is permitted under Section 4.04, and
(11) any disposition that does not (alone or in a series of related dispositions) involve assets having a Fair Market Value or consideration in excess of $25.0 million.
Attributable Debt means, with respect to any Sale and Leaseback Transaction, (i) with respect to any such lease that creates a Capital Lease Obligation, the Capital Lease Obligation thereunder and (ii) with respect to any lease that does not result in a Capital Lease Obligation, the principal amount of the Capital Lease Obligation that would result if such lease was treated as a Capital Lease Obligation (assuming an interest rate for such lease equal to the interest rate applicable to the Notes).
Attributed Principal Amount means, on any day, with respect to any Permitted Receivables Financing entered into by the Company or any Restricted Subsidiary, the aggregate amount (with respect to any such transaction, the Invested Amount) paid to, or borrowed by, such Person as of such date under such Permitted Receivables Financing, minus the aggregate amount received by the applicable Receivables Financier and applied to the reduction of the Invested Amount under such Permitted Receivables Financing.
Authentication Agent means an institution, reasonably acceptable to the Company, appointed by the Trustee to authenticate the Notes.
Available Amount means, at any time, an amount equal to the sum, without duplication, of:
(a) 50% of Consolidated Net Income of the Company for the period (taken as a single accounting period (but excluding any fiscal quarter occurring solely during a Suspension Period)) commencing on the first day of the Companys first full fiscal quarter commencing after the Issue Date and ending on the last day of the most recent fiscal quarter for which internal financial statements are available at such time (or, if such aggregate cumulative Consolidated Net Income of the Company for such period shall be a deficit, minus 100% of such deficit); plus
(b) 100% of the Equity Interest Sale Proceeds or other capital contributions received by the Company (other than from a Subsidiary of the Company) following the Issue Date and prior to such time to the extent such proceeds have not been utilized as the basis the making of any Restricted Payment (other than pursuant to clause (c) of the first paragraph of Section 4.05); plus
(c) 100% of the net cash proceeds received by the Company or a Restricted Subsidiary (other than from the Company or a Subsidiary of the Company) from the issuance or sale of Debt of the Company or a Restricted Subsidiary following the Issue Date to the extent such Debt has been converted into or exchanged for Equity Interests (other than Disqualified Equity Interests) of the Company prior to such time; plus
(d) the aggregate amount of cash returns received by the Company or any Restricted Subsidiary (other than from the Company or a Subsidiary) from any Restricted Investment made pursuant to clause (c) of the first paragraph of Section 4.05 prior to such time (including upon the disposition of any such Investment); plus
-3-
(e) the Fair Market Value of the Companys and its Restricted Subsidiaries Restricted Investments in any Unrestricted Subsidiary at the time it is designated as a Restricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made pursuant to clause (c) of the first paragraph of Section 4.05.
Average Life means, as of any date of determination, with respect to any Debt or Preferred Stock, the quotient obtained by dividing:
(a) the sum of the product of the numbers of years (rounded to the nearest one-twelfth of one year) from the date of determination to the dates of each successive scheduled principal payment of that Debt or redemption or similar payment with respect to that Preferred Stock multiplied by the amount of the payment by
(b) the sum of all payments of this kind.
Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.
Board of Directors means the Board of Directors of the Company (or, in the case of clause (b) of the first paragraph of Section 4.09, the applicable Restricted Subsidiary) or any committee thereof duly authorized to act on behalf of such Board of Directors.
Business Day means each day that is not a Legal Holiday.
Capital Lease Obligation means any obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of Debt represented by that obligation shall be the capitalized amount of the obligations determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under that lease prior to the first date upon which that lease may be terminated by the lessee without payment of a penalty. For purposes of Section 4.06, a Capital Lease Obligation shall be deemed secured by a Lien on the Property being leased.
Cash Equivalents means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
(b) investments in (1) commercial paper and variable or fixed rate notes issued by (A) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (B) any bank whose short-term commercial paper rating from S&P is at least A-1 or from Moodys is at least P-1 (any such bank described in this clause (b) being an Approved Bank) (or by the parent company thereof) or (2) any commercial paper or variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 or better by S&P or P-1 or better by Moodys, and in each case maturing within 270 days from the date of acquisition thereof;
(c) investments in certificates of deposit, bankers acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any Approved Bank;
(d) repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (b) above;
-4-
(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moodys and (iii) have portfolio assets of at least $5,000,000,000; and
(f) other investments made for cash management purposes in any jurisdiction outside the United States where the Company or its Restricted Subsidiaries conduct business that are classified as cash equivalents in accordance with GAAP.
Change of Control means the occurrence of any of the following after the Spinoff:
(1) any person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act except that a person will be deemed to be the beneficial owner of any Equity Interests of the Company has the right to acquire, whether that right is exercisable immediately or only after the passage of time), directly or indirectly (including as a result of a merger or consolidation of the Company), of more than 50% of the voting power of the Equity Interests of the Company, entitled to vote for members of the Board of Directors on a fully diluted basis;
(2) the sale, lease or transfer (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries, taken as a whole, to any Person other than the Company or a Restricted Subsidiary; or
(c) the shareholders of the Company shall have approved any plan of liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Person shall not be deemed to have beneficial ownership of Equity Interests subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement unless such Person has the right to vote or direct the voting of such Equity Interests.
Clearstream means Clearstream Banking, Société Anonyme or any successor securities clearing agency.
Code means the Internal Revenue Code of 1986, as amended.
Company means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, means the successor.
ConAgra means ConAgra Foods, Inc., a Delaware corporation, which is expected to be renamed Conagra Brands, Inc. in connection with the Spinoff.
Consolidated EBITDA means, for any period, for the Company and its Restricted Subsidiaries on a consolidated basis, an amount equal to:
(a) Consolidated Net Income for such period, plus
(b) other than with respect to clause (iv) below, an amount which, in the determination of Consolidated Net Income for such period, has been deducted for, without duplication: (i) Consolidated Interest Expense, (ii) provision for taxes based on income, profits or capital of the Company and its Restricted Subsidiaries, including, without limitation, federal, state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations, (iii) depreciation and amortization expense and all other non-cash charges (including impairment charges), expenses or losses (except for any such expense that (x) requires accrual of a reserve for anticipated future cash payments for any period or (y) represents a write-down of current assets), (iv) (1) pro forma costs savings permitted to be reflected in pro forma financial statements prepared in accordance with Regulation S-X of the Exchange Act and (2) the amount of pro forma cost
-5-
savings, operating expense reductions and synergies (collectively, Cost Savings) that are reasonably expected by the Company to result over the next succeeding four fiscal quarter period (calculated as though such Cost Savings had been realized on the first day of such period) as a result of, or in connection with, actions (including any acquisition or disposition of a Restricted Subsidiary or line of business, in each case, outside the ordinary course of business) consummated during such period or expected to be taken within twelve months, provided that (A) such Cost Savings are reasonably identifiable, quantifiable and factually supportable, (B) the aggregate amount of such Cost Savings added pursuant to this clause (iv)(2) during such period shall not exceed an amount equal to 10.0% of Consolidated EBITDA for such period (calculated without giving effect to any amounts added back pursuant to this clause (iv)(2)) and (C) such pro forma Cost Savings shall only be added back for quarters ending on or prior to the last day of the fourth full fiscal quarter following the applicable action, and in each case described in this clause (iv), no Cost Savings shall be added pursuant to this clause (iv) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period, (v) (1) non-recurring, extraordinary or unusual cash charges, expenses or losses not exceeding $25.0 million in any four fiscal quarter period and (2) all cash charges, expenses or losses in connection with the Transactions that are incurred or accrued prior to the second anniversary of the Issue Date, (vi) any contingent or deferred payments (including earn-out payments, non-compete payments and consulting payments but excluding ongoing royalty payments) made in connection with any acquisition of a Restricted Subsidiary or line of business outside the ordinary course of business, (vii) the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including any write-offs or amortization of fees and expenses related to Permitted Receivables Financings), (viii) losses from foreign exchange translation adjustments or Swap Contracts during such period, (ix) losses associated with discontinued operations (but only after such operations are no longer owned or operated by the Company or a Restricted Subsidiary), (x) income associated with discontinued operations (but only after such operations are no longer owned or operated by the Company or a Restricted Subsidiary) acquisition integration costs and fees, including cash severance payments made in connection with acquisitions, (xi) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of issuance of Equity Interests of the Company ( provided that such net cash proceeds shall not increase the Available Amount), and (xii) the fees and expenses paid to third parties during such period that directly arise out of and are incurred in connection with any acquisition, investment, asset disposition, issuance or repayment of debt, issuance of Equity Interests, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed, and including transaction expenses incurred in connection therewith) or early extinguishment of Debt to the extent such items were subject to capitalization prior to the effectiveness of Financial Accounting Standards Board Statement No. 141R, Business Combinations, but are required under such statement to be expensed currently, minus
(c) the following to the extent included in the determination of Consolidated Net Income for such period, without duplication: (i) non-cash credits, income or gains, including non-cash gains from foreign exchange translation adjustments or Swap Contracts during such period (but excluding any non-cash credits, income or gains that represent an accrual in the ordinary course), (ii) any extraordinary or unusual income or gains (including amounts received on early terminations of Swap Contracts), and (iii) any federal, state, local and foreign income tax credits;
provided that, notwithstanding anything to the contrary contained herein (but subject to adjustments on a Pro Forma Basis for events occurring after the Issue Date), (x) Consolidated EBITDA for the portion of the fiscal quarter in which the Issue Date occurs for the period prior to the Issue Date shall be calculated in a manner consistent with the methodology used to calculate the deemed Consolidated EBITDA amounts provided below for each of the fiscal quarters ending on the date set forth below, and (y) Consolidated EBITDA shall be deemed to be the amount set forth below opposite such fiscal quarter:
-6-
Fiscal Quarter |
Consolidated EBITDA | |
Thirteen weeks ended February 28, 2016 |
$170.8 million | |
Thirteen weeks ended May 29, 2016 |
$157.6 million | |
Thirteen weeks ended August 28, 2016 |
$171.9 million |
Consolidated Fixed Charges means, for any period, the total interest expense (net of interest income) of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent Incurred by the Company or its Restricted Subsidiaries, without duplication,
(a) interest expense with respect to Capital Lease Obligations,
(b) amortization of debt discount,
(c) capitalized interest,
(d) non-cash interest expense,
(e) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing,
(f) net costs associated with Swap Contracts relating to interest rates (including amortization of fees) (it being understood that any net benefits associated with Swap Contracts relating to interest rates shall be included in interest income),
(g) Disqualified Equity Interest Dividends, excluding dividends paid in Qualified Equity Interests,
(h) Preferred Stock Dividends,
(i) interest Incurred in connection with Investments in discontinued operations, and
(j) interest accruing on any Debt of any other Person to the extent that Debt is guaranteed by the Company or any Restricted Subsidiary.
Notwithstanding anything to the contrary contained herein, (i) amortization or write-off of debt issuance costs, deferred financing or liquidity fees, commissions, fees and expenses, call premiums, (ii) any expensing of bridge, commitment and other financing fees and (iii) commissions, discounts, yield and other fees and charges Incurred in connection with any transaction (including, without limitation, any Permitted Receivables Financing) pursuant to which the Company or any Subsidiary of the Company may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets of the type specified in the definition of Permitted Receivables Financing shall not be included in Consolidated Fixed Charges.
Consolidated Fixed Charges Coverage Ratio means, as of any date of determination, the ratio of:
(a) the aggregate amount of EBITDA for the most recent four consecutive fiscal quarters for which internal financial statements are available on such determination date to
(b) Consolidated Fixed Charges for those four fiscal quarters;
provided , however , that the Consolidated Fixed Charges Coverage Ratio shall be calculated on a Pro Forma Basis.
Consolidated Funded Debt means, as of any date of determination with respect to the Company and its Restricted Subsidiaries on a consolidated basis, without duplication, the sum of: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term, and all obligations evidenced by
-7-
bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) all obligations arising under letters of credit (including standby and commercial), but only to the extent consisting of unpaid reimbursement obligations in respect of drawn amounts under letters of credit; (c) all Capital Lease Obligations; (d) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments to the extent not fixed and payable, and trade debt Incurred in the ordinary course of business) which would appear as liabilities on a balance sheet in accordance with GAAP; (e) all Disqualified Equity Interests of such Persons; (f) all guarantees by the Company or a Restricted Subsidiary with respect to outstanding Debt of the type specified in clauses (a) through (e) above of another Person; and (g) all Debt of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity organized under the laws of a jurisdiction other than the United States or a state thereof) in which the Company or any of its Restricted Subsidiaries is a general partner or joint venturer, except to the extent that Debt is expressly made non-recourse to such Person.
Consolidated Interest Expense means, for any period, for the Company and its Restricted Subsidiaries on a consolidated basis without duplication, the following (in each case as determined in accordance with GAAP): (a) all interest in respect of Consolidated Funded Debt (including the interest component of synthetic leases, account receivables securitization programs, off balance sheet loans or similar off balance sheet financing products) accrued during such period (whether or not actually paid during such period) determined after giving effect to any net payments made or received under interest rate Swap Contracts minus (b) the sum of (i) all interest income during such period and (ii) to the extent included in clause (a) above, the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including write-offs or amortization of fees and expenses related to Permitted Receivables Financings), and amounts paid (or plus any amounts received) on early terminations of Swap Contracts plus (c) the loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing.
Consolidated Net Income for any period means the consolidated net income (or loss) attributable to the Company for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person that is not a Restricted Subsidiary, except (i) to the extent such income has actually been distributed in cash to the Company or any Restricted Subsidiary during such period and (ii) in the case of the Existing Joint Ventures, for other equity of the Company and its Restricted Subsidiaries in the earnings of the Existing Joint Ventures in excess of the amount included pursuant to clause (1)(i) so long as the amount included in this clause (1)(ii) for any period does not exceed 6.0% of Consolidated EBITDA for such period,
(2) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP,
(3) the cumulative effect of any change in accounting principles, and
(4) gains and losses from dispositions of assets outside the ordinary course of business or upon early retirement of Debt.
Consolidated Net Leverage Ratio means, on any date, the ratio, determined on a Pro Forma Basis, of (a) Consolidated Funded Debt on such date, minus (i) unrestricted cash and Cash Equivalents of the Company and the Guarantors (it being agreed that cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Debt or (y) to the extent proceeds of Debt Incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Debt shall be considered unrestricted to the extent the related Debt is included in Consolidated Funded Debt) and (ii) to the extent not prohibited from being distributed to the Company or any Guarantor pursuant to any applicable law, contractual obligation or organizational document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Guarantors (it being agreed that cash or Cash Equivalents segregated or held in escrow to prepay Debt or to consummate an acquisition shall be considered unrestricted) to (b) Consolidated EBITDA for the period of four
-8-
consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date for which internal financial statements are available at such time).
Consolidated Secured Net Leverage Ratio means, on any date, the ratio, determined on a Pro Forma Basis, of (a) Consolidated Funded Debt on such date that is secured by any Lien on any assets of the Company or a Restricted Subsidiary, minus (i) unrestricted cash and Cash Equivalents of the Company and the Guarantors (it being agreed that cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Debt or (y) to the extent proceeds of Debt Incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Debt shall be considered unrestricted to the extent the related Debt is included in Consolidated Funded Debt) and (ii) to the extent not prohibited from being distributed to the Company or any Guarantor pursuant to any applicable law, contractual obligation or organizational document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Guarantors (it being agreed that cash or Cash Equivalents held in escrow to prepay Debt Incurred to consummate an acquisition shall be considered unrestricted) to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date for which internal financial statements are available at such time).
Consolidated Total Assets means, as of any date of determination, the total assets of the Company and its Restricted Subsidiaries on a consolidated basis (measured as of the last day of the fiscal quarter most recently ended prior to such date of determination for which internal financial statements are available).
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlled has a meaning correlative thereto.
Credit Facilities means, with respect to the Company or any Restricted Subsidiary, one or more debt facilities or commercial paper facilities (including related guarantees and including indentures and note purchase agreements) with banks, investment banks, insurance companies, mutual funds or other institutional lenders (including the Senior Secured Credit Facilities), providing for revolving credit loans, term loans or notes or trade or standby letters of credit, in each case together with any Refinancing thereof on any basis so long as such Refinancing constitutes Debt.
Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
Debt means, as of any date of determination with respect to any Person, without duplication: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) the maximum amount available to be drawn under letters of credit (including standby and commercial) and bankers acceptances, including unpaid reimbursement obligations in respect of drawn amounts under letters of credit or bankers acceptance facilities; (c) all Attributable Debt and Capital Lease Obligations and attributable indebtedness under synthetic leases, account receivables securitization programs, off-balance sheet loans or similar off-balance sheet financing products; (d) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business); (e) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments, and trade debt Incurred in the ordinary course of business) which would appear as liabilities on a balance sheet; (f) all Disqualified Equity Interests issued by such Person; (g) all net obligations of such Person under Swap Contracts; (h) all guarantees with respect to outstanding Debt of the type specified in clauses (a) through (g) above of another person; (i) all Debt of the type specified in clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; provided that if such Person has not assumed such obligations, then the amount of Debt of such Person for purposes of this clause (i) shall be
-9-
equal to the lesser of the amount of the obligations of the holder of such obligations and the Fair Market Value of the assets of such Person which secure such obligations; and (j) all Debt of the types referred to in clauses (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity organized under the laws of a jurisdiction other than the United States or a state thereof) in which such Person is a general partner or joint venturer, except to the extent that Debt is expressly made non-recourse to such Person.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default will be deemed to be cured if such previous Default is cured prior to becoming an Event of Default.
Definitive Note means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.07(c) hereof, substantially in the form of Exhibit A except that such Note shall not bear the Global Notes Legend and shall not have the Schedule of Increases or Decreases in Global Note attached thereto.
Depositary means, with respect to the Notes issuable or issued in whole or in part in global form, any Person specified in Section 2.04 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
Designated Non-Cash Consideration means the Fair Market Value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officers Certificate, setting forth such valuation, less the amount of cash or cash equivalents received by the Company or a Restricted Subsidiary (other than from the Company or a Restricted Subsidiary) in connection with a subsequent Asset Sale of such Designated Non-Cash Consideration.
Disqualified Equity Interest Dividends means all dividends with respect to Disqualified Equity Interests of the Company held by Persons other than a Restricted Subsidiary.
Disqualified Equity Interests means any Equity Interest that, by its terms (or by the terms of any other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests and other than as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes), or (c) is or becomes convertible into or exchangeable for Debt or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Stated Maturity of the Notes at the time of issuance of such Equity Interests, but only with respect to that portion of the Equity Interests that would satisfy clauses (a) through (c) prior to the date that is ninety-one (91) days after the Stated Maturity of the Notes at the time of issuance of such Equity Interests; provided that (x) if such Equity Interests are issued pursuant to a plan for the benefit of employees of the Company or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Company or its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations and (y) if such Equity Interests are held by any future, present or former employee, director, officer, manager, member of management or consultant (or their respective Affiliates or immediate family members) of the Company or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.
Dollar Equivalent means, with respect to any monetary amount in a currency other than U.S. dollars, at any time for the determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published by the Federal Reserve Board on the date of such determination.
-10-
Domestic Subsidiary means any Subsidiary of the Company that is incorporated or organized under the laws of the United States, any state thereof or the District of Columbia.
DTC means The Depository Trust Company.
Equity Interest Sale Proceeds means the aggregate net proceeds (including the Fair Market Value of marketable securities or other property other than cash) received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or the Subsidiary for the benefit of their employees) by the Company of its Equity Interests (other than Disqualified Equity Interests) after the Issue Date, net of attorneys fees, accountants fees, initial purchasers or placement agents fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with the issuance or sale and net of taxes paid or payable as a result thereof.
Equity Interests means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination, in any case other than Debt securities convertible into or exchangeable for such capital stock or other ownership or profit interests or warrants, options or other rights for the purchase or acquisition of such capital stock or other ownership or profit interests.
Equity Offering means any public or private sale of common stock or Preferred Stock of the Company (excluding Disqualified Equity Interests), other than (1) public offerings with respect to any of the Companys common stock registered on Form S-4 or Form S-8 (or any successor form) and (2) issuances to any Subsidiary of the Company.
Euroclear means Euroclear Bank S.A./N.V., as operator of the Euroclear system, or any successor securities clearing agency.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Existing Joint Ventures means Lamb-Weston/Meijer v.o.f., Lamb-Weston/RDO Frozen, Inc., and Lamb Weston BSW, LLC.
Fair Market Value means with respect to any Property or liability, the fair market value of such Property or liability as determined in good faith by the Company (including as to the fair market value of all non-cash Properties and liabilities).
Foreign Restricted Subsidiary means (a) any Restricted Subsidiary that is organized and existing under the laws of a jurisdiction other than the United States, any State thereof or the District of Columbia, (b) any direct or indirect Restricted Subsidiary of a Foreign Restricted Subsidiary described in clause (a), and (c) any Restricted Subsidiary incorporated or otherwise organized under the laws of the United States or any State thereof or the District of Columbia that has no material assets other than Equity Interests in one or more Foreign Restricted Subsidiaries described in clause (a).
Foreign Subsidiary means any direct or indirect Subsidiary that is not a Domestic Subsidiary.
Form 10 means the registration statement on Form 10 of the Company, filed with the SEC on July 13, 2016 and as amended through October 17, 2016.
-11-
GAAP means United States generally accepted accounting principles as in effect on the Issue Date, including those set forth in the Accounting Standards Codification of the Financial Accounting Standards Board and in the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act.
Global Notes means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A, issued in accordance with Section 2.01, 2.07(b) or 2.07(d) hereof.
Global Notes Legend means the legend set forth in Section 2.07(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.
Guarantee means the guarantee by any Guarantor of the Companys obligations under this Indenture and the Notes.
guarantee means, 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 Debt of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (a) to purchase any such Debt or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or purchase of any such Debt or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements or similar agreements or arrangements) for the benefit of any holder of Debt of such other Person, (c) to lease or purchase assets, securities or services primarily for the purpose of assuring the holder of such Debt, or (d) to otherwise assure or hold harmless the holder of such Debt against loss in respect thereof. The amount of any guarantee shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Debt in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term guaranteed has a meaning correlative thereto.
Guarantor means each Restricted Subsidiary of the Company that executes this Indenture on the Issue Date and each other Restricted Subsidiary of the Company that thereafter guarantees the Notes pursuant to the terms of this Indenture.
Holder means the Person in whose name the Note is registered on the Note register described in Section 2.04.
Incur means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee or become liable in respect of that Debt or other obligation or the recording, as required pursuant to GAAP or otherwise, of any Debt or obligation on the balance sheet of that Person (and Incurrence and Incurred shall have meanings correlative to the foregoing); provided , however , that a change in GAAP that results in an obligation of that Person that exists at such time, and is not theretofore classified as Debt, becoming Debt shall not be deemed an Incurrence of that Debt; provided further , however , that any Debt or other obligations of a Person existing at the time the Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by that Subsidiary at the time it becomes a Subsidiary; and provided further , however , that solely for purposes of determining compliance with Section 4.04, the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Debt, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preferences and increases in the amount of Debt outstanding solely as a result of fluctuations in the applicable Dollar Equivalent amount of any Debt will not be deemed to be an Incurrence of Debt, provided that in the case of Debt sold at a discount or at a premium, the amount of the Debt Incurred shall at all times be the aggregate principal amount at Stated Maturity.
Indenture means this Indenture as amended or supplemented from time to time.
-12-
Indirect Participant means a Person who holds a beneficial interest in a Global Note through a Participant.
Initial Notes has the meaning in the second paragraph of the preamble.
Investment by any Person means any direct or indirect loan (other than advances to customers and suppliers in the ordinary course of business), advance or other extension of credit or capital contribution (by means of transfers of cash or other Property to others or payments for Property or services for the account or use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase or acquisition of Equity Interests, bonds, notes, debentures or other securities or evidence of Debt issued by, any other Person. For purposes of Section 4.05, Section 4.10 and the definitions of Restricted Payment and Permitted Investment, an Investment shall include the portion (proportionate to the Companys equity interest in the Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that the Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of that Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary of an amount (if positive) equal to:
(a) the Companys Investment in that Subsidiary at the time of such redesignation, less
(b) the portion (proportionate to the Companys equity interest in such Subsidiary) of the Fair Market Value of the net assets of that Subsidiary at the time of such redesignation.
In determining the amount of any Investment made by transfer of any Property other than cash, the Property shall be valued at its Fair Market Value at the time of the Investment.
Investment Grade Rating means a rating of the Notes of at least Baa3 by Moodys and at least BBB- by S&P (or, if either such Rating Agency shall cease to provide such a rating of the Notes, an equivalent rating from a replacement Rating Agency).
Issue Date means November 9, 2016.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York or at a place of payment.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Limited Condition Acquisition means any acquisition, including by means of a merger, amalgamation or consolidation, by the Company or one or more of its Restricted Subsidiaries, the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Company or its Restricted Subsidiaries to the seller or target if financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement in respect thereof.
Moodys means Moodys Investors Service, Inc. and any successor thereto.
Net Available Cash from any Asset Sale means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, including after release from any required escrow, but excluding any other consideration received in the form of assumption by the acquiring Person of Debt or other obligations relating to the Property that is the subject of that Asset Sale or received in any other non-cash form), in each case net of:
-13-
(a) all legal, title and recording tax expenses, commissions and other fees (including, without limitation, brokers or investment bankers commissions or fees) and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or reasonably expected to be paid or accrued as a liability under GAAP, as a consequence of the Asset Sale,
(b) all payments made on any Debt that is secured by any Property subject to the Asset Sale, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to that Property, or which must by its terms, or in order to obtain a necessary consent to the Asset Sale, or by applicable law, be repaid out of the proceeds from the Asset Sale,
(c) all distributions and other payments required to be made to noncontrolling interest holders in Subsidiaries or joint ventures as a result of the Asset Sale,
(d) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the Property disposed in the Asset Sale and retained by the Company or any Restricted Subsidiary after the Asset Sale, and
(e) payments of unassumed liabilities (not constituting Debt) relating to the Property that is the subject of the Asset Sale at the time of, or within 30 days after, such Asset Sale.
Non-U.S. Person means a Person who is not a U.S. Person.
Notes has the meaning in the second paragraph of the preamble.
Notes Custodian means the Trustee, as custodian with respect to the Global Notes, or any successor entity thereto.
Obligations means, with respect to any Debt, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to the documentation governing such Debt.
Offering Circular means the offering circular, dated November 1, 2016, relating to the offering of the Initial Notes.
Officer means the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Assistant Treasurer, the Secretary or the Assistant Secretary of the Company.
Officers Certificate means a certificate signed by an Officer of the Company and delivered to the Trustee.
Opinion of Counsel means a written opinion from legal counsel which is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.
Pari Passu Debt means: (a) with respect to the Company, the Notes and any Debt which ranks pari passu in right of payment to the Notes (including the 2026 Notes); and (b) with respect to any Guarantor, its Guarantee and any Debt which ranks pari passu in right of payment to such Guarantors Guarantee (including its guarantee of the 2026 Notes).
Participant means, with respect to the Depositary, a Person who has an account with the Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).
Permitted Business means any business that is reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged in on the Issue Date.
-14-
Permitted Encumbrances means:
(a) Liens imposed by law for taxes that are not yet delinquent or are being contested in good faith;
(b) carriers, warehousemens, mechanics, materialmens, repairmens, landlords and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith;
(c) pledges and deposits under workers compensation, unemployment insurance and other social security laws or regulations;
(d) deposits or pledges to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments (or appeal or surety bond relating to such judgments) that do not constitute an Event of Default;
(f) easements, zoning restrictions, licenses, title restrictions, rights-of-way and similar encumbrances on real property imposed by law or incurred or granted by the Company or any Subsidiary in the ordinary course of business that do not secure any material monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Company or any Subsidiary; and
(g) minor imperfections in title that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Company or any Subsidiary;
provided that the term Permitted Encumbrances shall not include any Lien securing Debt for borrowed money.
Permitted Investments means:
(1) any Investment by the Company or any of its Restricted Subsidiaries in the Company or any of its Restricted Subsidiaries;
(2) any Investment in cash or Cash Equivalents and Investments that were Cash Equivalents when made;
(3) any Investment by the Company or any of its Restricted Subsidiaries in a Person if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,
and, in each case, any Investment held by such Person at the time such Person becomes a Restricted Subsidiary; provided , that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation, amalgamation, transfer or conveyance;
(4) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.07 or any other disposition of assets not constituting an Asset Sale;
-15-
(5) any Investment (a) existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date, (b) made pursuant to the Transaction Agreements or (c) consisting of any replacement, refinancing, extension, modification or renewal of any Investment existing on the Issue Date or made pursuant to the Transaction Agreements; provided that the amount of any such Investment may only be increased (i) as required by the terms of such Investment as in existence on the Issue Date, or (ii) as otherwise permitted under the applicable indenture;
(6) any Investment acquired by the Company or any of its Restricted Subsidiaries:
(a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable;
(b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or
(c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates of the Company;
(7) Swap Contracts permitted under clause (g) of the second paragraph of Section 4.04;
(8) Investments (a) the payment for which consists of Equity Interests (exclusive of Disqualified Equity Interests) of the Company or (b) made using the proceeds of a substantially concurrent offering (with any offering completed within 90 days deemed as being substantially concurrent) of Equity Interests (other than Disqualified Equity Interests) of the Company; provided , however , that such Investment or proceeds, as applicable, will be excluded from the calculation of Equity Interest Sale Proceeds;
(9) guarantees of Debt permitted under Section 4.04;
(10) Investments consisting of (a) purchases and acquisitions of inventory, supplies, material, services or equipment, or other similar assets or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business or (b) non-exclusive licensing of intellectual property in the ordinary course of business or the leasing, licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(11) additional Investments in an aggregate amount (based on the original cost thereof and without giving effect to subsequent changes in value) taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed the greater of (x) $300.0 million and (y) 12.00% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the making of such Investment for which internal financial statements are available at such time), provided that if such Investment is in Equity Interests of a Person that subsequently becomes a Restricted Subsidiary, such Investment shall thereafter be deemed made under clause (1) or (3) above and shall not be included as having been made pursuant to this clause (11);
(12) advances to, or guarantees of Debt of, officers, directors and employees of the Company or its Subsidiaries not in excess of $10.0 million outstanding at any one time, in the aggregate;
(13) loans and advances to officers, directors and employees of the Company or its Subsidiaries for business-related travel expenses, moving expenses, payroll expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practice or to fund such Persons direct or indirect purchase of Equity Interests of the Company;
(14) any Investment in any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;
-16-
(15) endorsements for collection or deposit in the ordinary course of business;
(16) Investments resulting from pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or that are made in connection with Permitted Liens;
(17) advances, prepayments, loans or extensions of credit to customers and suppliers in the ordinary course of business;
(18) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(19) operating deposit accounts with depository institutions and other ordinary course cash management; and
(20) deposits to secure bids, tenders, utilities, vendors, leases, licenses, statutory obligations, surety and appeal bonds, performance bonds and other deposits of like nature arising in the ordinary course of business;
(21) investments by any Receivables Financing SPC, the Company or any Restricted Subsidiary in a Receivables Financing SPC in each case made in connection with a Permitted Receivables Financing, and loans permitted by the applicable Permitted Receivables Financing that are made by the Company or a Restricted Subsidiary to a Receivables Financing SPC or by a Receivables Financing SPC to the Company or a Restricted Subsidiary in connection therewith;
(22) Investments consisting of non-cash consideration received in any Asset Sale;
(23) Investments in prepaid expenses, utility and workers compensation, performance and other similar deposits, each as entered into in the ordinary course of business;
(24) Investments consisting of the licensing, sublicensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons; and
(25) the Transactions.
Permitted Liens means:
(a) Liens to secure Debt (i) permitted to be Incurred under clause (b) of the second paragraph of Section 4.04 regardless of whether the Company and the Restricted Subsidiaries are actually subject to Section 4.04 at the time the Lien is Incurred and (ii) in respect of any guarantee by the Company or any Restricted Subsidiary of Debt permitted by clause (l)(y) of the second paragraph of Section 4.04;
(b) Permitted Encumbrances;
(c) Liens securing Swap Contracts permitted by clause (g) of the second paragraph of Section 4.04;
(d) Liens on the Property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, including bankers liens and rights of set-off, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of Property and which do not in the aggregate impair in any material respect the use of Property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole;
-17-
(e) Liens on Property at the time the Company or any Restricted Subsidiary acquired the Property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided , however , that any Lien of this kind may not extend to any other Property of the Company or any Restricted Subsidiary other than additions thereto and proceeds and products thereof; provided further , however , that the Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which the Property was acquired by the Company or any Restricted Subsidiary;
(f) Liens on the Property of a Person at the time that Person becomes a Restricted Subsidiary; provided , however , that any Lien of this kind may not extend to any other Property of the Company or any other Restricted Subsidiary other than additions thereto and proceeds and products thereof; provided further , however , that the Lien was not Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which the Person became a Restricted Subsidiary;
(g) pledges or deposits by the Company or any Restricted Subsidiary under workers compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Restricted Subsidiary is party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits for the payment of rent, in each case Incurred in the ordinary course of business;
(h) Liens, assignments and pledges of rights to receive premiums, interest or loss payments or otherwise arising in connection with workers compensation loss portfolio transfer insurance transactions or any insurance or reinsurance agreements pertaining to losses covered by insurance, and Liens (including, without limitation and to the extent constituting Liens, negative pledges) in favor of insurers or reinsurers on pledges or deposits by the Company or any Restricted Subsidiary under workmens compensation laws, unemployment insurance laws or similar legislation;
(i) utility easements, building restrictions and such other encumbrances or charges against real Property as are of a nature generally existing with respect to properties of a similar character;
(j) Liens to secure Debt permitted by clause (c) of the second paragraph of Section 4.04; provided that such Liens attach only to the assets acquired, constructed or improved with the proceeds of the applicable Debt (or the Debt refinanced with Permitted Refinancing Debt) and additions thereto and products and proceeds thereof;
(k) Liens in favor of surety bonds or letters of credit issued pursuant to the request of and for the account of the Company or a Restricted Subsidiary in the ordinary course of its business, provided that these letters of credit do not constitute Debt;
(l) leases or subleases of real property granted by the Company or a Restricted Subsidiary to any other Person in the ordinary course of business and not materially impairing the use of the real property in the operation of the business of the Company or the Restricted Subsidiary;
(m) Liens on intellectual property arising from intellectual property licenses entered into in the ordinary course of business;
(n) Liens attaching to or related to joint ventures, restricting Liens on interests in those joint ventures;
(o) Liens existing on the Issue Date not otherwise described in clause (a) above;
(p) Liens on (x) the Property of any Foreign Restricted Subsidiary to secure any Debt permitted to be Incurred by the Foreign Restricted Subsidiary pursuant to Section 4.04 and (y) the Property of the Company or any Restricted Subsidiary to secure any Debt permitted to be Incurred under clause (k) of such Section;
-18-
(q) Liens on the Property of the Company or any Restricted Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured by Liens referred to in clause (e), (f) or (o) above; provided , however , that any Lien of this kind shall be limited to all or part of the same Property that secured the original Lien (together with improvements and accessions to such Property) and the aggregate principal amount of Debt that is secured by the Lien shall not be increased to an amount greater than the sum of:
(1) the outstanding principal amount of the Debt secured by Liens described under clause (e), (f) or (o) below, as the case may be, at the time the original Lien became a Permitted Lien under this Indenture, and
(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, incurred by the Company or the Restricted Subsidiary in connection with the Refinancing;
(r) Liens not otherwise permitted by clauses (a) through (q) above securing Debt permitted by Section 4.04, so long as on a Pro Forma Basis (but excluding the cash proceeds of such Debt for purposes of calculating the Consolidated Secured Net Leverage Ratio), the Consolidated Secured Net Leverage Ratio does not exceed 1.50 to 1.00;
(s) Liens on cash or Cash Equivalents deposited with the Trustee or similar agent for the holders of any Debt pending the payment, purchase, defeasance or other retirement of such Debt in connection with a Refinancing;
(t) Liens not otherwise permitted by clauses (a) through (s) above securing Debt and other obligations in an aggregate principal amount not in excess of the greater of (i) $100.0 million and (ii) 4.5% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(u) leases, licenses, subleases or sublicenses and Liens on the property covered thereby, in each case, granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Company or any Restricted Subsidiary, taken as a whole, or (ii) secure any Debt;
(v) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Company or any Restricted Subsidiary in the ordinary course of business permitted by this Indenture;
(w) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts Incurred in the ordinary course of business and not for speculative purposes;
(x) Liens that are contractual rights of set-off or rights of pledge (i) relating to the establishment of depository relations with banks or other deposit-taking financial institutions and not given in connection with the issuance of Debt, (ii) relating to pooled deposit or sweep accounts of the Company or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations Incurred in the ordinary course of business of the Company or any of the Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of any Restricted Subsidiary in the ordinary course of business;
(y) Liens on any cash earnest money deposits made by the Company or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Indenture;
-19-
(z) Liens consisting of an agreement to dispose of any Property in a sale, transfer, lease, license or other disposition permitted under this Indenture, to the extent that such sale, transfer, lease, license or other disposition would have been permitted on the date of the creation of such Lien;
(aa) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(bb) Liens on specific items of inventory or other goods and the proceeds thereof securing such Persons obligations in respect of documentary letters of credit or bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;
(cc) Liens on Property subject to any Sale and Leaseback Transaction permitted under this Indenture and general intangibles related thereto; and
(dd) Liens securing obligations under Swap Contracts in a net amount not to exceed $50.0 million.
Permitted Receivables Financing means any one or more receivables financings in which (a) the Company or any Restricted Subsidiary (i) conveys or sells any accounts (as defined in the Uniform Commercial Code as in effect in the State of New York), payment intangibles (as defined in the Uniform Commercial Code as in effect in the State of New York), notes receivable or residuals (collectively, together with certain property relating thereto and the right to collections thereon and any proceeds thereof, being the Transferred Assets) to any Person that is not a Subsidiary or Affiliate of the Company (with respect to any such transaction, the Receivables Financier), (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets and/or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to the Receivables Financier or (b) the Company or any Restricted Subsidiary sells, transfers, conveys or otherwise contributes any Transferred Assets to a Receivables Financing SPC, which Receivables Financing SPC then (i) conveys or sells any such Transferred Assets (or an interest therein) to another Receivables Financier, (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to such Receivables Financier; provided that, as to either clause (a) or (b), (A) the aggregate Attributed Principal Amount for all such financings shall not at any one time exceed $100.0 million and (B) such financings shall not involve any recourse to the Company or any Restricted Subsidiary (other than a Receivables Financing SPC) for any reason other than (v) repurchases of non-eligible assets, (w) indemnifications for losses or dilution other than credit losses related to the Transferred Assets, (x) any obligations not constituting Debt under servicing arrangements for the receivables, (y) any interest rate swaps or currency swaps permitted hereunder and entered into in connection with a Permitted Receivables Financing on a back to back basis with swaps entered into by a Receivables Financing SPC or (z) representations, warranties, covenants, indemnities and guarantees of performance entered into by the Company or any Restricted Subsidiary which the Company has determined in good faith to be customary in a non-recourse receivables financing.
Permitted Refinancing Debt means any Debt that Refinances any other Debt, including any successive Refinancings, so long as:
(a) the new Debt is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:
(1) the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Debt being Refinanced, and
(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, related to the Refinancing,
-20-
(b) the Average Life of the new Debt is equal to or greater than the Average Life of the Debt being Refinanced,
(c) the Stated Maturity of the new Debt is no earlier than the Stated Maturity of the Debt being Refinanced, and
(d) the new Debt shall not be senior in right of payment to the Debt that is being Refinanced;
provided , however , that Permitted Refinancing Debt shall not include:
(x) Debt of a Subsidiary that is not a Guarantor that Refinances Debt of the Company or a Guarantor, or
(y) Debt of the Company or a Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
Person means any individual, corporation, company (including any limited liability company), association, partnership, joint venture, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Preferred Stock means any Equity Interests of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of that Person, over shares of any other class of Equity Interests issued by that Person.
Preferred Stock Dividends means all dividends with respect to Preferred Stock of Restricted Subsidiaries held by Persons other than the Company or a Restricted Subsidiary.
principal of any Debt (including the Notes) means the principal amount of such Debt plus the premium, if any, on such Debt.
Productive Assets means assets (other than securities and inventory) that are used or usable by the Company and its Restricted Subsidiaries in Permitted Businesses.
Pro Forma Basis means, with respect to compliance with any test or covenant hereunder, that all Specified Transactions occurring prior to the end of the applicable measurement period (and following the last day of such measurement period and on or prior to the applicable date of determination) and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant and: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a disposition of all or substantially all Equity Interests in any Subsidiary of the Company owned by the Company or any of its Subsidiaries or any division or line of business, shall be excluded, and (ii) in the case of an acquisition or investment described in the definition of Specified Transaction, shall be included, (b) any retirement of Debt and (c) any Debt Incurred or assumed by the Company or any of the Subsidiaries in connection therewith and if such Debt has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Debt as at the relevant date of determination; provided that, any cost savings adjustments in connection therewith shall be subject to the limitations set forth in clause (b)(iv) of the definition of Consolidated EBITDA.
Property means, with respect to any Person, any interest of that Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including Equity Interests in, and other securities of, any other Person. For purposes of any calculation required pursuant to this Indenture, the value of any Property shall be its Fair Market Value.
Purchase Money Debt means Debt:
-21-
(a) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds, in each case where the maturity of the Debt does not exceed the anticipated useful life of the Property being financed, and
(b) Incurred to finance the acquisition, construction or lease by the Company or a Restricted Subsidiary of the Property, including additions and improvements thereto;
provided , however , that the Debt is Incurred within 180 days after the acquisition, construction or lease of the Property by the Company or Restricted Subsidiary.
QIB means a qualified institutional buyer as defined in Rule 144A.
Qualified Equity Interests means any Equity Interests of the Company that is not Disqualified Equity Interests.
Rating Agency means each of Moodys and S&P; provided that if either such agency shall cease to provide ratings of the Notes for reasons beyond the Companys control, then such term shall also include any replacement credit ratings agency of nationally recognized standing that is selected by the Company.
Receivables Financier has the meaning set forth in the definition of Permitted Receivables Financing.
Receivables Financing SPC means (1) a wholly owned direct Subsidiary of the Company which engages in no activities other than in connection with the financing of Transferred Assets pursuant to a Permitted Receivables Financing that meets the following criteria: (a) no portion of the Debt or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any other Restricted Subsidiary of the Company (excluding guarantees of obligations (other than the principal of, and interest on, Debt)) pursuant to customary securitization undertakings, (ii) is recourse to or obligates the Company or any other Restricted Subsidiary of the Company in any way (other than pursuant to customary securitization undertakings) or (iii) subjects any property or asset (other than the Transferred Assets) of the Company or any other Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to customary securitization undertakings, (b) with which neither the Company nor any of its other Restricted Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Financing documentation (including with respect to the servicing of the accounts receivable and related assets and the administration of the Receivables Financing SPC)) on terms less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Company (as determined by the Company in good faith), and (c) to which neither the Company nor any other Restricted Subsidiary of the Company has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results and (2) each general partner of any such Subsidiary described in clause (1) that meets all of the criteria set forth in clause (1).
Refinance means, in respect of any Debt, to refinance, extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other Debt, in exchange or replacement for, that Debt. Refinanced and Refinancing shall have correlative meanings.
Regulation S means Regulation S promulgated under the Securities Act.
Regulation S Global Note means a Global Note in the form of Exhibit A bearing the Global Notes Legend and the Restricted Note Legend and the Regulation S Global Notes Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Global Notes.
Regulation S Global Notes Legend means the legend set forth in Section 2.07(g)(iii) hereof.
-22-
Repay means, in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease, satisfy and discharge or otherwise retire that Debt. Repaid shall have a correlative meaning. For purposes of Section 4.07, Debt shall be considered to have been Repaid only to the extent the related loan commitment, if any, shall have been permanently reduced in connection therewith.
Restricted Definitive Note means a Definitive Note bearing, or that is required to bear, the Restricted Notes Legend.
Restricted Global Note means a Global Note bearing, or that is required to bear, the Restricted Notes Legend.
Restricted Investment means any Investment by the Company or a Restricted Subsidiary other than a Permitted Investment.
Restricted Notes Legend means the legend set forth in Section 2.07(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.
Restricted Payment means:
(a) any dividend or distribution (whether made in cash, securities or other Property) declared or paid on or with respect to any shares of Equity Interests of the Company or any Restricted Subsidiary (including any payment in connection with any merger or consolidation with or into the Company or any Restricted Subsidiary), except for any dividend or distribution that is made to the Company or the parent of the Restricted Subsidiary or any dividend or distribution payable solely in shares of Qualified Equity Interests of the Company;
(b) the purchase, repurchase, redemption, acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary (other than from the Company or any Restricted Subsidiary) (other than a purchase, repurchase, redemption, acquisition or retirement in which the consideration consists of Qualified Equity Interests of the Company);
(c) the purchase, repurchase, redemption, acquisition or retirement for value, prior to the date for any scheduled maturity, sinking fund or amortization or other installment payment, of any Subordinated Obligation (other than (i) the purchase, repurchase or other acquisition of any Subordinated Obligation purchased in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of acquisition and (ii) Debt permitted under clause (d) of the definition of Permitted Debt); or
(d) the making of any Restricted Investment.
Restricted Period means, in respect of any Note issued under Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.
Restricted Subsidiary means any Subsidiary of the Company other than an Unrestricted Subsidiary.
Rule 144A means Rule 144A promulgated under the Securities Act.
Rule 903 means Rule 903 promulgated under the Securities Act.
Rule 904 means Rule 904 promulgated under the Securities Act.
S&P means Standard & Poors Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.
-23-
Sale and Leaseback Transaction means any direct or indirect arrangement relating to Property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers that Property to another Person and the Company or a Restricted Subsidiary leases it from that other Person together with any Refinancings thereof.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Senior Secured Credit Facilities means the credit facilities provided pursuant to that certain credit agreement, dated as of the Issue Date, by and among the Company, the Guarantors, Bank of America, N.A., as administrative agent, the lenders party thereto from time to time, and the other parties thereto.
Significant Subsidiary means any Subsidiary that would be a Significant Subsidiary of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
Specified Sales means sales of (a) inventory and materials in the ordinary course of business, (b) surplus, obsolete or worn-out Property, (c) cash or Cash Equivalents, (d) Equity Interests or Debt of Unrestricted Subsidiaries, (e) accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and (f) property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such sale are applied substantially concurrently with such sale to the purchase price of similar replacement property.
Specified Transaction means any of the following: (i) any Investment by the Company or any Restricted Subsidiary in any Person (including any acquisition) other than a Person that was a Wholly Owned Restricted Subsidiary on the first day of such period involving (w) an investment in an Unrestricted Subsidiary, (x) the acquisition of a new Restricted Subsidiary or interest in a joint venture, (y) an increase in the Companys and its Restricted Subsidiaries consolidated economic ownership of a Restricted Subsidiary or (z) the acquisition of a product line or business unit, (ii) any Asset Sale involving (x) the disposition of Equity Interests of a Subsidiary or joint venture (other than to the Company or a Subsidiary) or (y) the disposition of a product line or business unit, (iii) any Incurrence or repayment of Debt (in each case, other than revolving indebtedness in the ordinary course of business under revolving credit facilities), (iv) any Restricted Payment in respect of the Companys Equity Interests, (v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or designation of an Unrestricted Subsidiary to be a Restricted Subsidiary and (vi) any other transaction specifically required to be given effect to on a Pro Forma Basis.
Spinoff means the distribution of 100% of the issued Equity Interests of the Company to the holders of the common stock of ConAgra on the Issue Date as described in the Form 10.
Stated Maturity means, with respect to any security, the date specified in the security as the fixed date on which the payment of principal of the security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of the security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless that contingency has occurred).
Subordinated Obligation means any Debt of the Company or a Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Notes pursuant to a written agreement to that effect.
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary or Subsidiaries of the Company.
Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity
-24-
index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.
TIA means the Trust Indenture Act of 1939, as amended.
Transaction Agreements means the tax matters agreement, the employee matters agreement, the transition services agreement and each of the other agreements entered into among ConAgra and/or certain of its subsidiaries (after giving effect to the Spinoff), on the one hand, and the Company and/or certain of its Subsidiaries, on the other, in each case, as contemplated by the Form 10 at or prior to the time of the Spinoff, in each case, on terms that are not less favorable in any material respect, taken as a whole, than the terms contemplated by the Form 10.
Transactions means the execution, delivery and performance by the Company and the Guarantors of the Senior Secured Credit Facilities, the borrowing of loans and other credit extensions of credit on the Issue Date under the Senior Secured Credit Facilities, the issuance of the Notes and the 2026 Notes, the payment to ConAgra of approximately $823.5 million on the Issue Date, the entering into of the Transaction Agreements, the Spinoff and the other transactions in connection therewith to occur on or prior to the Issue Date.
Transferred Assets has the meaning set forth in the definition of Permitted Receivables Financing.
Treasury Rate means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to November 1, 2021; provided , however , that if the period from the redemption date to November 1, 2021 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used. On the second Business Day preceding the applicable redemption date, the Company will (1) calculate the Treasury Rate and (2) file with the Trustee an Officers Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.
Trust Officer means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs such functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
Trustee means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code means the New York Uniform Commercial Code as in effect from time to time.
United States means the United States of America (including the states and the District of Columbia) and its territories, possessions and other areas subject to its jurisdiction.
-25-
Unrestricted Definitive Note means a Definitive Note that does not bear and is not required to bear the Restricted Notes Legend.
Unrestricted Global Note means a permanent Global Note, substantially in the form of Exhibit A that bears the Global Notes Legend and that has the Schedule of Increases or Decreases in Global Note attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Restricted Notes Legend.
Unrestricted Subsidiary means:
(a) any Subsidiary of the Company that is designated after the Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to Section 4.10 and is not thereafter redesignated as a Restricted Subsidiary as permitted pursuant thereto; and
(b) any Subsidiary of an Unrestricted Subsidiary.
U.S. Government Obligations means direct non-callable obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
U.S. Person means a U.S. person as defined in Rule 902(k) under the Securities Act.
Voting Stock of any Person means all classes of Equity Interests or other interests (including partnership interests) of that Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
Wholly Owned Restricted Subsidiary means, at any time, a Restricted Subsidiary all the Voting Stock of which (except directors qualifying shares) is at that time owned, directly or indirectly, by the Company and its other Wholly Owned Subsidiaries.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions .
Term |
Defined in Section | |
Affiliate Transaction |
4.09 | |
Change of Control Offer |
4.12(a) | |
Change of Control Payment Date |
4.12(b)(B) | |
Change of Control Purchase Price |
4.12(a) | |
covenant defeasance option |
8.01(b) | |
Events of Default |
6.01 | |
Excess Proceeds |
4.07(c) | |
Guaranteed Obligations |
10.01(a) | |
LCA Election |
1.05 | |
LCA Test Date |
1.05 | |
legal defeasance option |
8.01(b) | |
Notes Register |
2.04 | |
Offer Amount |
4.07(d)(2) | |
Offer Period |
4.07(d)(2) | |
Paying Agent |
2.04 | |
Permitted Debt |
4.04 | |
Prepayment Offer |
4.07(c) | |
Registrar |
2.04 | |
Successor Company |
5.01(a) | |
Successor Person |
5.01 | |
Suspended Covenants |
4.01 | |
Suspension Period |
4.01 |
-26-
SECTION 1.03. [Reserved] .
SECTION 1.04. Rules of Construction . Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) or is not exclusive;
(4) including means including without limitation;
(5) words in the singular include the plural and words in the plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer thereof dated such date prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater of (i) the maximum liquidation value of such Preferred Stock and (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock.
SECTION 1.05. Limited Condition Acquisitions (1) . Notwithstanding anything in this Indenture to the contrary, when calculating any applicable ratio or determining other compliance with this Indenture (including the determination of compliance with any provision of this Indenture which requires that no Default or Event of Default has occurred and is continuing or would result therefrom) in connection with a transaction undertaken in connection with the consummation of a Limited Condition Acquisition, the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, may, at the option of the Company (the Companys election to exercise such option in connection with any Limited Condition Acquisition, an LCA Election), be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the LCA Test Date) and if, after such ratios and other provisions are measured on a Pro Forma Basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any Incurrence of Debt and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive fiscal quarter period for which internal financial statements are available at such time ending prior to the LCA Test Date, the Company or the applicable Restricted Subsidiary could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such ratios and provisions shall be deemed to have been complied with. For the avoidance of doubt, (x) if any of such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA of the Company) at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related specified transactions. If the Company has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or basket availability with respect to any other transaction on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation
-27-
of such Limited Condition Acquisition, any such ratio or basket shall be calculated (1) on a Pro Forma Basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any Incurrence of Debt and the use of proceeds thereof) have been consummated and (2) on a Pro Forma Basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any Incurrence of Debt and use of proceeds thereof).
ARTICLE II
The Notes
SECTION 2.01. Amount of Notes . The aggregate principal amount of Notes (other than Notes issued pursuant to Section 2.07) which may be authenticated and delivered under this Indenture on the Issue Date is $833,000,000.
The Company may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.04 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture.
With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.14, 3.08, 4.06(c) or 9.04), there shall be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;
(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue; and
(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.07 in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof.
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.
The Initial Notes and any Additional Notes shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.
SECTION 2.02. Form and Dating . Provisions relating to the Initial Notes are set forth in Section 2.07. The (i) Initial Notes and the Trustees certificate of authentication and (ii) any Additional Notes and the Trustees certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof.
-28-
SECTION 2.03. Execution and Authentication . The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by one Officer of the Company (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $833,000,000 and (b) subject to the terms of this Indenture, Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, the registered Holder of each of the Notes and delivery instructions. For the avoidance of doubt, the Company will be required to deliver an Opinion of Counsel with respect to the authentication of the Initial Notes. Notwithstanding anything to the contrary in this Indenture, any issuance of Additional Notes shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.
One Officer of the Company shall sign the Notes for the Company by manual or facsimile signature. The Companys seal may be (but shall not be required to be) impressed, affixed, imprinted or reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a written order of the Company in the form of an Officers Certificate for the authentication and delivery of such Notes, and the Trustee in accordance with such written order of the Company shall authenticate and deliver such Notes.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee may appoint an Authentication Agent reasonably acceptable to the Company to authenticate the Notes. Unless limited by the terms of such appointment, an Authentication Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An Authentication Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent . The Company initially appoints DTC to act as Depositary with respect to the Global Notes. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar) and an office or agency where Notes may be presented for payment (the Paying Agent). The Registrar shall keep a register (the Notes Register) of the Notes and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term Paying Agent includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.
The Company may remove any Registrar or Paying Agent upon five Business Days prior written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective
-29-
until (i) if applicable, acceptance of an appointment by a successor Registrar or Paying Agent, as the case may be, as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05. Paying Agent To Hold Money in Trust . Prior to each due date of the principal and interest on any Note, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary thereof is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holder or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee in writing of any default by the Company in making any such payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holder. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange .
(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.07, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless, and, if applicable, subject to the limitation on issuance of Definitive Notes set forth in Section 2.07(c)(ii), (i) the Depositary (x) notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Company within 120 days, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes (although Regulation S Global Notes may not be exchanged for Definitive Notes prior to (A) the expiration of the applicable Restricted Period and (B) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B)) or (iii) upon the request of a Holder if there shall have occurred and be continuing an Event of Default with respect to the Notes and the Trustee has received a written request from the Depositary to issue Definitive Notes. Upon the occurrence of any of the events described in clause (i), (ii) or (iii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.14 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.07 or Sections 2.08 or 2.14 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events described in clause (i), (ii) or (iii) above and pursuant to Section 2.07(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.07(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.07(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
-30-
(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided , that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.07(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.07(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided , that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in a Regulation S Global Note prior to (x) the expiration of the applicable Restricted Period therefor and (y) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B). Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.07(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.07(b)(ii) hereof and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; or
(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.07(b)(ii) hereof and the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
-31-
(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this Section 2.07(b)(iv), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act
If any such transfer is effected pursuant to Section 2.07(b)(iv) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (iv) above.
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Restricted Global Note . Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .
(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.07(a) hereof and receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or
-32-
(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and, upon receipt of an authentication order, the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c)(i) (except transfers pursuant to clause (F) above) shall bear the Restricted Notes Legend and shall be subject to all restrictions on transfer contained therein
(ii) Beneficial Interests in Regulation S Global Note to Definitive Notes . Notwithstanding Sections 2.07(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the applicable Restricted Period therefor and (B) the receipt by the Registrar of any certifications of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.06(a) hereof and if the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof, or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof,
and, in each such case set forth in this Section 2.07(c)(iii), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.07(a) hereof and satisfaction of the conditions set forth in Section 2.07(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and the Trustee, upon receipt of an authentication order, shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant
-33-
to this Section 2.07(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv) shall not bear the Restricted Notes Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .
(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
-34-
and, in each such case set forth in this Section 2.07(d)(ii), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the applicable conditions of this Section 2.07(d)(ii), the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes:
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to Section 2.07(d)(ii) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred
(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holders compliance with the provisions of this Section 2.07(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.07(e):
(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or;
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
-35-
(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof,
and, in each such case set forth in this subparagraph (D), if the Company so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) [Intentionally Omitted].
(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:
(i) Restricted Notes Legend .
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR ITS SUBSIDIARIES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
-36-
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.07 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Restricted Notes Legend.
(ii) Global Notes Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
(iii) Regulation S Global Notes Legend . Except as permitted by subparagraph (ii)(B) above, each Global Note and Definitive Note issued in a transaction exempt from registration pursuant to Regulation S shall also bear the legend in substantially the following form:
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.10 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
-37-
(i) General Provisions Relating to Transfers and Exchanges .
(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an authentication order in accordance with Section 2.03 hereof or at the Registrars request.
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.08, 2.14, 3.06, 4.07 and 4.12 hereof).
(iii) Neither the Registrar nor the Company shall be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer or exchange of a Note between a record date and the next succeeding interest payment date or (D) to register the transfer or exchange of any Notes tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or a Prepayment Offer.
(iv) Neither the Registrar nor the Company shall be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; provided , that new Notes will only be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.
(v) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, the Registrar, the Notes Custodian, the Paying Agent and the Company shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, the Notes Custodian, the Paying Agent or the Company shall be affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Company designated in this Indenture, the Company shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.
(viii) At the option of the Holder, subject to Section 2.07(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.03 hereof.
(ix) All certifications, certificates and Opinions of Counsel required to be submitted pursuant to this Section 2.07 to effect a registration of transfer or exchange may be submitted by facsimile.
(x) Neither the Trustee nor the Registrar shall have any duty to monitor the Companys compliance with or have any responsibility with respect to the Companys compliance with any federal or state
-38-
securities laws in connection with registrations of transfers and exchanges of the Notes. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Notes (including any transfers between or among the Depositorys participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation, as is expressly required by, and to do so if and when expressly required by, the terms of this Indenture or the Notes and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(xi) The Company, the Trustee, and the Registrar reserve the right to require the delivery by any Holder or purchaser of a Note of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer of any Restricted Global Note or Restricted Definitive Note is being made in compliance with the Securities Act or the Exchange Act, or rules or regulations adopted by the Commission from time to time thereunder, and applicable state securities laws.
SECTION 2.08. Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that such Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee and/or the Authentication Agent, as applicable. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee (and the Paying Agent, Registrar and Authentication Agent, if not the Trustee) to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.09. Outstanding Notes . Notes outstanding at any time are all Notes authenticated by the Trustee, except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 11.04, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Cancellation . The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of all Notes surrendered for registration of transfer, exchange, payment or cancellation in its customary manner. The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation, except pursuant to the terms of this Indenture. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest . If the Company defaults in a payment of interest on the Notes, the Company shall pay the defaulted interest then borne by the Notes (plus interest on such defaulted interest to the
-39-
extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Holders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly deliver or cause to be delivered to each affected Holder (with a copy to the Trustee) a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP, ISIN or Common Code Numbers . The Company in issuing the Notes may use CUSIP, ISIN or Common Code numbers (if then generally in use) and, if so, the Trustee shall use CUSIP, ISIN or Common Code numbers in notices of redemption as a convenience to Holders; provided , however , that neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP, ISIN or Common Code number that appears on any Note, check, advice of payment or redemption notice, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in such numbers.
SECTION 2.13. Calculation of Principal Amount of Notes . The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 11.07 of this Indenture. Any calculation of the Applicable Premium made pursuant to this Indenture or the Notes shall be made by the Company and delivered to the Trustee pursuant to an Officers Certificate. The Trustee shall have no liability or responsibility for any calculation made hereunder or in connection herewith or for any information used in any such calculation.
SECTION 2.14. Temporary Notes . Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee . If the Company elects to redeem Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee in writing of the redemption date, the principal amount of Notes to be redeemed and that such redemption is being made pursuant to paragraph 5 of the Notes.
The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 5 Business Days before the date of giving the notice of redemption pursuant to Section 3.03, unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.
SECTION 3.02. Selection of Notes To Be Redeemed . In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption shall be made on a pro rata basis (subject to the rules of DTC) unless otherwise required by law or applicable stock exchange requirements; provided , however , that such Notes shall only be redeemable in principal amounts of a minimum of $2,000 or an integral multiple of $1,000 in excess thereof. The Trustee shall make the selection from outstanding Notes not previously called for redemption. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Company promptly of the Notes or portions of Notes to be redeemed.
-40-
SECTION 3.03. Notice of Redemption . Notice of redemption shall be mailed by first-class mail (or electronic transmission in the case of Notes held in book-entry form) to each Holder of Notes to be redeemed at its registered address, at least 30 but not more than 60 days before the redemption date, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or a satisfaction and discharge of the Notes.
Notices of redemption may be subject to the satisfaction of one or more conditions precedent established by the Company in its sole discretion, including completion of an Equity Offering or other corporate transaction.
The notice shall identify the Notes to be redeemed (including any CUSIP, Common Code or ISIN numbers and shall state:
(1) the redemption date;
(2) the redemption price or the information specified in clause (c) of paragraph 5 of the Notes;
(3) the name and address of the applicable Paying Agent;
(4) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed;
(6) subject to clauses (8) and (9) below, that, unless the Company defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(7) that no representation is made as to the correctness or accuracy of the CUSIP, ISIN or Common Code number, if any, listed in such notice or printed on the Notes;
(8) whether such notice is conditional and the timeframe for satisfying such conditions; and
(9) if such redemption is subject to satisfaction of one or more conditions precedent, that, in the Companys discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date or by the redemption date so delayed.
At the Companys written request, the Trustee shall give the notice of redemption in the Companys name and at the Companys expense; provided , however , that the Officers Certificate delivered to the Trustee pursuant to Section 3.01 hereof requests that the Trustee give such notice and sets forth the information to be stated in such notice as required by this Section 3.03.
If the Company elects to provide, in lieu of the redemption price, the information specified in clause (c) of paragraph 5 of the Notes in the notice of redemption, the Trustee shall give the notice of the redemption price, in the Companys name and the Companys expense, one Business Day prior to the redemption date.
SECTION 3.04. Effect of Notice of Redemption . Except as contemplated by Section 3.03, once notice of redemption is mailed, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the applicable Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
-41-
SECTION 3.05. Deposit of Redemption Price . On or prior to 10:00 a.m., New York City time, on the Business Day immediately preceding the anticipated redemption date, the Company shall deposit with the applicable Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money in U.S. Dollars sufficient to pay the redemption price of and accrued interest (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption) on all Notes to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Notes Redeemed in Part . If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon surrender for cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption, unless the Company defaults in the payment of the redemption price.
ARTICLE IV
Covenants
SECTION 4.01. Covenant Suspension . During any period of time that:
(a) the Notes have Investment Grade Ratings from both Rating Agencies, and
(b) no Default or Event of Default has occurred and is continuing under this Indenture,
the Company and the Restricted Subsidiaries will not be subject to the following Sections of this Indenture: Section 4.04, Section 4.05, Section 4.07, Section 4.08, Section 4.09, clause (x) of the third paragraph (and as referred to in the first paragraph) of Section 4.10, Section 4.14 and clause (d) of Section 5.01 (collectively, the Suspended Covenants). In the event that the Company and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the preceding sentence (any such period, a Suspension Period) and, subsequently, one or both of the Rating Agencies downgrades the ratings assigned to the Notes below the required Investment Grade Rating, then the Company and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants for all periods after that downgrade; provided that there will not be deemed to have occurred a Default or Event of Default with respect to any Suspended Covenants during the time that the Company and the Restricted Subsidiaries were not subject to the Suspended Covenants (or after that time based solely on events that occurred during a Suspension Period). Notwithstanding the foregoing, the Company may not designate any of its Restricted Subsidiaries to be Unrestricted Subsidiaries during any Suspension Period.
During any Suspension Period, the amount of Excess Proceeds shall be set at zero.
The Company shall promptly notify the Trustee in an Officers Certificate of the existence, and of the termination, of any Suspension Period. The Trustee shall not have any obligation to monitor the ratings of the Notes or the existence or termination of any Suspension Period and may rely conclusively on such Officers Certificate. The Trustee shall not have any obligation to notify the Holders of the existence or termination of any Suspension Period, but may provide a copy of such Officers Certificate to any Holder of Notes upon request.
SECTION 4.02. Payment of Notes . The Company shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the applicable Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.
-42-
The Company shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the rate borne by the Notes to the extent lawful.
SECTION 4.03. SEC Reports . Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC and provide the Trustee and Holders of Notes with annual reports and information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to those Sections, and the information, documents and reports to be so filed and provided at the times specified for the filing of the information, documents and reports under those Sections ( provided that if the Company is not then subject to the reporting requirements of the Exchange Act, then the time periods for filing applicable to the Company shall be that required of a non-accelerated filer and in any case including any extension as would be permitted by Rule 12b-25 under the Exchange Act); provided , ho w ever , that (x) (i) the Company shall not be so obligated to file the information, documents and reports with the SEC if the SEC does not permit those filings and (ii) the electronic filing with the SEC through the SECs Electronic Data Gathering, Analysis, and Retrieval System (or any successor system providing for free public access to such filings) shall satisfy the Companys obligation to provide such reports, information and documents to the Trustee and the Holders of Notes, it being understood that the Trustee shall have no responsibility to determine whether or not such information has been filed and (y) the Company shall not be required to provide the type of information contemplated by Rule 3-10 of Regulation S-X with respect to separate financial statements for Guarantors or any financial statements for unconsolidated subsidiaries or 50% or less-owned persons contemplated by Rule 3-09 of Regulation S-X, or in each case any successor provisions. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustees receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Companys compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers Certificate).
SECTION 4.04. Limitation on Debt . The Company shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless, after giving effect to the application of the proceeds thereof, no Default or Event of Default would occur as a consequence of the Incurrence or be continuing following the Incurrence and either:
(1) the Debt is Debt of the Company or any Restricted Subsidiary and after giving effect to the Incurrence of the Debt and the application of the proceeds thereof on a Pro Forma Basis, the Consolidated Fixed Charges Coverage Ratio would be greater than 2.00 to 1.00; provided that the aggregate amount of Debt that may be Incurred pursuant to the foregoing by a Restricted Subsidiary that is not a Guarantor, when aggregated with the then outstanding amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) of the following paragraph, shall not at any one time be outstanding in an amount exceeding the greater of (i) $110.0 million and (ii) 5.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time), or
(2) the Debt is Permitted Debt.
Permitted Debt means:
(a) Debt of the Company and the Guarantors evidenced by (i) the Initial Notes and the related Guarantees and (ii) the 2026 Notes and the related guarantees;
(b) Debt of the Company or a Restricted Subsidiary Incurred under any Credit Facilities in an aggregate principal amount outstanding at any time not to exceed $2.0 billion;
(c) Debt of the Company or any Restricted Subsidiary Incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting Purchase Money Debt), including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided that the aggregate principal amount of Debt Incurred in reliance on this clause (c) shall not exceed, when aggregated with
-43-
the amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) below, the greater of (i) $200.0 million and (ii) 10.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time) at any time outstanding;
(d) Debt of the Company owing to and held by any Restricted Subsidiary and Debt of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided , however , that (1) any subsequent issue or transfer of Equity Interests or other event that results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of that Debt (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of that Debt by the issuer thereof, and (2) if the Company or a Guarantor is the obligor on any such Debt owing to a Restricted Subsidiary that is not a Guarantor, the Debt is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes or the related Guarantees, as applicable;
(e) Debt of a Restricted Subsidiary outstanding on the date on which that Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary; provided that Debt of Restricted Subsidiaries that are not Guarantors that is Incurred under this clause (e) may not be Incurred in contemplation of, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, a transaction or series of transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Company or was otherwise acquired by the Company; provided further that at the time that Person was acquired by the Company or otherwise became a Restricted Subsidiary and after giving effect to the Incurrence of that Debt on a Pro Forma Basis, (i) the Company would have been able to Incur $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this Section 4.04 or (ii) the Consolidated Fixed Charges Coverage Ratio would have been greater than such ratio immediately prior to such transaction;
(f) Debt of the Company or a Restricted Subsidiary Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, a transaction or series of transactions pursuant to which a Person became a Restricted Subsidiary of the Company or was otherwise acquired by the Company or a Restricted Subsidiary; provided at the time that Person was acquired by the Company or otherwise became a Restricted Subsidiary and after giving effect to the Incurrence of that Debt, (i) the Company would have been able to Incur $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this covenant or (ii) the Consolidated Fixed Charges Coverage Ratio would have been greater than such ratio immediately prior to such transaction; provided that the aggregate amount of Debt that may be Incurred pursuant to this clause (f) by a Restricted Subsidiary that is not a Guarantor, when aggregated with the then outstanding amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) below, shall not at any one time be outstanding in an amount exceeding the greater of (i) $110.0 million and (ii) 5.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(g) Debt in respect of Swap Contracts; provided that such Swap Contracts are (or were) entered into in for the purpose of mitigating risks associated with fluctuations in interest rates, foreign exchange rates or commodity prices, and not for purposes of speculation;
(h) Debt in respect of workers compensation claims, property casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations, performance, bid and surety bonds and completion guaranties and similar arrangements, in each case in the ordinary course of business;
(i) to the extent constituting Debt, indemnification and non-compete obligations or adjustments in respect of the purchase price (including earn-outs and other contingent deferred payments) in connection with any acquisition or disposition permitted by this Indenture;
(j) Debt outstanding on the Issue Date not otherwise described in clause (a) or (b) above or clause (l)(y) below;
-44-
(k) Debt of the Company or a Restricted Subsidiary in an aggregate principal amount outstanding at any one time not to exceed the greater of $250.0 million and 10.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(l) Debt of Restricted Subsidiaries that are not Guarantors in an aggregate principal amount outstanding at any one time not to exceed (x) $50.0 million plus (y) in the case of Foreign Subsidiaries organized under the Laws of the Peoples Republic of China, RMB450,000,000;
(m) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Company or any Restricted Subsidiary in the ordinary course of business against insufficient funds, so long as such Debt is promptly repaid;
(n) (x) any guarantee by the Company or a Restricted Subsidiary of Debt or other obligations of any Restricted Subsidiary so long as the Incurrence of such Debt Incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (y) any guarantee by a Restricted Subsidiary of Debt of the Company; provided that such guarantee is Incurred in accordance with Section 4.14;
(o) Debt in connection with any Permitted Receivables Financing;
(p) Debt representing deferred compensation to employees of the Company and its Restricted Subsidiaries Incurred in the ordinary course of business;
(q) Debt Incurred in the ordinary course of business in connection with cash pooling arrangements and cash management incurred in the ordinary course of business in respect of netting services and similar arrangements in each case in connection with cash management and deposit accounts, but only to the extent, with respect to any such arrangements, that the total amount of deposits subject to such arrangements equals or exceeds the total amount of overdrafts or similar obligations subject thereto;
(r) Debt consisting of unpaid insurance premiums owing to insurance companies and insurance brokers Incurred in connection with the financing of insurance premiums in the ordinary course of business;
(s) guarantees of Debt otherwise permitted by this Section 4.04 and of other obligations otherwise permitted under this Indenture; and
(t) Permitted Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause (1) of the first paragraph of this Section 4.04 and clauses (a), (c), (e), (f), (j), (k) and (s) above.
For purposes of determining compliance with any restriction on the Incurrence of Debt in dollars where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination, provided that if any such Debt denominated in a different currency is subject to a Swap Contract (with respect to dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in such foreign currency will be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt Incurred in the same currency as the Debt being Refinanced will be the Dollar Equivalent of the Debt Refinanced determined on the date such Debt being Refinanced was initially Incurred. Notwithstanding any other provision of this Section 4.04, for purposes of determining compliance with this Section 4.04, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that the Company or any Restricted Subsidiary may Incur under any of clauses (a) through (t) of this Section 4.04.
For purposes of determining compliance with this Section 4.04, in the event that an item of Debt meets the criteria of more than one of the types of Debt described above, the Company, in its sole discretion, will classify such item of Debt at the time of Incurrence and only be required to include the amount and type of such Debt in one of the above clauses, and the Company will be entitled to divide and classify and reclassify an item of Debt in more
-45-
than one of the types of Debt described above; provided that (i) Debt may not be reclassified under clause (j) above and (ii) all Debt outstanding under the Senior Secured Credit Facilities on the Issue Date shall be deemed to be outstanding pursuant to clause (b) above.
The accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Debt, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preferences and increases in the amount of Debt outstanding solely as a result of fluctuations in the applicable Dollar Equivalent amount of any Debt will not be deemed to be an Incurrence of Debt for purposes of this Section 4.04. The principal amount of any non-interest bearing Debt or other discount security constituting Debt at any date shall be the principal amount thereof that would be shown on a consolidated balance sheet of the Company dated such date prepared in accordance with GAAP.
SECTION 4.05. Limitation on Restricted Payments . The Company shall not make, and shall not permit any Restricted Subsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, the proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be continuing,
(b) the Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.04, or
(c) the aggregate amount of that Restricted Payment and all other Restricted Payments (other than Restricted Payments during a Suspension Period and Restricted Payments made pursuant to clauses (c) through (m) of the following paragraph) declared or made after the Issue Date (the amount of any Restricted Payment, if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the Available Amount.
Notwithstanding the foregoing limitation, the Company may:
(a) pay dividends on its Equity Interests within 60 days of the declaration thereof if, on said declaration date, the dividends could have been paid in compliance with this Indenture;
(b) purchase, repurchase, redeem, legally defease, acquire or retire for value Equity Interests of the Company or Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Company (other than Disqualified Equity Interests and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any Subsidiary for the benefit of their employees);
(c) purchase, repurchase, redeem, legally defease, acquire or retire for value any Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing Debt;
(d) (i) purchase, repurchase, redeem, legally defease, acquire or retire for value any Disqualified Equity Interests in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing Debt or (ii) pay scheduled dividends (not constituting a return on capital) on Disqualified Equity Interests of the Company issued pursuant to and in compliance with Section 4.04;
(e) permit a Restricted Subsidiary that is not a Wholly Owned Subsidiary to pay dividends to shareholders of that Restricted Subsidiary that are not the parent of that Restricted Subsidiary, so long as the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary receives dividends on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis;
-46-
(f) (i) make cash payments in lieu of fractional shares in connection with the exercise of warrants, options or other securities convertible into Equity Interests of the Company, (ii) purchase fractional shares arising out of stock dividends, stock splits, stock combinations or business combinations or (iii) the repurchase or redemption of rights to purchase Equity Interests of the Company issued in connection with any future shareholder rights plan of the Company;
(g) make repurchases of shares of common stock or other Equity Interests of the Company deemed to occur (A) upon the exercise, conversion or exchange of options, warrants or other rights to purchase Equity Interests of the Company if such Equity Interests of the Company represent a portion of the exercise price thereof, (B) as a result of such shares of common stock or other Equity Interests being utilized to satisfy tax withholding obligations upon (i) the exercise of options, warrants or other rights to purchase Equity Interests of the Company or (ii) the vesting of other Equity Interests of the Company or the withholding taxes applicable to such options, warrants or other rights to purchase Equity Interests of the Company or (C) upon the cancellation of Equity Interests of the Company;
(h) repurchase Equity Interests of the Company from current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (including employment agreements) or plans approved by the Board of Directors under which such individuals acquire such Equity Interests; provided , however , that the aggregate amount of such repurchases shall not exceed the sum of (i) $15.0 million in any calendar year (with unused amounts in any calendar year carried over to succeeding calendar years subject to a maximum of $35.0 million in any calendar year) plus (ii) the net cash proceeds of any key man life insurance policies of the Company or any Restricted Subsidiary that have not been used to make any repurchases under this clause (h);
(i) purchase, defease or otherwise acquire or retire for value any Subordinated Obligations upon a Change of Control of the Company or an Asset Sale by the Company, to the extent required by any agreement pursuant to which such Subordinated Obligations were issued, but only if the Company has previously made the offer to purchase notes required under Section 4.12 or Section 4.07;
(j) make other Restricted Payments in aggregate amount not to exceed the greater of (x) $200.0 million and (y) 9.0% of Consolidated Total Assets (calculated as of the last day of the fiscal quarter most recently ended prior to the time of the applicable Restricted Payment for which internal financial statements are available at such time);
(k) make other Restricted Payments, provided that after giving effect to such Restricted Payment on a Pro Forma Basis the Consolidated Net Leverage Ratio will be less than or equal to 3.75 to 1.00;
(l) make other Restricted Payments using the proceeds of a substantially concurrent offering of Equity Interests (other than Disqualified Equity Interests) of the Company; provided that such proceeds shall not be included in the Available Amount; and
(m) make payments under the Transaction Agreements;
provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clause (j) or (k), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this Section 4.05, a Restricted Payment permitted by this Section 4.05 or a Permitted Investment described in the definition of Permitted Investments need not be permitted solely by reference to one category of permitted Restricted Payments or Permitted Investments described in the definition of Permitted Investments (or any portion thereof) but may be permitted in part under any combination thereof.
-47-
For purposes of this Section 4.05, if any Restricted Payment or Investment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of Permitted Investments, the Company may classify such Restricted Payment or Investment in any manner that complies with this Section 4.05 and may later reclassify any such Restricted Payment or Investment so long as such Restricted Payment or Investment (as so reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.
SECTION 4.06. Limitation on Liens . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens) upon any of its Property (including Equity Interests of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, or any interest therein or any income or profits therefrom, unless it has made or will make effective provision whereby the Notes and the related Guarantees will be secured by that Lien equally and ratably with (or prior to) all other Debt of the Company or any Restricted Subsidiary secured by that Lien for so long as such Lien is outstanding. Any Lien created for the benefit of the Holders of the Notes pursuant to this Section 4.06 shall be automatically and unconditionally released and discharged upon the release and discharge of such other Lien.
For purposes of determining compliance with this Section 4.06, (A) a Lien securing an item of Debt need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06 but may be permitted in part under any combination thereof and (B) if a Lien securing an item of Debt meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06, the Company may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Debt (or any portion thereof) in any manner that complies with this Section 4.06 and will be entitled to only include the amount and type of such Lien or such item of Debt secured by such Lien (or any portion thereof) in one of the categories (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06.
SECTION 4.07. Limitation on Asset Sales .
(a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(i) the Company or the Restricted Subsidiary receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale; and
(ii) at least 75% of the consideration paid to the Company or the Restricted Subsidiary in connection with such Asset Sale is in the form of cash or Cash Equivalents or the assumption by the purchaser of liabilities of the Company or any Restricted Subsidiary by operation of law or otherwise (other than liabilities that are by their terms subordinated to the Notes) as a result of which the Company and the Restricted Subsidiaries are no longer obligated with respect to those liabilities; provided that, for purposes of this clause (ii), Designated Non-Cash Consideration in an aggregate amount for all such Asset Sales that is at any time outstanding not to exceed the greater of (x) $50.0 million and (y) 2.75% of Consolidated Total Assets at the time of receipt of such Designated Non-Cash Consideration (measured as of the last day of the fiscal quarter most recently ended prior to the date of receipt thereof for which internal financial statements are available) (without giving effect to any write-off or write-down thereof) shall be deemed to be cash and Cash Equivalents.
For the purposes of this Section 4.07:
(1) securities or other assets received by the Company or any Restricted Subsidiary from the transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days shall be considered to be cash to the extent of the cash received in that conversion;
-48-
(2) any cash consideration paid to the Company or the Restricted Subsidiary in connection with the Asset Sale that is held in escrow or on deposit to support indemnification, adjustment of purchase price or similar obligations in respect of such Asset Sale shall be considered to be cash;
(3) Productive Assets received by the Company or any Restricted Subsidiary in connection with the Asset Sale shall be considered to be cash; and
(4) the requirement that at least 75% of the consideration paid to the Company or the Restricted Subsidiary in connection with the Asset Sale be in the form of cash or Cash Equivalents shall also be considered satisfied if the cash received constitutes at least 75% of the consideration received by the Company or the Restricted Subsidiary in connection with such Asset Sale, determined on an after-tax basis.
(b) The Net Available Cash (or any portion thereof) from Asset Sales may be applied by the Company or a Restricted Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or is required by the terms of any Debt):
(i) to repay Debt of the Company under clause (b) of the second paragraph of Section 4.04;
(ii) in the case of any Asset Sale by a Foreign Restricted Subsidiary, to repay any liability of one or more Foreign Restricted Subsidiaries;
(iii) to make capital expenditures or reinvest in Additional Assets (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Company or another Restricted Subsidiary); or
(iv) any combination of the foregoing;
provided that pending the final application of any such Net Available Cash in accordance with clause (a), (b), (c) or (d) above, the Company and its Restricted Subsidiaries may temporarily reduce Debt (including under a revolving Credit Facility) or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture.
(c) Any Net Available Cash from an Asset Sale not applied in accordance with the preceding paragraph within 365 days from the date of the receipt of such Net Available Cash (or in the event that the Company or any Restricted Subsidiary has entered into a binding agreement to acquire Additional Assets within such 365 day period, such period shall be extended for an additional 180 days with respect to the portion of such Net Available Cash so committed to be applied in such acquisition) or that the Company earlier elects to so designate shall constitute Excess Proceeds.
When the aggregate amount of Excess Proceeds not previously subject to a Prepayment Offer exceeds $50.0 million, the Company will be required to make an offer to purchase (the Prepayment Offer) the Notes, which offer shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis according to principal amount, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures (including prorating in the event of oversubscription) set forth in this Indenture. To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all Holders of Notes have been given the opportunity to tender their Notes for purchase in accordance with this Indenture, the Company or such Restricted Subsidiary may use the remaining amount for any purpose permitted by this Indenture and the amount of Excess Proceeds will be reset to zero.
(d) (1) Not later than ten Business Days after the Company is obligated to make a Prepayment Offer as described in the preceding paragraph, the Company shall send a written notice, by first-class mail (or electronic transmission in the case of Notes held in book-entry form), to the Holders of Notes, accompanied by information regarding the Company and its Subsidiaries as the Company in good faith believes will enable the Holders to make an informed decision with respect to that Prepayment Offer. The notice shall state, among other things, the purchase price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date the notice is sent.
-49-
(2) Not later than the date upon which written notice of a Prepayment Offer is delivered to the Holders of Notes as provided above, the Company shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Prepayment Offer (the Offer Amount), (ii) the allocation of the Net Available Cash from the Asset Sales pursuant to which such Prepayment Offer is being made and (iii) the compliance of such allocation with the provisions of clause (c) of this Section 4.07. On or before the purchase date, the Company shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Prepayment Offer remains open (the Offer Period), the Company shall deliver to the Trustee for cancellation the Notes or portions thereof that have been validly tendered and are to be accepted by the Company. The Trustee or the Paying Agent shall, on the purchase date, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Notes delivered by the Company to the Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section 4.07.
(3) At the time the Company delivers Notes to the Trustee that are to be accepted for purchase, the Company shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Note shall be deemed to have been accepted for purchase at the time the Trustee or the applicable Paying Agent mails or delivers payment therefor to the surrendering Holder.
(e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.07. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.07, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.07 by virtue thereof.
SECTION 4.08. Limitation on Restrictions on Distributions from Restricted Subsidiaries . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist any consensual restriction on the right of any Restricted Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Equity Interests, or pay any Debt or other obligation owed, to the Company or any other Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or distributions prior to dividends or distributions being paid on any other Equity Interests shall not be deemed a restriction on the ability to pay dividends or make distributions on Equity Interests),
(b) make any loans or advances to the Company or any other Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Debt Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances), or
(c) transfer any of its Property to the Company or any other Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (a) or (b) above).
The foregoing limitations will not apply:
(1) with respect to clauses (a), (b) and (c), to restrictions:
-50-
(A) in effect on the Issue Date, including pursuant to (x) this Indenture, the Notes and the related Guarantees and (y) the 2026 Notes Indenture, the 2026 Notes and the related guarantees,
(B) relating to Debt of a Restricted Subsidiary and existing at the time it became a Restricted Subsidiary if such restriction was not created in connection with or in anticipation of the transaction or series of transactions pursuant to which that Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company,
(C) resulting from the Refinancing of Debt Incurred pursuant to an agreement referred to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below, provided that restriction is not materially less favorable, taken as a whole, to the Holders of Notes than those under the agreement evidencing the Debt so Refinanced,
(D) resulting from the Incurrence of any Permitted Debt described in clause (b) or (c) of the second paragraph of Section 4.04,
(E) relating to Debt of a Foreign Restricted Subsidiary,
(F) constituting restrictions in connection with a Permitted Receivables Financing,
(G) constituting customary restrictions in joint venture or shareholder agreements relating to any Person that is not a Wholly Owned Restricted Subsidiary,
(H) arising or existing by reason of applicable law or any applicable law, rule, regulation or order, or
(I) that will not, in the good faith judgment of the Company, materially impair the ability of the Company to make all scheduled payments of principal and interest on the Notes as they come due,
(2) with respect to clause (c) only, to restrictions:
(A) relating to Debt that is permitted to be Incurred and secured without also securing the Notes and the related Guarantees pursuant to Section 4.04 and Section 4.06 that limit the right of the debtor to dispose of the Property securing that Debt,
(B) encumbering Property at the time the Property was acquired by the Company or any Restricted Subsidiary, so long as the restriction relates solely to the Property so acquired and was not created in connection with or in anticipation of the acquisition,
(C) resulting from customary provisions restricting subletting or assignment of leases or customary provisions in other agreements (including, without limitation, intellectual property licenses entered into in the ordinary course of business) that restrict assignment of the agreements or rights thereunder, or
(D) which are customary restrictions contained in asset sale agreements limiting the transfer of Property pending the closing of the sale.
SECTION 4.09. Limitation on Transactions with Affiliates . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into or suffer to exist any transaction or series of transactions (including the purchase, sale, transfer, assignment, lease, conveyance or exchange of any Property or the rendering of any service) with, or for the benefit of, any Affiliate of the Company involving aggregate payments or consideration in excess of $20.0 million (an Affiliate Transaction), unless:
-51-
(a) the terms of such Affiliate Transaction are not materially less favorable to the Company or that Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable arms-length transaction with a Person that is not an Affiliate of the Company, and
(b) if the Affiliate Transaction involves aggregate payments or consideration in excess of $50.0 million, the Board of Directors (including a majority of the disinterested members of the Board of Directors) approves the Affiliate Transaction and, in its good faith judgment, believes that the Affiliate Transaction complies with clause (a) of this paragraph.
Notwithstanding the foregoing limitation, the Company or any Restricted Subsidiary may enter into or suffer to exist the following:
(a) any transaction or series of transactions between the Company and one or more Restricted Subsidiaries or between two or more Restricted Subsidiaries;
(b) any Restricted Payment permitted to be made pursuant to Section 4.05 and any Permitted Investment in any Person that would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise Controls such Person;
(c) employment, compensation (including payment of amounts pursuant to employee benefit plans), indemnification, reimbursement and severance arrangements for officers and directors of the Company or any of the Restricted Subsidiaries so long as they are (i) in the ordinary course of business or (ii) in the case of executive officers and directors, approved by the Board of Directors;
(d) loans and advances to employees made in the ordinary course of business in compliance with applicable laws, provided that those loans and advances do not exceed $10.0 million in the aggregate at any one time outstanding;
(e) any transaction effected as part of a Permitted Receivables Financing;
(f) any transaction pursuant to any agreement in effect on the Issue Date (including, with limitation, the Transaction Agreements) and any modification, amendment, replacement or renewal thereof that is not, in the good faith judgment of the Company, materially adverse to the Holders compared to the terms of the applicable agreement in effect on the Issue Date;
(g) any grant, issuance, sale or transfer of Equity Interests (other than Disqualified Equity Interests) of the Company;
(h) any transaction with a Person that is an Affiliate of the Company solely because such a member of the Board of Directors or the board of directors of a Restricted Subsidiary is also a member of the board of directors of such Person or any direct or indirect parent company of such Person;
(i) any transaction with customers, suppliers, joint ventures, joint venture partners or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture; and
(j) any transaction approved by a majority of the disinterested members of the Board of Directors.
SECTION 4.10. Designation of Restricted and Unrestricted Subsidiaries . The Board of Directors may designate any Subsidiary of the Company to be an Unrestricted Subsidiary if:
(a) the Subsidiary to be so designated does not own any Equity Interests or Debt of, or own or hold any Lien on any Property of, the Company or any other Restricted Subsidiary, and
-52-
(b) any of the following:
(1) the Subsidiary to be so designated has total assets of $1,000 or less, or
(2) if the Subsidiary has consolidated assets greater than $1,000, then the designation would be permitted under Section 4.05.
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company will be classified as a Restricted Subsidiary; provided , however , that the Subsidiary shall not be designated a Restricted Subsidiary and shall be automatically classified as an Unrestricted Subsidiary if the requirements set forth in the second immediately following paragraph will not be satisfied after giving pro forma effect to the classification or if the Person is a Subsidiary of an Unrestricted Subsidiary.
Except as provided in the first sentence of the preceding paragraph, no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. In addition, neither the Company nor any Restricted Subsidiary shall at any time be directly or indirectly liable for any Debt that provides that the holder thereof may (with the passage of time or notice or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its Stated Maturity upon the occurrence of a default with respect to any Debt, Lien or other obligation of any Unrestricted Subsidiary in existence and classified as an Unrestricted Subsidiary at the time the Company or the Restricted Subsidiary is liable for that Debt (including any right to take enforcement action against that Unrestricted Subsidiary).
The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if, immediately after giving pro forma effect to the designation,
(x) the Company could Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.04, and
(y) no Default or Event of Default shall have occurred and be continuing or would result therefrom.
Any designation or redesignation of this kind by the Board of Directors will be evidenced to the Trustee by filing with the Trustee an Officers Certificate that certifies that the designation or redesignation complies with the foregoing provisions.
SECTION 4.11. [Reserved] .
SECTION 4.12. Change of Control .
(a) Upon the occurrence of a Change of Control, unless the Company has exercised its right to redeem the Notes in full, the Company shall be required to make an offer to repurchase all of the Notes pursuant to the offer described below (the Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101.0% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
(b) Within 30 days following any Change of Control or, at the Companys option, prior to the consummation of a Change of Control but after it is publicly announced, the Company shall send, by first-class mail (or electronic transmission in the case of Notes held in book-entry form), with a copy to the Trustee, to each Holder of Notes, at such Holders address appearing in the Notes Register, a notice stating:
(A) that a Change of Control Offer is being made pursuant to this Section 4.12 and that all Notes timely tendered will be accepted for payment;
-53-
(B) the Change of Control Purchase Price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date such notice is sent (the Change of Control Payment Date);
(C) the circumstances and relevant facts regarding the Change of Control; and
(D) the procedures that Holders of Notes must follow in order to tender their Notes (or portions thereof) for payment and the procedures that Holders of Notes must follow in order to withdraw an election to tender Notes (or portions thereof) for payment.
(c) Holders electing to have a Note purchased shall be required to surrender the Note (for Notes held in book-entry form, in accordance with DTCs applicable procedures), with an appropriate form duly completed, to the Company or its agent at the address specified in the notice at least three Business Days prior to the Change of Control Payment Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than two Business Days prior to the Change of Control Payment Date a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note that was delivered for purchase by the Holder and a statement that such Holder is withdrawing its election to have such Note purchased (for Notes held in book-entry form, in accordance with DTCs applicable procedures).
(d) Prior to the Change of Control Payment Date, the Company shall irrevocably deposit with either the Trustee or with the Paying Agent (or, if the Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent, segregate and hold in trust) in cash an amount equal to the Change of Control Purchase Price payable to the Holders entitled thereto, to be held for payment in accordance with the provisions of this Section 4.12. On the Change of Control Payment Date, the Company shall deliver to the Trustee the Notes or portions thereof that have been properly tendered to and are to be accepted by the Company for payment. The Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail or deliver payment to each tendering Holder of the Change of Control Purchase Price. In the event that the aggregate Change of Control Purchase Price is less than the amount delivered by the Company to the Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may be, shall deliver the excess to the Company immediately after the Change of Control Payment Date.
(e) The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(f) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to this Section 4.12. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.12, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.12 by virtue thereof.
(g) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not validly withdraw such Notes in a Change of Control Offer and the Company, or any third party making a Change of Control Offer in lieu of the Company as described above, purchases all of the Notes validly tendered and not validly withdrawn by such Holders, the Company or such third party will have the right, upon not less than 30 days nor more than 60 days prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all the Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the purchase date in accordance with the provisions of Article III.
SECTION 4.13. [Reserved] .
SECTION 4.14. Limitation on Guarantees of Debt by Restricted Subsidiaries . The Company shall not permit any Restricted Subsidiary that is a Wholly Owned Restricted Subsidiary (or a Restricted Subsidiary that is a non-Wholly Owned Subsidiary if such Subsidiary guarantees other capital markets debt securities of the Company
-54-
or a Guarantor), other than a Guarantor, a Foreign Restricted Subsidiary or a Receivables Financing SPC, to guarantee the payment of any Debt of the Company or any other Guarantor in excess of $50.0 million unless such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture substantially in the form of Exhibit D hereto providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Debt of the Company or any Guarantor:
(a) if the Notes or such Guarantors Guarantee are subordinated in right of payment to such Debt, the Guarantee under the supplemental indenture shall be subordinated to such Restricted Subsidiarys guarantee with respect to such Debt substantially to the same extent as the Notes are subordinated to such Debt; and
(b) if such Debt is by its express terms subordinated in right of payment to the Notes or such Guarantors Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Debt shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Debt is subordinated to the Notes or such Guarantors Guarantee;
provided that this Section 4.14 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets . The Company shall not merge, consolidate or amalgamate with or into (other than a merger of a Wholly Owned Restricted Subsidiary into the Company), or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its Property in any one transaction or series of transactions to, any Person unless:
(a) the Company shall be the surviving Person or the Person formed by that merger, consolidation or amalgamation or to which that sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia (such Person, as the case may be, being herein called the Successor Company);
(b) the Successor Company (if other than the Company) expressly assumes, by supplemental indenture in form satisfactory to the Trustee, executed and delivered to the Trustee by that Successor Company, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed by the Company;
(c) immediately after giving effect to such transaction or series of transactions on a pro forma basis, no Default or Event of Default shall have occurred and be continuing;
(d) immediately after giving effect to that transaction or series of transactions on a pro forma basis, (i) the Company or the Successor Person, as the case may be, would be able to Incur at least $1.00 of additional Debt under clause (1) of the first paragraph of Section 4.04, or (ii) the Consolidated Fixed Charges Coverage Ratio would be no worse than such ratio immediately prior to such transaction, provided , however , that this clause (d) shall not be applicable to (A) the Company merging, consolidating or amalgamating with or into an Affiliate incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Debt of the Company and the Restricted Subsidiaries is not increased thereby or (B) any Restricted Subsidiary merging, consolidating or amalgamating with or into or transferring all or substantially all its Property to the Company so long as no Equity Interests of such Restricted Subsidiary are distributed to any Person other than the Company; and
-55-
(e) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each stating that the transaction and the supplemental indenture, if any, in respect thereto comply with this Section and that all conditions precedent herein provided for relating to the transaction and the execution and delivery of a supplemental indenture, as applicable, have been satisfied.
The Successor Person shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture, but the predecessor Company in the case of:
(a) a sale, transfer, assignment, conveyance or other disposition (unless that sale, transfer, assignment, conveyance or other disposition is of all or substantially all the assets of the Company as an entirety or virtually as an entirety), or
(b) a lease,
in each case, shall not be released from any obligation to pay the principal of, premium, if any, and interest on, the Notes.
Subject to Section 10.02(b) governing release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor shall, and the Company shall not permit any such Guarantor to, consolidate or merge with or into or wind up into (whether or not the Company or such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) (a) such Guarantor is the surviving Person or the Person formed by that merger, consolidation or amalgamation or to which that sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia (such Guarantor or such Person, as the case may be, being herein called the Successor Person);
(b) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantors related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(c) immediately after giving effect to such transaction or series of transactions on a Pro Forma Basis, no Default or Event of Default shall have occurred and be continuing; and
(d) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each stating that the transaction and the supplemental indenture, if any, in respect thereto comply with this Section 5.01 and that all conditions precedent herein provided for relating to the transaction have been satisfied; or
(2) the transaction does not violate Section 4.07 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance herewith at such time).
In the case of clause (1) above, the Successor Person will succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantors Guarantee and, except in the case of (x) a sale, transfer, assignment, conveyance or other disposition (unless that sale, transfer, assignment, conveyance or other disposition is of all the assets of such Guarantor as an entirety or virtually as an entirety) or (y) a lease, such Guarantor shall automatically be released and discharged from its obligations under this Indenture and such Guarantors Guarantee. Notwithstanding the foregoing, any Guarantor may merge into or transfer all or part of its properties and assets to another Guarantor or the Company.
-56-
For the avoidance of doubt, nothing in this Indenture shall prohibit the consummation of the Transactions.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default . The following events shall be Events of Default:
(1) the Company defaults in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of, or premium, if any, on any Note when the same becomes due and payable at its Stated Maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise;
(3) the Company fails to comply with Article V;
(4) the Company fails to comply with any other covenant or agreement in the Notes or in this Indenture (other than a failure that is the subject of the foregoing clause (1), (2) or (3)) and such failure continues for 60 days (other than with respect to Section 4.03, which failure continues for 120 days) after written notice is given to the Company as specified below;
(5) a default under any Debt by the Company or any Restricted Subsidiary that results in acceleration of the maturity of that Debt, or failure to pay any Debt at maturity, in either case giving effect to any applicable grace period, in an aggregate amount greater than $100.0 million or its foreign currency equivalent at the time;
(6) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an involuntary case;
(C) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any Significant Subsidiary; or
(D) grants any similar relief under any foreign laws; and in each such case the order or decree remains unstayed and in effect for 30 days;
-57-
(8) any judgment or judgments for the payment of money in an aggregate amount in excess of $100.0 million (or its foreign currency equivalent at the time), net of any amounts covered by insurance, that shall be rendered against the Company or any Restricted Subsidiary and that shall not be waived, satisfied or discharged for any period of 60 consecutive days after such judgment or judgments have become final; or
(9) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible Officer of any Guarantor that is a Significant Subsidiary, as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture.
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
A Default under clause (4) is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding notify the Company (and in the case of such notice by Holders, the Trustee) of the Default and the Company does not cure that Default within the time specified after receipt of such notice. The notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default.
The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers Certificate of any Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration . If an Event of Default with respect to the Notes (other than an Event of Default specified in Section 6.01(6) or (7) with respect to the Company) shall have occurred and be continuing, the Trustee or the registered Holders of not less than 25% in aggregate principal amount of Notes then outstanding may, by notice to the Company and the Trustee, declare to be immediately due and payable the principal amount of all the applicable Notes then outstanding, plus accrued but unpaid interest to, but excluding, the date of acceleration. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(6) or (7) with respect to the Company occurs, the principal of and accrued and unpaid interest on all the Notes shall be due and payable immediately without any declaration or other act by the Trustee or the Holder of the Notes. After any such acceleration but before a judgment or decree based on acceleration is obtained by the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Notes by notice to the Trustee and the Company may rescind any declaration of acceleration if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal, premium, or interest that has become due solely because of the acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults . The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may waive an existing Default and its consequences except (i) a Default in the payment of the principal of or interest on a Note or (ii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
-58-
SECTION 6.05. Control by Majority . The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Notes. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Subject to Section 7.01, in case an Event of Default shall occur and be continuing, the Trustee shall be under no obligation to exercise any of its rights or powers hereunder at the request or direction of any of the Holders, unless the Holders shall have offered to the Trustee indemnity satisfactory to it against loss, liability or expense.
SECTION 6.06. Limitation on Suits . A Holder may not pursue any remedy with respect to this Indenture or the Notes unless:
(1) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made a written request, and such Holder or Holders shall have offered security or indemnity, to the Trustee satisfactory to it against loss, liability or expense to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has not received from the Holders of at least a majority in aggregate principal amount of the Notes outstanding a direction inconsistent with such request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a Holder shall not apply to a suit instituted by a Holder of Notes for the enforcement of payment of the principal of, premium, if any, or interest on such Note on or after the applicable due date specified in such Note. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).
SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the contractual right of any Holder to institute suit for the enforcement of any payment on or with respect to such Holders Notes expressly set forth in this Indenture or the Notes shall not be waived without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in this Indenture.
SECTION 6.09. Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for such compensation as agreed upon in writing by the parties hereto, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under this Indenture, or in connection with the transactions contemplated hereunder. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under this Indenture out of the estate, in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.
-59-
SECTION 6.10. Priorities . If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:
FIRST: to the Trustee, including its agents and counsel, for amounts due under this Indenture;
SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amount for any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Company shall mail to each Holders and the Trustee a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Notes then outstanding.
SECTION 6.12. Waiver of Stay or Extension Laws . Neither the Company nor any Guarantor (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and the Guarantors (to the extent that they may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee .
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Persons own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties, covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein.
-60-
(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms of this Indenture.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01, and the provisions of this Article VII shall apply to the Trustee in its role as Registrar, Paying Agent and Notes Custodian.
SECTION 7.02. Rights of Trustee .
(a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. The Trustee may, however, in its discretion make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it shall be entitled to receive an Officers Certificate and an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) Subject to Section 7.01(c), the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty unless so specified herein.
-61-
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by the Trustee in compliance with such request or direction.
(h) The Trustee may employ or retain accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties hereunder and shall not be responsible for any misconduct on the part of any of them.
(i) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless (i) a Trust Officer has actual knowledge thereof or (ii) written notice of any event which is in fact such a Default is received by the Trustee from the Company, any Guarantor or any Holder of at least 25% in aggregate principal amount of the Notes then outstanding (in accordance with the notice provisions of this Indenture) and such notice references the Notes and this Indenture.
(k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(l) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(m) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
(n) Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Notes.
The provisions of this Section 7.02 shall survive satisfaction and discharge or the termination, for any reason, of this Indenture and the resignation and/or removal of the Trustee.
SECTION 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity, priority or adequacy of this Indenture, the Notes or the Guarantees, it shall not be accountable for the Companys use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company or any Guarantor in this Indenture or in any other document issued in connection with the sale of the Notes or in the Notes other than the certificate of authentication executed by the Trustee.
SECTION 7.05. Notice of Defaults . If a Default or Event of Default occurs and is continuing and if the Trustee has notice of such (as set forth in Section 7.02(j)), the Trustee shall mail (or with respect to Notes held in book-entry form, to the extent permitted or required by applicable procedures and regulations of the Depositary, send electronically) to each Holder notice of the Default or Event of Default within 90 days after the Trustee has notice of such (as set forth in Section 7.02(j)). Except in the case of a Default or Event of Default in payment of principal of or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of Holders.
SECTION 7.06. [Reserved] .
-62-
SECTION 7.07. Compensation and Indemnity . The Company shall pay to the Trustee from time to time such compensation for its services as agreed upon in writing by the parties hereto. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees agents, counsel, accountants and experts. The Company and the Guarantors, jointly and severally, shall indemnify, defend, protect and hold harmless the Trustee (in its individual capacity and Trustee capacities) from and against any and all loss, liability, damages, cost or expense (including reasonable attorneys fees) incurred by it in connection with the acceptance or performance of its duties hereunder and/or the transactions contemplated under this Indenture and the Trustee shall have no liability or responsibility for any action or inaction on the part of any Paying Agent, Registrar, Authentication Agent or any successor trustee. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or any Guarantor of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company and the Guarantors shall pay the reasonable fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustees own willful misconduct or gross negligence as finally adjudicated by a court of competent jurisdiction. The Company need not pay for any settlement made by the Trustee without the Companys consent, such consent not to be unreasonably withheld. All indemnifications and releases from liability granted hereunder to the Trustee shall extend to its officers, directors, employees, agents, successors and assigns.
To secure the Companys and the Guarantors payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Companys and the Guarantors payment obligations pursuant to this Section 7.07 shall survive the resignation or removal of the Trustee and the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(6) or (7) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee . The Trustee may resign at any time by so notifying the Company in writing at least 30 days in advance of such resignation and be discharged upon such resignation from the trust created hereby by so notifying the Company. The Holders of a majority in aggregate principal amount of the Notes then outstanding may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee. No resignation or removal shall be effective until a successor Trustee has been appointed and has accepted its appointment. The Company may, upon five Business Days notice, remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a majority in aggregate principal amount of the Notes then outstanding and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail, or otherwise deliver in accordance with the procedures of the Depositary in the case of Notes held in book-entry form, a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
-63-
If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, at the expense of the Company, or the Holders of 10% in aggregate principal amount of the Notes then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder who has been a bona fide Holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement or resignation of the Trustee pursuant to this Section 7.08, the Companys obligations under Section 7.07 shall continue for the benefit of the Trustee and survive the termination of this Indenture.
SECTION 7.09. Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any such successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification . The Trustee shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $50,000,000 as set forth in its (or its related bank holding companys) most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, as amended, subject to the penultimate paragraph thereof.
SECTION 7.11. Preferential Collection of Claims Against Company . The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance .
(a) This Indenture shall be discharged and shall cease to be of further effect as to all Notes and the related Guarantees, when either:
(1) all Notes theretofore authenticated and delivered, except mutilated, lost or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption and redeemed within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense,
-64-
of the Company, and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders cash in U.S. dollars, U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized accounting firm (in the case of U.S. Government Securities), without consideration of any reinvestment of interest, to pay and discharge the entire Debt on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to, but excluding, the date of maturity or redemption;
(B) the Company has paid or caused to be paid all sums payable by it under this Indenture; and
(C) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.
In addition, the Company shall deliver an Officers Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of its and the Guarantors obligations under the Notes, the related Guarantees and this Indenture (legal defeasance option) or (ii) its obligations and those of the Guarantors under Sections 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.12 and 4.14 and the operation of Sections 6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of Sections 6.01(6) and (7), with respect only to Significant Subsidiaries) and the limitations contained in clause (d) of Section 5.01 (covenant defeasance option). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Sections 6.01(4) (with respect to the covenants of Article IV identified in the immediately preceding paragraph), 6.01(5), 6.01(6), 6.01(7) or 6.01(8) (with respect only to Significant Subsidiaries in the case of Sections 6.01(6) and 6.01(7)) or because of the failure of the Company to comply with the limitations contained in clause (d) of Section 5.01. If the Company exercises its legal defeasance option or its covenant defeasance option, each Guarantor shall be released from all of its obligations with respect to its Guarantee.
Upon satisfaction of the conditions set forth herein and upon request of the Company, accompanied by an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent specified herein relating to the defeasance contemplated have been complied with, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Companys obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full. Thereafter, the Companys obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive such satisfaction or discharge.
SECTION 8.02. Conditions to Defeasance . The Company may exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money in U.S. Dollars or U.S. Government Obligations for the payment of principal of and interest (including premium, if any) on the Notes to maturity or redemption;
(2) the Company delivers to the Trustee a certificate from a nationally recognized accounting firm expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest (including premium, if any) when due on all the Notes to maturity or redemption, as the case may be;
-69-
(3) 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 6.01(6) or (7) occurs with respect to the Company or any other Person making the deposit that is continuing at the end of the period;
(4) no Default or Event of Default has occurred and is continuing on the date of the deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other material agreement or instrument binding on the Company or any Guarantor;
(6) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance of the Notes as contemplated by this Article VIII have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article III.
SECTION 8.03. Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes.
SECTION 8.04. Repayment to Company . The Trustee and the Paying Agent shall promptly turn over to the Company upon written request any excess money or U.S. Government Obligations held by them upon satisfaction of the conditions and occurrence of the events set forth in this Article VIII.
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.
SECTION 8.05. Indemnity for U.S. Government Obligations . The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement . If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Companys obligations under this Indenture and the Notes shall be revived and reinstated as though no
-66-
deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Company has made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders . The Company, the Guarantors (except that no existing Guarantor will be required to execute any amendment that solely relates to changes described in clause (5) below)) and the Trustee may amend this Indenture, the Notes and/or the related Guarantees without notice to or consent of any Holder to:
(1) cure any ambiguity, omission, defect or inconsistency, as evidenced in an Officers Certificate;
(2) provide for the assumption by a successor entity of the obligations of the Company or any Guarantor under this Indenture;
(3) provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;
(4) comply with the rules of any applicable depositary;
(5) add a Guarantor with respect to the Notes;
(6) secure the Notes, to add to the covenants of the Company and the Guarantors for the benefit of the Holders or to surrender any right or power herein conferred upon the Company or any Guarantor;
(7) make any change that does not adversely affect the rights of any Holder of the Notes in any material respect;
(8) comply with any requirements of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA;
(9) provide for the issuance of Additional Notes in accordance with this Indenture
(10) evidence and provide for the acceptance of an appointment under this Indenture of a successor trustee; or
(11) conform the text of this Indenture, the Notes or the related Guarantees to any provision of the Description of Notes section of the Offering Circular to the extent that such provision in the Description of Notes section of the Offering Circular was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the related Guarantees as set forth in an Officers Certificate.
After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders . The Company, the Guarantors and the Trustee may amend this Indenture, the Notes or the related Guarantees without notice to any Holder but with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes). However, without the consent of each Holder affected thereby, an amendment may not:
-67-
(1) reduce the amount of Notes whose Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of any Note;
(4) make any Note payable in money other than U.S. dollars;
(5) amend the contractual right expressly set forth in this Indenture or the Notes of any Holder to institute suit for the enforcement of any payment on or with respect to that Holders Notes;
(6) subordinate the Notes to any other obligation of the Company
(7) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary in any manner materially adverse to the Holders;
(8) reduce the premium payable upon the redemption of any Note or change the date on which any Note may be redeemed in accordance with Article III;
(9) reduce the premium payable upon a Change of Control or, at any time after a Change of Control has occurred, change the time by which the Change of Control Offer relating thereto must be made or at which the Notes must be repurchased pursuant to that Change of Control Offer;
(10) at any time after the Company is obligated to make a Prepayment Offer with the Excess Proceeds from Asset Sales, change the time by which the Prepayment Offer must be made or at which the Notes must be repurchased pursaunt thereto; or
(11) make any change in the amendment provisions hereof that require each Holders consent or in the waiver provisions hereof.
After an amendment under this Section 9.02 becomes effective, the Company shall promptly mail (or send by electronic transmission in the case of Notes held in book-entry form) to Holders (with a copy to the Trustee) a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
SECTION 9.03. [Reserved] .
SECTION 9.04. Revocation and Effect of Consents and Waivers . A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holders Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holders Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Company or the Trustee of consents by the Holders of the requisite principal amount of Notes, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Company, the Guarantors (as applicable) and the Trustee.
-68-
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Notes . If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver such Note to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return such Note to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments . The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall receive indemnity satisfactory to it and shall receive, and (subject to Section 7.01) shall be fully protected in conclusively relying upon, an Officers Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and is the legal, valid and binding obligation of the Company and the Guarantors, as applicable, enforceable in accordance with its terms.
SECTION 9.07. Additional Voting Terms; Calculation of Principal Amount . All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.
ARTICLE X
Guarantee
SECTION 10.01. Guarantee of Notes .
(a) Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior basis, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Company under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Company under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations). The Guaranteed Obligations of all Guarantors shall be unsecured. Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Guarantor, and that each Guarantor shall remain bound under this Article X notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or each Guarantor;
-69-
(v) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of each Guarantor, except as provided in Section 10.02(b). Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantors obligations would be less than the full amount claimed.
(c) Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Companys or such Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against such Guarantor.
(d) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.
(e) The Guarantee of each Guarantor is, to the extent and in the manner set forth in this Article X, equal in right of payment to all existing and future Pari Passu Debt and senior in right of payment to all existing and future Subordinated Obligations of such Guarantor.
(f) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.05, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
(g) Each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.
(h) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Company to the Holders and the Trustee.
(i) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purposes of this Section 10.01.
-70-
(j) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.
(k) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 10.02. Limitation on Liability .
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Guarantor without rendering the Guarantee or this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.
(b) A Guarantee as to any Restricted Subsidiary that is (or becomes) a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.14 and provides a guarantee of the Notes shall terminate and be of no further force or effect and such Guarantee shall be deemed to be automatically released from all obligations under this Article X upon any of the following:
(1) any sale, exchange or transfer (by merger, consolidation or otherwise) of the Equity Interests of such Guarantor (including any sale, exchange or transfer), after which the applicable Guarantor is no longer a Restricted Subsidiary;
(2) the release or discharge of the guarantee by such Guarantor of the Senior Secured Credit Facilities or the guarantee of any other Debt that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee;
(3) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary;
(4) if the Company exercises its legal defeasance option or its covenant defeasance option under Article VIII or if the Companys obligations under this Indenture are satisfied discharged in accordance with Article VIII; or
(5) with the consent of the Holders in accordance with Section 9.02.
The Company shall notify the Trustee and the Holders of any Guarantor that is released from its Guarantee. Upon delivery to the Trustee of an Officers Certificate and an Opinion of Counsel to the effect that all conditions precedent to release set forth in this Indenture have been satisfied, the Trustee shall execute and deliver an appropriate instrument confirming the release of any such Guarantor upon the Companys request.
Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantors pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 10.03. Successors and Assigns . This Article X shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
-71-
SECTION 10.04. No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article X shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article X at law, in equity, by statute or otherwise.
SECTION 10.05. Modification . No modification, amendment or waiver of any provision of this Article X, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle any Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors . Each Subsidiary of the Company which is required to become a Guarantor of the Notes pursuant to Section 4.14 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto pursuant to which such Subsidiary shall become a Guarantor under this Article X and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate stating that such supplemental indenture is authorized or permitted by this Indenture.
SECTION 10.07. Non-Impairment . The failure to endorse a Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE XI
Miscellaneous
SECTION 11.01. Reserved .
SECTION 11.02. Notices . Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:
if to the Company or a Guarantor:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
if to the Trustee:
Wells Fargo Bank, National Association
10 S. Wacker Dr.
13 th Floor
MAC N8405-130
Chicago, Illinois 60606
Facsimile: (312) 726-2158
Attention of: Corporate, Municipal & Escrow Services
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
-72-
Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders . Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signer, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been fully complied with.
SECTION 11.06. Annual Officer s Certificate as to Compliance . Not later than ninety days after each fiscal year end, beginning with the fiscal year ending May 28, 2017, the Company shall deliver to the Trustee a certificate (which need not comply with Section 11.05 of this Indenture) executed by the principal executive officer, principal financial officer or principal accounting officer of the Company as to such officers knowledge of the Companys compliance with all conditions and covenants under this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture.
SECTION 11.07. When Notes Disregarded . In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, the Guarantors or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or the Guarantors shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
-73-
SECTION 11.08. Rules by Trustee, Paying Agents and Registrar . The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agents or co-registrar may make reasonable rules for their functions.
SECTION 11.09. Legal Holidays . If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 11.10. Governing Law; Jury Trial Waiver . THIS INDENTURE, THE NOTES AND THE RELATED GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE COMPANY, THE GUARANTORS, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE RELATED GUARANTEES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 11.11. No Recourse Against Others . A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Notes, any Guarantee or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes.
SECTION 11.12. Successors . All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.13. Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. Delivery of an executed signature page by facsimile or other electronic transmission (e.g., pdf or tif) shall be effective as delivery of a manually executed counterpart hereof.
SECTION 11.14. Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 11.15. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
SECTION 11.16. U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information within the Companys custody or control or as the Company may reasonably obtain that the Trustee may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
[ Remainder of page intentionally left blank .]
-74-
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
LAMB WESTON HOLDINGS, INC. | ||
By: | /s/ John F. Gehring | |
Name: John F. Gehring | ||
Title: Senior Vice President and Interim Chief Financial Officer | ||
CONAGRA FOODS LAMB WESTON, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary | ||
LAMB WESTON SALES, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary | ||
LAMB-WESTON/MIDWEST, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary |
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee |
||
By: | /s/ Gregory S. Clarke | |
Name: Gregory S. Clarke | ||
Title: Vice President |
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR ITS SUBSIDIARIES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.
A-1
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
[Definitive Notes Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
[Temporary Regulation S Legend]
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
A-2
[FORM OF FACE OF INITIAL NOTE]
LAMB WESTON HOLDINGS, INC.
No. [ ] | $ |
4.625% Senior Notes due 2024
[144A CUSIP No. 513272 AA2]
[144A ISIN No. US513272AA27]
[REG S CUSIP No. U5256P AA9]
[REG S ISIN No. USU5256PAA94]
LAMB WESTON HOLDINGS, INC., a Delaware corporation, promises to pay to [ ], or registered assigns, the principal sum of [ ] Dollars ($ ) [or such greater or lesser amount as may be indicated on the attached Schedule of Increases or Decreases in Global Note] on November 1, 2024.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Note are set forth on the other side of this Note.
A-1-3
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
LAMB WESTON HOLDINGS, INC. | ||
By: |
|
|
Name: | ||
Title: |
TRUSTEES CERTIFICATE OF
AUTHENTICATION
Dated: |
|
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee, certifies that this is
one of the Notes referred to in
the Indenture.
By: |
|
|
Authorized Signatory |
A-1-4
[FORM OF REVERSE SIDE OF NOTE]
4.625% Senior Notes due 2024
1. | Interest |
LAMB WESTON HOLDINGS, INC., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Company), promises to pay interest on the principal amount of this 4.625% Senior Note due 2024 (this Note and, together with any other 4.625% Senior Notes due 2024, the Notes) at the rate per annum shown above. The Company will pay interest semiannually on May 1 and November 1 of each year, commencing May 1, 2017. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from November 9, 2016. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Notes plus 1% per annum, and it shall pay interest on overdue installments of interest at the rate borne by the Notes to the extent lawful.
2. | Method of Payment |
The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the April 15 or October 15 next preceding the interest payment date even if Notes are cancelled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC. The Company will make all payments in respect of a Definitive Note (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. | Paying Agent and Registrar |
Initially, Wells Fargo Bank, National Association (the Trustee) will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. | Indenture |
The Company issued the Notes under an Indenture dated as of November 9, 2016 (the Indenture), among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.
[This Note is one of the Initial Notes referred to in the Indenture.] The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Debt, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of the Company and each Guarantor to consolidate or merge with or into any other Person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of its Property.
A-1-5
5. | Optional Redemption |
(a) Except as set forth in clauses (b) and (c) below, the Notes may not be redeemed prior to November 1, 2021. Starting on that date, the Company may redeem all or any portion of the Notes, at once or over time and from time to time, at the redemption prices set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). The following prices are for Notes redeemed during the 12-month period commencing on November 1 of the years set forth below, and are expressed as percentages of principal amount:
Period |
Redemption Price | |||
2021 |
102.313 | % | ||
2022 |
101.156 | % | ||
2023 and thereafter |
100.000 | % |
(b) Prior to November 1, 2021, the Company may redeem the Notes, in whole at any time or in part from time to time at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption, subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.
(c) Until November 1, 2019, the Company may, at any time and from time to time, redeem up to 35.0% of the aggregate principal amount of the Notes (including any Additional Notes) at a redemption price equal to 104.625% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in an amount no greater than the aggregate cash proceeds received from one or more Equity Offerings; provided that (1) at least 65.0% of the aggregate principal amount of Notes (including any Additional Notes) remains outstanding immediately after the occurrence of each such redemption and (2) each such redemption occurs within 90 days of the closing of such Equity Offering.
Notices of redemption may be subject to the satisfaction of one or more conditions precedent established by the Company in its sole discretion, including completion of an Equity Offering or other corporate transaction. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Companys discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed.
Applicable Premium means with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, or:
(A) the present value at such redemption date of (i) the redemption price of such Note at November 1, 2021 (such redemption price being set forth in the table appearing in clause (a) of this paragraph 5), plus (ii) all scheduled remaining interest payments due on such Note through November 1, 2021 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the principal amount of such Note.
Treasury Rate means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar
A-1-6
market data)) most nearly equal to the period from the redemption date to November 1, 2021; provided , however , that if the period from the redemption date to November 1, 2021 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used. On the second Business Day preceding the applicable redemption date, the Company will (1) calculate the Treasury Rate and (2) file with the Trustee an Officers Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.
6. | Notice of Optional Redemption |
Notice of redemption shall be mailed by first-class mail (or electronic transmission in the case of Notes held in book-entry form) to each Holder of Notes to be redeemed at its registered address, at least 30 but not more than 60 days before the redemption date, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or a satisfaction and discharge of the Notes. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
7. | Sinking Fund |
The Notes are not subject to any sinking fund.
8. | Repurchase of Notes at the Option of Holders upon Change of Control |
Upon a Change of Control, unless the Company has exercised its right to redeem the Notes in full, the Company will be required to make an offer to repurchase all or any part of the Notes of such Holder at a purchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture.
9. | Guarantee |
The payment by the Company of the principal and interest is unconditionally guaranteed on a joint and several senior unsecured basis by each of the Guarantors to the extent set forth in the Indenture.
10. | Denominations; Transfer; Exchange |
The Notes are in registered form without coupons, in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A Holder shall transfer or exchange Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed or 15 days before an interest payment date.
11. | Persons Deemed Owners |
The registered Holder of this Note shall be treated as the owner of it for all purposes.
A-1-7
12. | Unclaimed Money |
If money for the payment of principal or interest remains unclaimed for two years, or prior to the applicable escheat date, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
13. | Discharge and Defeasance |
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Notes and the Indenture if the Company irrevocably deposits with the Trustee money in U.S. dollars or U.S. Government Obligations for the payment of principal and interest (including premium, if any) on the Notes, in each case to redemption or maturity.
14. | Amendment, Waiver |
Subject to certain exceptions set forth in the Indenture, the Company, the Guarantors and the Trustee may, with or without the consent of the Holders, modify, amend or supplement the Indenture, the Notes or the related Guarantees as provided in the Indenture.
15. | Defaults and Remedies |
If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of Notes then outstanding, subject to certain limitations, may declare all the Notes to be immediately due and payable. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Notes being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture. The Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and the Trustee, may rescind any declaration of acceleration and its consequences if the rescission would not conflict with any judgment or decree, and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.
16. | Trustee Dealings with the Company |
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee.
17. | No Recourse Against Others |
A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
A-1-8
19. | Abbreviations |
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. | Governing Law |
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. | CUSIP Numbers |
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. To the extent such numbers have been issued, the Company has caused ISIN and Common Code numbers to be similarly printed on the Notes and has similarly instructed the Trustee. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note. Requests may be made to:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: General Counsel
A-1-9
LAMB WESTON HOLDINGS, INC. 4.625% SENIOR NOTES DUE 2024
ASSIGNMENT FORM
To assign this Note, fill in the form below:
The undersigned hereby assigns and transfers this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date: |
|
[Your Signature: |
|
|||||
Sign exactly as your name appears on the other side of this Note.] 1 | ||||||||
[Holder name exactly as it appears on the other side of this Note |
By: |
|
|
Name: | ||
Title] 2 |
Signature Guarantee: |
|
|||
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee |
Date: |
|
|
||||||
Signature of Signature Guarantee |
1 | For assignments by natural persons. |
2 | For assignments by Holders that are not natural persons. |
A-1-10
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of Trustee or Notes Custodian |
||||
A-1-11
LAMB WESTON HOLDINGS, INC. 4.625% SENIOR NOTES DUE 2024
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.07 (Asset Sale) or 4.12 (Change of Control) of the Indenture, check the box:
Asset Sale ☐ Change of Control ☐
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.07 (Asset Sale) or 4.12 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):
$
Date: |
|
Your Signature: |
|
|||||
(Sign exactly as your name appears on the other side of the Note) |
Signature Guarantee: |
|
|||
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee |
A-1-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
Wells Fargo Bank, National Association
Attn: Corporate Trust DAPS Reorg
600 South Fourth Street, MAC N9303-121
Minneapolis, MN 55402
Phone: 1-800-344-5128
Facsimile: 1-866-969-1290
Email: dapsreorg@wellsfargo.com
Re: 4.625% Senior Notes due 2024
Reference is hereby made to the Indenture, dated as of November 9, 2016 (the Indenture ), among Lamb Weston Holdings, Inc., as issuer (the Company ), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Transferor ) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the Transfer ), to (the Transferee ), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the Securities Act ), and, accordingly, the Transferor hereby further certifies that the beneficial interest in the Global Note or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest in the Global Note or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States and applicable securities laws of any other applicable jurisdiction.
2. ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(a) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer
B-1
is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an initial purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Restricted Notes Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. ☐ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction, and accordingly the Transferor hereby further certifies that (check one):
(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
(b) ☐ such Transfer is being effected to the Company or a subsidiary thereof;
(c) ☐ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or
(d) ☐ such Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 903, or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States.
4. ☐ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) ☐ Check if Transfer is pursuant to Rule 144 . (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) ☐ Check if Transfer is Pursuant to Regulation S . (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) ☐ Check if Transfer is Pursuant to Other Exemption . (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in
B-2
accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
|
||
[Insert Name of Transferor] | ||
By: |
|
|
Name: | ||
Title: |
Dated: |
|
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. | The Transferor owns and proposes to transfer the following: |
[CHECK ONE OF (a) OR (b)]
(a) | ☐ a beneficial interest in the: |
(i) | ☐ 144A Global Note (CUSIP ), or |
(ii) | ☐ Regulation S Global Note (CUSIP ); or |
(b) | ☐ a Restricted Definitive Note. |
2. | After the Transfer the Transferee will hold: |
[CHECK ONE OF (a) OR (b) OR (c)]
(a) | ☐ a beneficial interest in the: |
(i) | ☐ 144A Global Note (CUSIP ), or |
(ii) | ☐ Regulation S Global Note (CUSIP ), or |
(iii) | ☐ Unrestricted Global Note (CUSIP ); or |
(b) | ☐ a Restricted Definitive Note; or |
(c) | ☐ an Unrestricted Definitive Note, |
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
Wells Fargo Bank, National Association
Attn: Corporate Trust DAPS Reorg
600 South Fourth Street, MAC N9303-121
Minneapolis, MN 55402
Phone: 1-800-344-5128
Facsimile: 1-866-969-1290
Email: dapsreorg@wellsfargo.com
Re: 4.625% Senior Notes due 2024
Reference is hereby made to the Indenture, dated as of November 9, 2016 (the Indenture ), among Lamb Weston Holdings, Inc., as issuer (the Company ), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Owner ) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $ in such Note[s] or interests (the Exchange ). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Note and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the Securities Act ), (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Note and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(c) ☐ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note . In connection with the Owners Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the
C-1
Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(d) ☐ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note . In connection with the Owners Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owners own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on such Restricted Definitive Note and in the Indenture and the Securities Act.
(b) ☐ Check if Exchange is from Restricted Definitive Notes to beneficial interest in a Restricted Global Note . In connection with the Exchange of the Owners Restricted Definitive Note for a beneficial interest in the [CIRCLE ONE] 144A Global Note, Regulation S Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Definitive Note and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
|
||
[Insert Name of Transferor] | ||
By: |
|
|
Name: | ||
Title: |
Dated: |
|
C-2
EXHIBIT D
[FORM OF]
SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE (this Supplemental Indenture ) dated as of [ ], among [NEW GUARANTOR] (the New Guarantor ), a subsidiary of LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Company ), the Company and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the Trustee ).
W I T N E S S E T H :
WHEREAS the Company, certain Guarantors and the Trustee have heretofore executed an indenture, dated as of November 9, 2016 (as amended, supplemented or otherwise modified, the Indenture ), providing for the issuance of the Companys 4.625% Senior Notes due 2024 (the Notes ), initially in the aggregate principal amount of $833,000,000;
WHEREAS Sections 4.14 and 10.07 of the Indenture provide that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Companys Obligations under the Notes and the Indenture pursuant to a Guarantee on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Company are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term Holders in this Supplemental Indenture shall refer to the term Holders as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words herein , hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2. Agreement to Guarantee . The New Guarantor hereby agrees, jointly and severally with all existing Guarantors (if any), to unconditionally guarantee the Companys Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article X of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Guarantor under the Indenture.
3. Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 11.01 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
5. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
D-1
6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
7. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
[ Remainder of page intentionally left blank. ]
D-2
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
LAMB WESTON HOLDINGS, INC. | ||
By: |
|
|
Name: | ||
Title: | ||
[ NEW GUARANTOR ], as a Guarantor | ||
By: |
|
|
Name: | ||
Title: | ||
WELLS FARGO BANK, NATIONAL ASSOCIATION , as Trustee |
||
By: |
|
|
Name: | ||
Title: |
D-3
Exhibit 4.2
Execution Version
LAMB WESTON HOLDINGS, INC.,
as Issuer
4.875% Senior Notes due 2026
INDENTURE
Dated as of November 9, 2016
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
TABLE OF CONTENTS
Page | ||||||
ARTICLE I | ||||||
Definitions and Incorporation by Reference | ||||||
SECTION 1.01. | Definitions | 1 | ||||
SECTION 1.02. | Other Definitions | 26 | ||||
SECTION 1.03. | [Reserved] | 27 | ||||
SECTION 1.04. | Rules of Construction | 27 | ||||
SECTION 1.05. | Limited Condition Acquisitions | 27 | ||||
ARTICLE II | ||||||
The Notes | ||||||
SECTION 2.01. | Amount of Notes | 28 | ||||
SECTION 2.02. | Form and Dating | 28 | ||||
SECTION 2.03. | Execution and Authentication | 29 | ||||
SECTION 2.04. | Registrar and Paying Agent | 29 | ||||
SECTION 2.05. | Paying Agent To Hold Money in Trust | 30 | ||||
SECTION 2.06. | Holder Lists | 30 | ||||
SECTION 2.07. | Transfer and Exchange | 30 | ||||
SECTION 2.08. | Replacement Notes | 39 | ||||
SECTION 2.09. | Outstanding Notes | 39 | ||||
SECTION 2.10. | Cancellation | 39 | ||||
SECTION 2.11. | Defaulted Interest | 39 | ||||
SECTION 2.12. | CUSIP, ISIN or Common Code Numbers | 40 | ||||
SECTION 2.13. | Calculation of Principal Amount of Notes | 40 | ||||
SECTION 2.14. | Temporary Notes | 40 | ||||
ARTICLE III | ||||||
Redemption | ||||||
SECTION 3.01. | Notices to Trustee | 40 | ||||
SECTION 3.02. | Selection of Notes To Be Redeemed | 40 | ||||
SECTION 3.03. | Notice of Redemption | 41 | ||||
SECTION 3.04. | Effect of Notice of Redemption | 41 | ||||
SECTION 3.05. | Deposit of Redemption Price | 42 | ||||
SECTION 3.06. | Notes Redeemed in Part | 42 | ||||
ARTICLE IV | ||||||
Covenants | ||||||
SECTION 4.01. | Covenant Suspension | 42 | ||||
SECTION 4.02. | Payment of Notes | 42 | ||||
SECTION 4.03. | SEC Reports | 43 | ||||
SECTION 4.04. | Limitation on Debt | 43 | ||||
SECTION 4.05. | Limitation on Restricted Payments | 46 | ||||
SECTION 4.06. | Limitation on Liens | 48 | ||||
SECTION 4.07. | Limitation on Asset Sales | 48 |
-i-
Page | ||||||
SECTION 4.08. |
Limitation on Restrictions on Distributions from Restricted Subsidiaries |
50 | ||||
SECTION 4.09. |
Limitation on Transactions with Affiliates |
51 | ||||
SECTION 4.10. |
Designation of Restricted and Unrestricted Subsidiaries |
52 | ||||
SECTION 4.11. |
[Reserved] |
53 | ||||
SECTION 4.12. |
Change of Control |
53 | ||||
SECTION 4.13. |
[Reserved] |
54 | ||||
SECTION 4.14. |
Limitation on Guarantees of Debt by Restricted Subsidiaries |
54 | ||||
ARTICLE V | ||||||
Successor Company | ||||||
SECTION 5.01. | When Company May Merge or Transfer Assets | 55 | ||||
ARTICLE VI | ||||||
Defaults and Remedies | ||||||
SECTION 6.01. | Events of Default | 57 | ||||
SECTION 6.02. |
Acceleration |
58 | ||||
SECTION 6.03. |
Other Remedies |
58 | ||||
SECTION 6.04. |
Waiver of Past Defaults |
58 | ||||
SECTION 6.05. |
Control by Majority |
59 | ||||
SECTION 6.06. |
Limitation on Suits |
59 | ||||
SECTION 6.07. |
Rights of Holders to Receive Payment |
59 | ||||
SECTION 6.08. |
Collection Suit by Trustee |
59 | ||||
SECTION 6.09. |
Trustee May File Proofs of Claim |
59 | ||||
SECTION 6.10. |
Priorities |
60 | ||||
SECTION 6.11. |
Undertaking for Costs |
60 | ||||
SECTION 6.12. |
Waiver of Stay or Extension Laws |
60 | ||||
ARTICLE VII | ||||||
Trustee | ||||||
SECTION 7.01. | Duties of Trustee | 60 | ||||
SECTION 7.02. |
Rights of Trustee |
61 | ||||
SECTION 7.03. |
Individual Rights of Trustee |
62 | ||||
SECTION 7.04. |
Trustees Disclaimer |
62 | ||||
SECTION 7.05. |
Notice of Defaults |
62 | ||||
SECTION 7.06. |
[Reserved] |
62 | ||||
SECTION 7.07. |
Compensation and Indemnity |
63 | ||||
SECTION 7.08. |
Replacement of Trustee |
63 | ||||
SECTION 7.09. |
Successor Trustee by Merger |
64 | ||||
SECTION 7.10. |
Eligibility; Disqualification |
64 | ||||
SECTION 7.11. |
Preferential Collection of Claims Against Company |
64 | ||||
ARTICLE VIII | ||||||
Discharge of Indenture; Defeasance | ||||||
SECTION 8.01. | Discharge of Liability on Notes; Defeasance | 64 | ||||
SECTION 8.02. |
Conditions to Defeasance |
65 | ||||
SECTION 8.03. |
Application of Trust Money |
66 | ||||
SECTION 8.04. |
Repayment to Company |
66 |
-ii-
Page | ||||||
SECTION 8.05. |
Indemnity for U.S. Government Obligations |
66 | ||||
SECTION 8.06. |
Reinstatement |
66 | ||||
ARTICLE IX | ||||||
Amendments | ||||||
SECTION 9.01. | Without Consent of Holders | 67 | ||||
SECTION 9.02. |
With Consent of Holders |
67 | ||||
SECTION 9.03. |
[Reserved] |
68 | ||||
SECTION 9.04. |
Revocation and Effect of Consents and Waivers |
68 | ||||
SECTION 9.05. |
Notation on or Exchange of Notes |
69 | ||||
SECTION 9.06. |
Trustee To Sign Amendments |
69 | ||||
SECTION 9.07. |
Additional Voting Terms; Calculation of Principal Amount |
69 | ||||
ARTICLE X | ||||||
Guarantee | ||||||
SECTION 10.01. | Guarantee of Notes. | 69 | ||||
SECTION 10.02. |
Limitation on Liability. |
71 | ||||
SECTION 10.03. |
Successors and Assigns |
71 | ||||
SECTION 10.04. |
No Waiver |
72 | ||||
SECTION 10.05. |
Modification |
72 | ||||
SECTION 10.06. |
Execution of Supplemental Indenture for Future Guarantors |
72 | ||||
SECTION 10.07. |
Non-Impairment |
72 | ||||
ARTICLE XI | ||||||
Miscellaneous | ||||||
SECTION 11.01. | Reserved | 72 | ||||
SECTION 11.02. |
Notices |
72 | ||||
SECTION 11.03. |
Communication by Holders with Other Holders |
73 | ||||
SECTION 11.04. |
Certificate and Opinion as to Conditions Precedent |
73 | ||||
SECTION 11.05. |
Statements Required in Certificate or Opinion |
73 | ||||
SECTION 11.06. |
Annual Officers Certificate as to Compliance |
73 | ||||
SECTION 11.07. |
When Notes Disregarded |
73 | ||||
SECTION 11.08. |
Rules by Trustee, Paying Agents and Registrar |
74 | ||||
SECTION 11.09. |
Legal Holidays |
74 | ||||
SECTION 11.10. |
Governing Law; Jury Trial Waiver |
74 | ||||
SECTION 11.11. |
No Recourse Against Others |
74 | ||||
SECTION 11.12. |
Successors |
74 | ||||
SECTION 11.13. |
Multiple Originals |
74 | ||||
SECTION 11.14. |
Table of Contents; Headings |
74 | ||||
SECTION 11.15. |
Force Majeure |
74 | ||||
SECTION 11.16. |
U.S.A. Patriot Act |
74 |
EXHIBIT INDEX |
||||
Exhibit A |
- |
Form of Initial Note |
||
Exhibit B |
- |
Form of Certificate of Transfer |
||
Exhibit C |
- |
Form of Certificate of Exchange |
||
Exhibit D |
- |
Form of Supplemental Indenture |
-iii-
INDENTURE dated as of November 9, 2016 among LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Company), the Guarantors (as defined herein) party hereto from time to time and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as Trustee (the Trustee).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) $833,000,000 aggregate principal amount of the Companys 4.875% Senior Notes due 2026 issued on the date hereof (the Initial Notes) and (ii) Additional Notes issued from time to time (together with the Initial Notes, the Notes):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions .
2024 Notes means the 4.625% Senior Notes due 2024 issued by the Company on the Issue Date.
2024 Notes Indenture means the indenture dated as of the Issue Date by and among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee, relating to the 2024 Notes.
Additional Assets means:
(a) any Property (other than cash, cash equivalents, securities and inventory) to be owned by the Company or any Restricted Subsidiary and used or useful in a Permitted Business;
(b) Equity Interests of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Equity Interests by the Company or another Restricted Subsidiary; or
(c) Equity Interests constituting a minority interest not held by the Company or a Restricted Subsidiary in any Person that at such time is a Restricted Subsidiary;
provided , however , that, in the case of clauses (b) and (c), the Restricted Subsidiary is primarily engaged in a Permitted Business.
Additional Notes means Notes issued under the terms of this Indenture subsequent to the Issue Date and in compliance with Section 4.04, it being understood that any Notes issued in exchange for or replacement of any Initial Note shall not be an Additional Note.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Allocable Excess Proceeds means the product of:
(a) the Excess Proceeds, and
(b) a fraction,
(1) the numerator of which is the aggregate principal amount of the Notes outstanding on the date of the Prepayment Offer, and
(2) the denominator of which is the sum of the aggregate principal amount of the Notes outstanding on the date of the Prepayment Offer and the aggregate principal amount of other Debt of the Company outstanding on the date of the Prepayment Offer that is pari passu in right of payment with the Notes and subject to terms and conditions in respect of Asset Sales similar in all material respects to Section 4.07 and requiring the Company to make an offer to purchase such Debt at substantially the same time as the Prepayment Offer.
Applicable Premium means with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, or:
(A) the present value at such redemption date of (i) the redemption price of such Note at November 1, 2021 (such redemption price being set forth in the table appearing in paragraph 5(a) of Exhibit A to this Indenture), plus (ii) all scheduled remaining interest payments due on such Note through November 1, 2021 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the principal amount of such Note.
Applicable Procedures means, with respect to any payment, tender, redemption, transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such payment, tender, redemption, transfer or exchange.
Asset Sale means any sale, lease, transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a disposition), of:
(a) any shares of Equity Interests of a Restricted Subsidiary (other than directors qualifying shares or shares of interests required to be held by foreign nationals pursuant to local law),
(b) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, or
(c) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary,
other than, in the case of clause (a), (b) or (c) above,
(1) any disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary,
(2) any disposition that constitutes a Restricted Payment permitted by Section 4.05 or a Permitted Investment,
(3) any disposition effected in compliance with Section 5.01,
(4) a sale of accounts receivables and related assets in connection with a Permitted Receivables Financing,
(5) the creation of Liens permitted by Section 4.06,
(6) the unwinding of any Swap Contract,
(7) transfers of condemned real property as a result of the exercise of eminent domain or other similar policies to the respective governmental authority or agency that has condemned such property (whether by deed in lieu of condemnation or otherwise), and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement,
-2-
(8) non-exclusive licenses or sublicenses of intellectual property in the ordinary course of business and abandonment or lapse of intellectual property that is, in the reasonable business judgment of the Company or its Restricted Subsidiary, no longer used in or useful in the conduct of their respective businesses,
(9) Specified Sales,
(10) the issuance by a Restricted Subsidiary of Disqualified Equity Interests or Preferred Stock that is permitted under Section 4.04, and
(11) any disposition that does not (alone or in a series of related dispositions) involve assets having a Fair Market Value or consideration in excess of $25.0 million.
Attributable Debt means, with respect to any Sale and Leaseback Transaction, (i) with respect to any such lease that creates a Capital Lease Obligation, the Capital Lease Obligation thereunder and (ii) with respect to any lease that does not result in a Capital Lease Obligation, the principal amount of the Capital Lease Obligation that would result if such lease was treated as a Capital Lease Obligation (assuming an interest rate for such lease equal to the interest rate applicable to the Notes).
Attributed Principal Amount means, on any day, with respect to any Permitted Receivables Financing entered into by the Company or any Restricted Subsidiary, the aggregate amount (with respect to any such transaction, the Invested Amount) paid to, or borrowed by, such Person as of such date under such Permitted Receivables Financing, minus the aggregate amount received by the applicable Receivables Financier and applied to the reduction of the Invested Amount under such Permitted Receivables Financing.
Authentication Agent means an institution, reasonably acceptable to the Company, appointed by the Trustee to authenticate the Notes.
Available Amount means, at any time, an amount equal to the sum, without duplication, of:
(a) 50% of Consolidated Net Income of the Company for the period (taken as a single accounting period (but excluding any fiscal quarter occurring solely during a Suspension Period)) commencing on the first day of the Companys first full fiscal quarter commencing after the Issue Date and ending on the last day of the most recent fiscal quarter for which internal financial statements are available at such time (or, if such aggregate cumulative Consolidated Net Income of the Company for such period shall be a deficit, minus 100% of such deficit); plus
(b) 100% of the Equity Interest Sale Proceeds or other capital contributions received by the Company (other than from a Subsidiary of the Company) following the Issue Date and prior to such time to the extent such proceeds have not been utilized as the basis the making of any Restricted Payment (other than pursuant to clause (c) of the first paragraph of Section 4.05); plus
(c) 100% of the net cash proceeds received by the Company or a Restricted Subsidiary (other than from the Company or a Subsidiary of the Company) from the issuance or sale of Debt of the Company or a Restricted Subsidiary following the Issue Date to the extent such Debt has been converted into or exchanged for Equity Interests (other than Disqualified Equity Interests) of the Company prior to such time; plus
(d) the aggregate amount of cash returns received by the Company or any Restricted Subsidiary (other than from the Company or a Subsidiary) from any Restricted Investment made pursuant to clause (c) of the first paragraph of Section 4.05 prior to such time (including upon the disposition of any such Investment); plus
-3-
(e) the Fair Market Value of the Companys and its Restricted Subsidiaries Restricted Investments in any Unrestricted Subsidiary at the time it is designated as a Restricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made pursuant to clause (c) of the first paragraph of Section 4.05.
Average Life means, as of any date of determination, with respect to any Debt or Preferred Stock, the quotient obtained by dividing:
(a) the sum of the product of the numbers of years (rounded to the nearest one-twelfth of one year) from the date of determination to the dates of each successive scheduled principal payment of that Debt or redemption or similar payment with respect to that Preferred Stock multiplied by the amount of the payment by
(b) the sum of all payments of this kind.
Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.
Board of Directors means the Board of Directors of the Company (or, in the case of clause (b) of the first paragraph of Section 4.09, the applicable Restricted Subsidiary) or any committee thereof duly authorized to act on behalf of such Board of Directors.
Business Day means each day that is not a Legal Holiday.
Capital Lease Obligation means any obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of Debt represented by that obligation shall be the capitalized amount of the obligations determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under that lease prior to the first date upon which that lease may be terminated by the lessee without payment of a penalty. For purposes of Section 4.06, a Capital Lease Obligation shall be deemed secured by a Lien on the Property being leased.
Cash Equivalents means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
(b) investments in (1) commercial paper and variable or fixed rate notes issued by (A) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (B) any bank whose short-term commercial paper rating from S&P is at least A-1 or from Moodys is at least P-1 (any such bank described in this clause (b) being an Approved Bank) (or by the parent company thereof) or (2) any commercial paper or variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 or better by S&P or P-1 or better by Moodys, and in each case maturing within 270 days from the date of acquisition thereof;
(c) investments in certificates of deposit, bankers acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any Approved Bank;
(d) repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (b) above;
-4-
(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moodys and (iii) have portfolio assets of at least $5,000,000,000; and
(f) other investments made for cash management purposes in any jurisdiction outside the United States where the Company or its Restricted Subsidiaries conduct business that are classified as cash equivalents in accordance with GAAP.
Change of Control means the occurrence of any of the following after the Spinoff:
(1) any person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act except that a person will be deemed to be the beneficial owner of any Equity Interests of the Company has the right to acquire, whether that right is exercisable immediately or only after the passage of time), directly or indirectly (including as a result of a merger or consolidation of the Company), of more than 50% of the voting power of the Equity Interests of the Company, entitled to vote for members of the Board of Directors on a fully diluted basis;
(2) the sale, lease or transfer (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries, taken as a whole, to any Person other than the Company or a Restricted Subsidiary; or
(c) the shareholders of the Company shall have approved any plan of liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Person shall not be deemed to have beneficial ownership of Equity Interests subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement unless such Person has the right to vote or direct the voting of such Equity Interests.
Clearstream means Clearstream Banking, Société Anonyme or any successor securities clearing agency.
Code means the Internal Revenue Code of 1986, as amended.
Company means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, means the successor.
ConAgra means ConAgra Foods, Inc., a Delaware corporation, which is expected to be renamed Conagra Brands, Inc. in connection with the Spinoff.
Consolidated EBITDA means, for any period, for the Company and its Restricted Subsidiaries on a consolidated basis, an amount equal to:
(a) Consolidated Net Income for such period, plus
(b) other than with respect to clause (iv) below, an amount which, in the determination of Consolidated Net Income for such period, has been deducted for, without duplication: (i) Consolidated Interest Expense, (ii) provision for taxes based on income, profits or capital of the Company and its Restricted Subsidiaries, including, without limitation, federal, state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations, (iii) depreciation and amortization expense and all other non-cash charges (including impairment charges), expenses or losses (except for any such expense that (x) requires accrual of a reserve for anticipated future cash payments for any period or (y) represents a write-down of current assets), (iv) (1) pro forma costs savings permitted to be reflected in pro forma financial statements prepared in accordance with Regulation S-X of the Exchange Act and (2) the amount of pro forma cost
-5-
savings, operating expense reductions and synergies (collectively, Cost Savings) that are reasonably expected by the Company to result over the next succeeding four fiscal quarter period (calculated as though such Cost Savings had been realized on the first day of such period) as a result of, or in connection with, actions (including any acquisition or disposition of a Restricted Subsidiary or line of business, in each case, outside the ordinary course of business) consummated during such period or expected to be taken within twelve months, provided that (A) such Cost Savings are reasonably identifiable, quantifiable and factually supportable, (B) the aggregate amount of such Cost Savings added pursuant to this clause (iv)(2) during such period shall not exceed an amount equal to 10.0% of Consolidated EBITDA for such period (calculated without giving effect to any amounts added back pursuant to this clause (iv)(2)) and (C) such pro forma Cost Savings shall only be added back for quarters ending on or prior to the last day of the fourth full fiscal quarter following the applicable action, and in each case described in this clause (iv), no Cost Savings shall be added pursuant to this clause (iv) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period, (v) (1) non-recurring, extraordinary or unusual cash charges, expenses or losses not exceeding $25.0 million in any four fiscal quarter period and (2) all cash charges, expenses or losses in connection with the Transactions that are incurred or accrued prior to the second anniversary of the Issue Date, (vi) any contingent or deferred payments (including earn-out payments, non-compete payments and consulting payments but excluding ongoing royalty payments) made in connection with any acquisition of a Restricted Subsidiary or line of business outside the ordinary course of business, (vii) the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including any write-offs or amortization of fees and expenses related to Permitted Receivables Financings), (viii) losses from foreign exchange translation adjustments or Swap Contracts during such period, (ix) losses associated with discontinued operations (but only after such operations are no longer owned or operated by the Company or a Restricted Subsidiary), (x) income associated with discontinued operations (but only after such operations are no longer owned or operated by the Company or a Restricted Subsidiary) acquisition integration costs and fees, including cash severance payments made in connection with acquisitions, (xi) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of issuance of Equity Interests of the Company ( provided that such net cash proceeds shall not increase the Available Amount), and (xii) the fees and expenses paid to third parties during such period that directly arise out of and are incurred in connection with any acquisition, investment, asset disposition, issuance or repayment of debt, issuance of Equity Interests, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed, and including transaction expenses incurred in connection therewith) or early extinguishment of Debt to the extent such items were subject to capitalization prior to the effectiveness of Financial Accounting Standards Board Statement No. 141R, Business Combinations, but are required under such statement to be expensed currently, minus
(c) the following to the extent included in the determination of Consolidated Net Income for such period, without duplication: (i) non-cash credits, income or gains, including non-cash gains from foreign exchange translation adjustments or Swap Contracts during such period (but excluding any non-cash credits, income or gains that represent an accrual in the ordinary course), (ii) any extraordinary or unusual income or gains (including amounts received on early terminations of Swap Contracts), and (iii) any federal, state, local and foreign income tax credits;
provided that, notwithstanding anything to the contrary contained herein (but subject to adjustments on a Pro Forma Basis for events occurring after the Issue Date), (x) Consolidated EBITDA for the portion of the fiscal quarter in which the Issue Date occurs for the period prior to the Issue Date shall be calculated in a manner consistent with the methodology used to calculate the deemed Consolidated EBITDA amounts provided below for each of the fiscal quarters ending on the date set forth below, and (y) Consolidated EBITDA shall be deemed to be the amount set forth below opposite such fiscal quarter:
-6-
Fiscal Quarter |
Consolidated EBITDA | |
Thirteen weeks ended February 28, 2016 |
$170.8 million | |
Thirteen weeks ended May 29, 2016 |
$157.6 million | |
Thirteen weeks ended August 28, 2016 |
$171.9 million |
Consolidated Fixed Charges means, for any period, the total interest expense (net of interest income) of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent Incurred by the Company or its Restricted Subsidiaries, without duplication,
(a) interest expense with respect to Capital Lease Obligations,
(b) amortization of debt discount,
(c) capitalized interest,
(d) non-cash interest expense,
(e) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing,
(f) net costs associated with Swap Contracts relating to interest rates (including amortization of fees) (it being understood that any net benefits associated with Swap Contracts relating to interest rates shall be included in interest income),
(g) Disqualified Equity Interest Dividends, excluding dividends paid in Qualified Equity Interests,
(h) Preferred Stock Dividends,
(i) interest Incurred in connection with Investments in discontinued operations, and
(j) interest accruing on any Debt of any other Person to the extent that Debt is guaranteed by the Company or any Restricted Subsidiary.
Notwithstanding anything to the contrary contained herein, (i) amortization or write-off of debt issuance costs, deferred financing or liquidity fees, commissions, fees and expenses, call premiums, (ii) any expensing of bridge, commitment and other financing fees and (iii) commissions, discounts, yield and other fees and charges Incurred in connection with any transaction (including, without limitation, any Permitted Receivables Financing) pursuant to which the Company or any Subsidiary of the Company may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets of the type specified in the definition of Permitted Receivables Financing shall not be included in Consolidated Fixed Charges.
Consolidated Fixed Charges Coverage Ratio means, as of any date of determination, the ratio of:
(a) the aggregate amount of EBITDA for the most recent four consecutive fiscal quarters for which internal financial statements are available on such determination date to
(b) Consolidated Fixed Charges for those four fiscal quarters;
provided , however , that the Consolidated Fixed Charges Coverage Ratio shall be calculated on a Pro Forma Basis.
Consolidated Funded Debt means, as of any date of determination with respect to the Company and its Restricted Subsidiaries on a consolidated basis, without duplication, the sum of: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term, and all obligations evidenced by
-7-
bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) all obligations arising under letters of credit (including standby and commercial), but only to the extent consisting of unpaid reimbursement obligations in respect of drawn amounts under letters of credit; (c) all Capital Lease Obligations; (d) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments to the extent not fixed and payable, and trade debt Incurred in the ordinary course of business) which would appear as liabilities on a balance sheet in accordance with GAAP; (e) all Disqualified Equity Interests of such Persons; (f) all guarantees by the Company or a Restricted Subsidiary with respect to outstanding Debt of the type specified in clauses (a) through (e) above of another Person; and (g) all Debt of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity organized under the laws of a jurisdiction other than the United States or a state thereof) in which the Company or any of its Restricted Subsidiaries is a general partner or joint venturer, except to the extent that Debt is expressly made non-recourse to such Person.
Consolidated Interest Expense means, for any period, for the Company and its Restricted Subsidiaries on a consolidated basis without duplication, the following (in each case as determined in accordance with GAAP): (a) all interest in respect of Consolidated Funded Debt (including the interest component of synthetic leases, account receivables securitization programs, off balance sheet loans or similar off balance sheet financing products) accrued during such period (whether or not actually paid during such period) determined after giving effect to any net payments made or received under interest rate Swap Contracts minus (b) the sum of (i) all interest income during such period and (ii) to the extent included in clause (a) above, the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including write-offs or amortization of fees and expenses related to Permitted Receivables Financings), and amounts paid (or plus any amounts received) on early terminations of Swap Contracts plus (c) the loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing.
Consolidated Net Income for any period means the consolidated net income (or loss) attributable to the Company for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person that is not a Restricted Subsidiary, except (i) to the extent such income has actually been distributed in cash to the Company or any Restricted Subsidiary during such period and (ii) in the case of the Existing Joint Ventures, for other equity of the Company and its Restricted Subsidiaries in the earnings of the Existing Joint Ventures in excess of the amount included pursuant to clause (1)(i) so long as the amount included in this clause (1)(ii) for any period does not exceed 6.0% of Consolidated EBITDA for such period,
(2) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP,
(3) the cumulative effect of any change in accounting principles, and
(4) gains and losses from dispositions of assets outside the ordinary course of business or upon early retirement of Debt.
Consolidated Net Leverage Ratio means, on any date, the ratio, determined on a Pro Forma Basis, of (a) Consolidated Funded Debt on such date, minus (i) unrestricted cash and Cash Equivalents of the Company and the Guarantors (it being agreed that cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Debt or (y) to the extent proceeds of Debt Incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Debt shall be considered unrestricted to the extent the related Debt is included in Consolidated Funded Debt) and (ii) to the extent not prohibited from being distributed to the Company or any Guarantor pursuant to any applicable law, contractual obligation or organizational document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Guarantors (it being agreed that cash or Cash Equivalents segregated or held in escrow to prepay Debt or to consummate an acquisition shall be considered unrestricted) to (b) Consolidated EBITDA for the period of four
-8-
consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date for which internal financial statements are available at such time).
Consolidated Secured Net Leverage Ratio means, on any date, the ratio, determined on a Pro Forma Basis, of (a) Consolidated Funded Debt on such date that is secured by any Lien on any assets of the Company or a Restricted Subsidiary, minus (i) unrestricted cash and Cash Equivalents of the Company and the Guarantors (it being agreed that cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Debt or (y) to the extent proceeds of Debt Incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Debt shall be considered unrestricted to the extent the related Debt is included in Consolidated Funded Debt) and (ii) to the extent not prohibited from being distributed to the Company or any Guarantor pursuant to any applicable law, contractual obligation or organizational document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Guarantors (it being agreed that cash or Cash Equivalents held in escrow to prepay Debt Incurred to consummate an acquisition shall be considered unrestricted) to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date for which internal financial statements are available at such time).
Consolidated Total Assets means, as of any date of determination, the total assets of the Company and its Restricted Subsidiaries on a consolidated basis (measured as of the last day of the fiscal quarter most recently ended prior to such date of determination for which internal financial statements are available).
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlled has a meaning correlative thereto.
Credit Facilities means, with respect to the Company or any Restricted Subsidiary, one or more debt facilities or commercial paper facilities (including related guarantees and including indentures and note purchase agreements) with banks, investment banks, insurance companies, mutual funds or other institutional lenders (including the Senior Secured Credit Facilities), providing for revolving credit loans, term loans or notes or trade or standby letters of credit, in each case together with any Refinancing thereof on any basis so long as such Refinancing constitutes Debt.
Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
Debt means, as of any date of determination with respect to any Person, without duplication: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) the maximum amount available to be drawn under letters of credit (including standby and commercial) and bankers acceptances, including unpaid reimbursement obligations in respect of drawn amounts under letters of credit or bankers acceptance facilities; (c) all Attributable Debt and Capital Lease Obligations and attributable indebtedness under synthetic leases, account receivables securitization programs, off-balance sheet loans or similar off-balance sheet financing products; (d) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business); (e) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments, and trade debt Incurred in the ordinary course of business) which would appear as liabilities on a balance sheet; (f) all Disqualified Equity Interests issued by such Person; (g) all net obligations of such Person under Swap Contracts; (h) all guarantees with respect to outstanding Debt of the type specified in clauses (a) through (g) above of another person; (i) all Debt of the type specified in clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; provided that if such Person has not assumed such obligations, then the amount of Debt of such Person for purposes of this clause (i) shall be
-9-
equal to the lesser of the amount of the obligations of the holder of such obligations and the Fair Market Value of the assets of such Person which secure such obligations; and (j) all Debt of the types referred to in clauses (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity organized under the laws of a jurisdiction other than the United States or a state thereof) in which such Person is a general partner or joint venturer, except to the extent that Debt is expressly made non-recourse to such Person.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default will be deemed to be cured if such previous Default is cured prior to becoming an Event of Default.
Definitive Note means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.07(c) hereof, substantially in the form of Exhibit A except that such Note shall not bear the Global Notes Legend and shall not have the Schedule of Increases or Decreases in Global Note attached thereto.
Depositary means, with respect to the Notes issuable or issued in whole or in part in global form, any Person specified in Section 2.04 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
Designated Non-Cash Consideration means the Fair Market Value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officers Certificate, setting forth such valuation, less the amount of cash or cash equivalents received by the Company or a Restricted Subsidiary (other than from the Company or a Restricted Subsidiary) in connection with a subsequent Asset Sale of such Designated Non-Cash Consideration.
Disqualified Equity Interest Dividends means all dividends with respect to Disqualified Equity Interests of the Company held by Persons other than a Restricted Subsidiary.
Disqualified Equity Interests means any Equity Interest that, by its terms (or by the terms of any other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests and other than as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes), or (c) is or becomes convertible into or exchangeable for Debt or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Stated Maturity of the Notes at the time of issuance of such Equity Interests, but only with respect to that portion of the Equity Interests that would satisfy clauses (a) through (c) prior to the date that is ninety-one (91) days after the Stated Maturity of the Notes at the time of issuance of such Equity Interests; provided that (x) if such Equity Interests are issued pursuant to a plan for the benefit of employees of the Company or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Company or its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations and (y) if such Equity Interests are held by any future, present or former employee, director, officer, manager, member of management or consultant (or their respective Affiliates or immediate family members) of the Company or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.
Dollar Equivalent means, with respect to any monetary amount in a currency other than U.S. dollars, at any time for the determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published by the Federal Reserve Board on the date of such determination.
-10-
Domestic Subsidiary means any Subsidiary of the Company that is incorporated or organized under the laws of the United States, any state thereof or the District of Columbia.
DTC means The Depository Trust Company.
Equity Interest Sale Proceeds means the aggregate net proceeds (including the Fair Market Value of marketable securities or other property other than cash) received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or the Subsidiary for the benefit of their employees) by the Company of its Equity Interests (other than Disqualified Equity Interests) after the Issue Date, net of attorneys fees, accountants fees, initial purchasers or placement agents fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with the issuance or sale and net of taxes paid or payable as a result thereof.
Equity Interests means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination, in any case other than Debt securities convertible into or exchangeable for such capital stock or other ownership or profit interests or warrants, options or other rights for the purchase or acquisition of such capital stock or other ownership or profit interests.
Equity Offering means any public or private sale of common stock or Preferred Stock of the Company (excluding Disqualified Equity Interests), other than (1) public offerings with respect to any of the Companys common stock registered on Form S-4 or Form S-8 (or any successor form) and (2) issuances to any Subsidiary of the Company.
Euroclear means Euroclear Bank S.A./N.V., as operator of the Euroclear system, or any successor securities clearing agency.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Existing Joint Ventures means Lamb-Weston/Meijer v.o.f., Lamb-Weston/RDO Frozen, Inc., and Lamb Weston BSW, LLC.
Fair Market Value means with respect to any Property or liability, the fair market value of such Property or liability as determined in good faith by the Company (including as to the fair market value of all non-cash Properties and liabilities).
Foreign Restricted Subsidiary means (a) any Restricted Subsidiary that is organized and existing under the laws of a jurisdiction other than the United States, any State thereof or the District of Columbia, (b) any direct or indirect Restricted Subsidiary of a Foreign Restricted Subsidiary described in clause (a), and (c) any Restricted Subsidiary incorporated or otherwise organized under the laws of the United States or any State thereof or the District of Columbia that has no material assets other than Equity Interests in one or more Foreign Restricted Subsidiaries described in clause (a).
Foreign Subsidiary means any direct or indirect Subsidiary that is not a Domestic Subsidiary.
Form 10 means the registration statement on Form 10 of the Company, filed with the SEC on July 13, 2016 and as amended through October 17, 2016.
-11-
GAAP means United States generally accepted accounting principles as in effect on the Issue Date, including those set forth in the Accounting Standards Codification of the Financial Accounting Standards Board and in the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act.
Global Notes means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A, issued in accordance with Section 2.01, 2.07(b) or 2.07(d) hereof.
Global Notes Legend means the legend set forth in Section 2.07(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.
Guarantee means the guarantee by any Guarantor of the Companys obligations under this Indenture and the Notes.
guarantee means, 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 Debt of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (a) to purchase any such Debt or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or purchase of any such Debt or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements or similar agreements or arrangements) for the benefit of any holder of Debt of such other Person, (c) to lease or purchase assets, securities or services primarily for the purpose of assuring the holder of such Debt, or (d) to otherwise assure or hold harmless the holder of such Debt against loss in respect thereof. The amount of any guarantee shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Debt in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term guaranteed has a meaning correlative thereto.
Guarantor means each Restricted Subsidiary of the Company that executes this Indenture on the Issue Date and each other Restricted Subsidiary of the Company that thereafter guarantees the Notes pursuant to the terms of this Indenture.
Holder means the Person in whose name the Note is registered on the Note register described in Section 2.04.
Incur means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee or become liable in respect of that Debt or other obligation or the recording, as required pursuant to GAAP or otherwise, of any Debt or obligation on the balance sheet of that Person (and Incurrence and Incurred shall have meanings correlative to the foregoing); provided , however , that a change in GAAP that results in an obligation of that Person that exists at such time, and is not theretofore classified as Debt, becoming Debt shall not be deemed an Incurrence of that Debt; provided further , however , that any Debt or other obligations of a Person existing at the time the Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by that Subsidiary at the time it becomes a Subsidiary; and provided further , however , that solely for purposes of determining compliance with Section 4.04, the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Debt, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preferences and increases in the amount of Debt outstanding solely as a result of fluctuations in the applicable Dollar Equivalent amount of any Debt will not be deemed to be an Incurrence of Debt, provided that in the case of Debt sold at a discount or at a premium, the amount of the Debt Incurred shall at all times be the aggregate principal amount at Stated Maturity.
Indenture means this Indenture as amended or supplemented from time to time.
-12-
Indirect Participant means a Person who holds a beneficial interest in a Global Note through a Participant.
Initial Notes has the meaning in the second paragraph of the preamble.
Investment by any Person means any direct or indirect loan (other than advances to customers and suppliers in the ordinary course of business), advance or other extension of credit or capital contribution (by means of transfers of cash or other Property to others or payments for Property or services for the account or use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase or acquisition of Equity Interests, bonds, notes, debentures or other securities or evidence of Debt issued by, any other Person. For purposes of Section 4.05, Section 4.10 and the definitions of Restricted Payment and Permitted Investment, an Investment shall include the portion (proportionate to the Companys equity interest in the Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that the Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of that Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary of an amount (if positive) equal to:
(a) the Companys Investment in that Subsidiary at the time of such redesignation, less
(b) the portion (proportionate to the Companys equity interest in such Subsidiary) of the Fair Market Value of the net assets of that Subsidiary at the time of such redesignation.
In determining the amount of any Investment made by transfer of any Property other than cash, the Property shall be valued at its Fair Market Value at the time of the Investment.
Investment Grade Rating means a rating of the Notes of at least Baa3 by Moodys and at least BBB- by S&P (or, if either such Rating Agency shall cease to provide such a rating of the Notes, an equivalent rating from a replacement Rating Agency).
Issue Date means November 9, 2016.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York or at a place of payment.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Limited Condition Acquisition means any acquisition, including by means of a merger, amalgamation or consolidation, by the Company or one or more of its Restricted Subsidiaries, the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Company or its Restricted Subsidiaries to the seller or target if financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement in respect thereof.
Moodys means Moodys Investors Service, Inc. and any successor thereto.
Net Available Cash from any Asset Sale means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, including after release from any required escrow, but excluding any other consideration received in the form of assumption by the acquiring Person of Debt or other obligations relating to the Property that is the subject of that Asset Sale or received in any other non-cash form), in each case net of:
-13-
(a) all legal, title and recording tax expenses, commissions and other fees (including, without limitation, brokers or investment bankers commissions or fees) and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or reasonably expected to be paid or accrued as a liability under GAAP, as a consequence of the Asset Sale,
(b) all payments made on any Debt that is secured by any Property subject to the Asset Sale, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to that Property, or which must by its terms, or in order to obtain a necessary consent to the Asset Sale, or by applicable law, be repaid out of the proceeds from the Asset Sale,
(c) all distributions and other payments required to be made to noncontrolling interest holders in Subsidiaries or joint ventures as a result of the Asset Sale,
(d) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the Property disposed in the Asset Sale and retained by the Company or any Restricted Subsidiary after the Asset Sale, and
(e) payments of unassumed liabilities (not constituting Debt) relating to the Property that is the subject of the Asset Sale at the time of, or within 30 days after, such Asset Sale.
Non-U.S. Person means a Person who is not a U.S. Person.
Notes has the meaning in the second paragraph of the preamble.
Notes Custodian means the Trustee, as custodian with respect to the Global Notes, or any successor entity thereto.
Obligations means, with respect to any Debt, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to the documentation governing such Debt.
Offering Circular means the offering circular, dated November 1, 2016, relating to the offering of the Initial Notes.
Officer means the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Assistant Treasurer, the Secretary or the Assistant Secretary of the Company.
Officers Certificate means a certificate signed by an Officer of the Company and delivered to the Trustee.
Opinion of Counsel means a written opinion from legal counsel which is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.
Pari Passu Debt means: (a) with respect to the Company, the Notes and any Debt which ranks pari passu in right of payment to the Notes (including the 2024 Notes); and (b) with respect to any Guarantor, its Guarantee and any Debt which ranks pari passu in right of payment to such Guarantors Guarantee (including its guarantee of the 2024 Notes).
Participant means, with respect to the Depositary, a Person who has an account with the Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).
Permitted Business means any business that is reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged in on the Issue Date.
-14-
Permitted Encumbrances means:
(a) Liens imposed by law for taxes that are not yet delinquent or are being contested in good faith;
(b) carriers, warehousemens, mechanics, materialmens, repairmens, landlords and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith;
(c) pledges and deposits under workers compensation, unemployment insurance and other social security laws or regulations;
(d) deposits or pledges to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments (or appeal or surety bond relating to such judgments) that do not constitute an Event of Default;
(f) easements, zoning restrictions, licenses, title restrictions, rights-of-way and similar encumbrances on real property imposed by law or incurred or granted by the Company or any Subsidiary in the ordinary course of business that do not secure any material monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Company or any Subsidiary; and
(g) minor imperfections in title that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Company or any Subsidiary;
provided that the term Permitted Encumbrances shall not include any Lien securing Debt for borrowed money.
Permitted Investments means:
(1) any Investment by the Company or any of its Restricted Subsidiaries in the Company or any of its Restricted Subsidiaries;
(2) any Investment in cash or Cash Equivalents and Investments that were Cash Equivalents when made;
(3) any Investment by the Company or any of its Restricted Subsidiaries in a Person if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,
and, in each case, any Investment held by such Person at the time such Person becomes a Restricted Subsidiary; provided , that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation, amalgamation, transfer or conveyance;
(4) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.07 or any other disposition of assets not constituting an Asset Sale;
-15-
(5) any Investment (a) existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date, (b) made pursuant to the Transaction Agreements or (c) consisting of any replacement, refinancing, extension, modification or renewal of any Investment existing on the Issue Date or made pursuant to the Transaction Agreements; provided that the amount of any such Investment may only be increased (i) as required by the terms of such Investment as in existence on the Issue Date, or (ii) as otherwise permitted under the applicable indenture;
(6) any Investment acquired by the Company or any of its Restricted Subsidiaries:
(a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable;
(b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or
(c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates of the Company;
(7) Swap Contracts permitted under clause (g) of the second paragraph of Section 4.04;
(8) Investments (a) the payment for which consists of Equity Interests (exclusive of Disqualified Equity Interests) of the Company or (b) made using the proceeds of a substantially concurrent offering (with any offering completed within 90 days deemed as being substantially concurrent) of Equity Interests (other than Disqualified Equity Interests) of the Company; provided , however , that such Investment or proceeds, as applicable, will be excluded from the calculation of Equity Interest Sale Proceeds;
(9) guarantees of Debt permitted under Section 4.04;
(10) Investments consisting of (a) purchases and acquisitions of inventory, supplies, material, services or equipment, or other similar assets or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business or (b) non-exclusive licensing of intellectual property in the ordinary course of business or the leasing, licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(11) additional Investments in an aggregate amount (based on the original cost thereof and without giving effect to subsequent changes in value) taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed the greater of (x) $300.0 million and (y) 12.00% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the making of such Investment for which internal financial statements are available at such time), provided that if such Investment is in Equity Interests of a Person that subsequently becomes a Restricted Subsidiary, such Investment shall thereafter be deemed made under clause (1) or (3) above and shall not be included as having been made pursuant to this clause (11);
(12) advances to, or guarantees of Debt of, officers, directors and employees of the Company or its Subsidiaries not in excess of $10.0 million outstanding at any one time, in the aggregate;
(13) loans and advances to officers, directors and employees of the Company or its Subsidiaries for business-related travel expenses, moving expenses, payroll expenses and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practice or to fund such Persons direct or indirect purchase of Equity Interests of the Company;
(14) any Investment in any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;
-16-
(15) endorsements for collection or deposit in the ordinary course of business;
(16) Investments resulting from pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or that are made in connection with Permitted Liens;
(17) advances, prepayments, loans or extensions of credit to customers and suppliers in the ordinary course of business;
(18) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(19) operating deposit accounts with depository institutions and other ordinary course cash management; and
(20) deposits to secure bids, tenders, utilities, vendors, leases, licenses, statutory obligations, surety and appeal bonds, performance bonds and other deposits of like nature arising in the ordinary course of business;
(21) investments by any Receivables Financing SPC, the Company or any Restricted Subsidiary in a Receivables Financing SPC in each case made in connection with a Permitted Receivables Financing, and loans permitted by the applicable Permitted Receivables Financing that are made by the Company or a Restricted Subsidiary to a Receivables Financing SPC or by a Receivables Financing SPC to the Company or a Restricted Subsidiary in connection therewith;
(22) Investments consisting of non-cash consideration received in any Asset Sale;
(23) Investments in prepaid expenses, utility and workers compensation, performance and other similar deposits, each as entered into in the ordinary course of business;
(24) Investments consisting of the licensing, sublicensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons; and
(25) the Transactions.
Permitted Liens means:
(a) Liens to secure Debt (i) permitted to be Incurred under clause (b) of the second paragraph of Section 4.04 regardless of whether the Company and the Restricted Subsidiaries are actually subject to Section 4.04 at the time the Lien is Incurred and (ii) in respect of any guarantee by the Company or any Restricted Subsidiary of Debt permitted by clause (l)(y) of the second paragraph of Section 4.04;
(b) Permitted Encumbrances;
(c) Liens securing Swap Contracts permitted by clause (g) of the second paragraph of Section 4.04;
(d) Liens on the Property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, including bankers liens and rights of set-off, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of Property and which do not in the aggregate impair in any material respect the use of Property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole;
-17-
(e) Liens on Property at the time the Company or any Restricted Subsidiary acquired the Property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided , however , that any Lien of this kind may not extend to any other Property of the Company or any Restricted Subsidiary other than additions thereto and proceeds and products thereof; provided further , however , that the Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which the Property was acquired by the Company or any Restricted Subsidiary;
(f) Liens on the Property of a Person at the time that Person becomes a Restricted Subsidiary; provided , however , that any Lien of this kind may not extend to any other Property of the Company or any other Restricted Subsidiary other than additions thereto and proceeds and products thereof; provided further , however , that the Lien was not Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which the Person became a Restricted Subsidiary;
(g) pledges or deposits by the Company or any Restricted Subsidiary under workers compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Restricted Subsidiary is party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits for the payment of rent, in each case Incurred in the ordinary course of business;
(h) Liens, assignments and pledges of rights to receive premiums, interest or loss payments or otherwise arising in connection with workers compensation loss portfolio transfer insurance transactions or any insurance or reinsurance agreements pertaining to losses covered by insurance, and Liens (including, without limitation and to the extent constituting Liens, negative pledges) in favor of insurers or reinsurers on pledges or deposits by the Company or any Restricted Subsidiary under workmens compensation laws, unemployment insurance laws or similar legislation;
(i) utility easements, building restrictions and such other encumbrances or charges against real Property as are of a nature generally existing with respect to properties of a similar character;
(j) Liens to secure Debt permitted by clause (c) of the second paragraph of Section 4.04; provided that such Liens attach only to the assets acquired, constructed or improved with the proceeds of the applicable Debt (or the Debt refinanced with Permitted Refinancing Debt) and additions thereto and products and proceeds thereof;
(k) Liens in favor of surety bonds or letters of credit issued pursuant to the request of and for the account of the Company or a Restricted Subsidiary in the ordinary course of its business, provided that these letters of credit do not constitute Debt;
(l) leases or subleases of real property granted by the Company or a Restricted Subsidiary to any other Person in the ordinary course of business and not materially impairing the use of the real property in the operation of the business of the Company or the Restricted Subsidiary;
(m) Liens on intellectual property arising from intellectual property licenses entered into in the ordinary course of business;
(n) Liens attaching to or related to joint ventures, restricting Liens on interests in those joint ventures;
(o) Liens existing on the Issue Date not otherwise described in clause (a) above;
(p) Liens on (x) the Property of any Foreign Restricted Subsidiary to secure any Debt permitted to be Incurred by the Foreign Restricted Subsidiary pursuant to Section 4.04 and (y) the Property of the Company or any Restricted Subsidiary to secure any Debt permitted to be Incurred under clause (k) of such Section;
-18-
(q) Liens on the Property of the Company or any Restricted Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured by Liens referred to in clause (e), (f) or (o) above; provided , however , that any Lien of this kind shall be limited to all or part of the same Property that secured the original Lien (together with improvements and accessions to such Property) and the aggregate principal amount of Debt that is secured by the Lien shall not be increased to an amount greater than the sum of:
(1) the outstanding principal amount of the Debt secured by Liens described under clause (e), (f) or (o) below, as the case may be, at the time the original Lien became a Permitted Lien under this Indenture, and
(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, incurred by the Company or the Restricted Subsidiary in connection with the Refinancing;
(r) Liens not otherwise permitted by clauses (a) through (q) above securing Debt permitted by Section 4.04, so long as on a Pro Forma Basis (but excluding the cash proceeds of such Debt for purposes of calculating the Consolidated Secured Net Leverage Ratio), the Consolidated Secured Net Leverage Ratio does not exceed 1.50 to 1.00;
(s) Liens on cash or Cash Equivalents deposited with the Trustee or similar agent for the holders of any Debt pending the payment, purchase, defeasance or other retirement of such Debt in connection with a Refinancing;
(t) Liens not otherwise permitted by clauses (a) through (s) above securing Debt and other obligations in an aggregate principal amount not in excess of the greater of (i) $100.0 million and (ii) 4.5% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(u) leases, licenses, subleases or sublicenses and Liens on the property covered thereby, in each case, granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Company or any Restricted Subsidiary, taken as a whole, or (ii) secure any Debt;
(v) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Company or any Restricted Subsidiary in the ordinary course of business permitted by this Indenture;
(w) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts Incurred in the ordinary course of business and not for speculative purposes;
(x) Liens that are contractual rights of set-off or rights of pledge (i) relating to the establishment of depository relations with banks or other deposit-taking financial institutions and not given in connection with the issuance of Debt, (ii) relating to pooled deposit or sweep accounts of the Company or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations Incurred in the ordinary course of business of the Company or any of the Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of any Restricted Subsidiary in the ordinary course of business;
(y) Liens on any cash earnest money deposits made by the Company or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Indenture;
-19-
(z) Liens consisting of an agreement to dispose of any Property in a sale, transfer, lease, license or other disposition permitted under this Indenture, to the extent that such sale, transfer, lease, license or other disposition would have been permitted on the date of the creation of such Lien;
(aa) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(bb) Liens on specific items of inventory or other goods and the proceeds thereof securing such Persons obligations in respect of documentary letters of credit or bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;
(cc) Liens on Property subject to any Sale and Leaseback Transaction permitted under this Indenture and general intangibles related thereto; and
(dd) Liens securing obligations under Swap Contracts in a net amount not to exceed $50.0 million.
Permitted Receivables Financing means any one or more receivables financings in which (a) the Company or any Restricted Subsidiary (i) conveys or sells any accounts (as defined in the Uniform Commercial Code as in effect in the State of New York), payment intangibles (as defined in the Uniform Commercial Code as in effect in the State of New York), notes receivable or residuals (collectively, together with certain property relating thereto and the right to collections thereon and any proceeds thereof, being the Transferred Assets) to any Person that is not a Subsidiary or Affiliate of the Company (with respect to any such transaction, the Receivables Financier), (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets and/or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to the Receivables Financier or (b) the Company or any Restricted Subsidiary sells, transfers, conveys or otherwise contributes any Transferred Assets to a Receivables Financing SPC, which Receivables Financing SPC then (i) conveys or sells any such Transferred Assets (or an interest therein) to another Receivables Financier, (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to such Receivables Financier; provided that, as to either clause (a) or (b), (A) the aggregate Attributed Principal Amount for all such financings shall not at any one time exceed $100.0 million and (B) such financings shall not involve any recourse to the Company or any Restricted Subsidiary (other than a Receivables Financing SPC) for any reason other than (v) repurchases of non-eligible assets, (w) indemnifications for losses or dilution other than credit losses related to the Transferred Assets, (x) any obligations not constituting Debt under servicing arrangements for the receivables, (y) any interest rate swaps or currency swaps permitted hereunder and entered into in connection with a Permitted Receivables Financing on a back to back basis with swaps entered into by a Receivables Financing SPC or (z) representations, warranties, covenants, indemnities and guarantees of performance entered into by the Company or any Restricted Subsidiary which the Company has determined in good faith to be customary in a non-recourse receivables financing.
Permitted Refinancing Debt means any Debt that Refinances any other Debt, including any successive Refinancings, so long as:
(a) the new Debt is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:
(1) the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Debt being Refinanced, and
(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, related to the Refinancing,
-20-
(b) the Average Life of the new Debt is equal to or greater than the Average Life of the Debt being Refinanced,
(c) the Stated Maturity of the new Debt is no earlier than the Stated Maturity of the Debt being Refinanced, and
(d) the new Debt shall not be senior in right of payment to the Debt that is being Refinanced;
provided , however , that Permitted Refinancing Debt shall not include:
(x) Debt of a Subsidiary that is not a Guarantor that Refinances Debt of the Company or a Guarantor, or
(y) Debt of the Company or a Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
Person means any individual, corporation, company (including any limited liability company), association, partnership, joint venture, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Preferred Stock means any Equity Interests of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of that Person, over shares of any other class of Equity Interests issued by that Person.
Preferred Stock Dividends means all dividends with respect to Preferred Stock of Restricted Subsidiaries held by Persons other than the Company or a Restricted Subsidiary.
principal of any Debt (including the Notes) means the principal amount of such Debt plus the premium, if any, on such Debt.
Productive Assets means assets (other than securities and inventory) that are used or usable by the Company and its Restricted Subsidiaries in Permitted Businesses.
Pro Forma Basis means, with respect to compliance with any test or covenant hereunder, that all Specified Transactions occurring prior to the end of the applicable measurement period (and following the last day of such measurement period and on or prior to the applicable date of determination) and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant and: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a disposition of all or substantially all Equity Interests in any Subsidiary of the Company owned by the Company or any of its Subsidiaries or any division or line of business, shall be excluded, and (ii) in the case of an acquisition or investment described in the definition of Specified Transaction, shall be included, (b) any retirement of Debt and (c) any Debt Incurred or assumed by the Company or any of the Subsidiaries in connection therewith and if such Debt has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Debt as at the relevant date of determination; provided that, any cost savings adjustments in connection therewith shall be subject to the limitations set forth in clause (b)(iv) of the definition of Consolidated EBITDA.
Property means, with respect to any Person, any interest of that Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including Equity Interests in, and other securities of, any other Person. For purposes of any calculation required pursuant to this Indenture, the value of any Property shall be its Fair Market Value.
Purchase Money Debt means Debt:
-21-
(a) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds, in each case where the maturity of the Debt does not exceed the anticipated useful life of the Property being financed, and
(b) Incurred to finance the acquisition, construction or lease by the Company or a Restricted Subsidiary of the Property, including additions and improvements thereto;
provided , however , that the Debt is Incurred within 180 days after the acquisition, construction or lease of the Property by the Company or Restricted Subsidiary.
QIB means a qualified institutional buyer as defined in Rule 144A.
Qualified Equity Interests means any Equity Interests of the Company that is not Disqualified Equity Interests.
Rating Agency means each of Moodys and S&P; provided that if either such agency shall cease to provide ratings of the Notes for reasons beyond the Companys control, then such term shall also include any replacement credit ratings agency of nationally recognized standing that is selected by the Company.
Receivables Financier has the meaning set forth in the definition of Permitted Receivables Financing.
Receivables Financing SPC means (1) a wholly owned direct Subsidiary of the Company which engages in no activities other than in connection with the financing of Transferred Assets pursuant to a Permitted Receivables Financing that meets the following criteria: (a) no portion of the Debt or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any other Restricted Subsidiary of the Company (excluding guarantees of obligations (other than the principal of, and interest on, Debt)) pursuant to customary securitization undertakings, (ii) is recourse to or obligates the Company or any other Restricted Subsidiary of the Company in any way (other than pursuant to customary securitization undertakings) or (iii) subjects any property or asset (other than the Transferred Assets) of the Company or any other Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to customary securitization undertakings, (b) with which neither the Company nor any of its other Restricted Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Financing documentation (including with respect to the servicing of the accounts receivable and related assets and the administration of the Receivables Financing SPC)) on terms less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Company (as determined by the Company in good faith), and (c) to which neither the Company nor any other Restricted Subsidiary of the Company has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results and (2) each general partner of any such Subsidiary described in clause (1) that meets all of the criteria set forth in clause (1).
Refinance means, in respect of any Debt, to refinance, extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other Debt, in exchange or replacement for, that Debt. Refinanced and Refinancing shall have correlative meanings.
Regulation S means Regulation S promulgated under the Securities Act.
Regulation S Global Note means a Global Note in the form of Exhibit A bearing the Global Notes Legend and the Restricted Note Legend and the Regulation S Global Notes Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Global Notes.
Regulation S Global Notes Legend means the legend set forth in Section 2.07(g)(iii) hereof.
-22-
Repay means, in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease, satisfy and discharge or otherwise retire that Debt. Repaid shall have a correlative meaning. For purposes of Section 4.07, Debt shall be considered to have been Repaid only to the extent the related loan commitment, if any, shall have been permanently reduced in connection therewith.
Restricted Definitive Note means a Definitive Note bearing, or that is required to bear, the Restricted Notes Legend.
Restricted Global Note means a Global Note bearing, or that is required to bear, the Restricted Notes Legend.
Restricted Investment means any Investment by the Company or a Restricted Subsidiary other than a Permitted Investment.
Restricted Notes Legend means the legend set forth in Section 2.07(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.
Restricted Payment means:
(a) any dividend or distribution (whether made in cash, securities or other Property) declared or paid on or with respect to any shares of Equity Interests of the Company or any Restricted Subsidiary (including any payment in connection with any merger or consolidation with or into the Company or any Restricted Subsidiary), except for any dividend or distribution that is made to the Company or the parent of the Restricted Subsidiary or any dividend or distribution payable solely in shares of Qualified Equity Interests of the Company;
(b) the purchase, repurchase, redemption, acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary (other than from the Company or any Restricted Subsidiary) (other than a purchase, repurchase, redemption, acquisition or retirement in which the consideration consists of Qualified Equity Interests of the Company);
(c) the purchase, repurchase, redemption, acquisition or retirement for value, prior to the date for any scheduled maturity, sinking fund or amortization or other installment payment, of any Subordinated Obligation (other than (i) the purchase, repurchase or other acquisition of any Subordinated Obligation purchased in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of acquisition and (ii) Debt permitted under clause (d) of the definition of Permitted Debt); or
(d) the making of any Restricted Investment.
Restricted Period means, in respect of any Note issued under Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.
Restricted Subsidiary means any Subsidiary of the Company other than an Unrestricted Subsidiary.
Rule 144A means Rule 144A promulgated under the Securities Act.
Rule 903 means Rule 903 promulgated under the Securities Act.
Rule 904 means Rule 904 promulgated under the Securities Act.
S&P means Standard & Poors Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.
-23-
Sale and Leaseback Transaction means any direct or indirect arrangement relating to Property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers that Property to another Person and the Company or a Restricted Subsidiary leases it from that other Person together with any Refinancings thereof.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Senior Secured Credit Facilities means the credit facilities provided pursuant to that certain credit agreement, dated as of the Issue Date, by and among the Company, the Guarantors, Bank of America, N.A., as administrative agent, the lenders party thereto from time to time, and the other parties thereto.
Significant Subsidiary means any Subsidiary that would be a Significant Subsidiary of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
Specified Sales means sales of (a) inventory and materials in the ordinary course of business, (b) surplus, obsolete or worn-out Property, (c) cash or Cash Equivalents, (d) Equity Interests or Debt of Unrestricted Subsidiaries, (e) accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and (f) property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such sale are applied substantially concurrently with such sale to the purchase price of similar replacement property.
Specified Transaction means any of the following: (i) any Investment by the Company or any Restricted Subsidiary in any Person (including any acquisition) other than a Person that was a Wholly Owned Restricted Subsidiary on the first day of such period involving (w) an investment in an Unrestricted Subsidiary, (x) the acquisition of a new Restricted Subsidiary or interest in a joint venture, (y) an increase in the Companys and its Restricted Subsidiaries consolidated economic ownership of a Restricted Subsidiary or (z) the acquisition of a product line or business unit, (ii) any Asset Sale involving (x) the disposition of Equity Interests of a Subsidiary or joint venture (other than to the Company or a Subsidiary) or (y) the disposition of a product line or business unit, (iii) any Incurrence or repayment of Debt (in each case, other than revolving indebtedness in the ordinary course of business under revolving credit facilities), (iv) any Restricted Payment in respect of the Companys Equity Interests, (v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or designation of an Unrestricted Subsidiary to be a Restricted Subsidiary and (vi) any other transaction specifically required to be given effect to on a Pro Forma Basis.
Spinoff means the distribution of 100% of the issued Equity Interests of the Company to the holders of the common stock of ConAgra on the Issue Date as described in the Form 10.
Stated Maturity means, with respect to any security, the date specified in the security as the fixed date on which the payment of principal of the security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of the security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless that contingency has occurred).
Subordinated Obligation means any Debt of the Company or a Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Notes pursuant to a written agreement to that effect.
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary or Subsidiaries of the Company.
Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity
-24-
index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.
TIA means the Trust Indenture Act of 1939, as amended.
Transaction Agreements means the tax matters agreement, the employee matters agreement, the transition services agreement and each of the other agreements entered into among ConAgra and/or certain of its subsidiaries (after giving effect to the Spinoff), on the one hand, and the Company and/or certain of its Subsidiaries, on the other, in each case, as contemplated by the Form 10 at or prior to the time of the Spinoff, in each case, on terms that are not less favorable in any material respect, taken as a whole, than the terms contemplated by the Form 10.
Transactions means the execution, delivery and performance by the Company and the Guarantors of the Senior Secured Credit Facilities, the borrowing of loans and other credit extensions of credit on the Issue Date under the Senior Secured Credit Facilities, the issuance of the Notes and the 2024 Notes, the payment to ConAgra of approximately $823.5 million on the Issue Date, the entering into of the Transaction Agreements, the Spinoff and the other transactions in connection therewith to occur on or prior to the Issue Date.
Transferred Assets has the meaning set forth in the definition of Permitted Receivables Financing.
Treasury Rate means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to November 1, 2021; provided , however , that if the period from the redemption date to November 1, 2021 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used. On the second Business Day preceding the applicable redemption date, the Company will (1) calculate the Treasury Rate and (2) file with the Trustee an Officers Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.
Trust Officer means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs such functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
Trustee means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code means the New York Uniform Commercial Code as in effect from time to time.
United States means the United States of America (including the states and the District of Columbia) and its territories, possessions and other areas subject to its jurisdiction.
-25-
Unrestricted Definitive Note means a Definitive Note that does not bear and is not required to bear the Restricted Notes Legend.
Unrestricted Global Note means a permanent Global Note, substantially in the form of Exhibit A that bears the Global Notes Legend and that has the Schedule of Increases or Decreases in Global Note attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Restricted Notes Legend.
Unrestricted Subsidiary means:
(a) any Subsidiary of the Company that is designated after the Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to Section 4.10 and is not thereafter redesignated as a Restricted Subsidiary as permitted pursuant thereto; and
(b) any Subsidiary of an Unrestricted Subsidiary.
U.S. Government Obligations means direct non-callable obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
U.S. Person means a U.S. person as defined in Rule 902(k) under the Securities Act.
Voting Stock of any Person means all classes of Equity Interests or other interests (including partnership interests) of that Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
Wholly Owned Restricted Subsidiary means, at any time, a Restricted Subsidiary all the Voting Stock of which (except directors qualifying shares) is at that time owned, directly or indirectly, by the Company and its other Wholly Owned Subsidiaries.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions .
Term |
Defined in Section | |
Affiliate Transaction |
4.09 | |
Change of Control Offer |
4.12(a) | |
Change of Control Payment Date |
4.12(b)(B) | |
Change of Control Purchase Price |
4.12(a) | |
covenant defeasance option |
8.01(b) | |
Events of Default |
6.01 | |
Excess Proceeds |
4.07(c) | |
Guaranteed Obligations |
10.01(a) | |
LCA Election |
1.05 | |
LCA Test Date |
1.05 | |
legal defeasance option |
8.01(b) | |
Notes Register |
2.04 | |
Offer Amount |
4.07(d)(2) | |
Offer Period |
4.07(d)(2) | |
Paying Agent |
2.04 | |
Permitted Debt |
4.04 | |
Prepayment Offer |
4.07(c) | |
Registrar |
2.04 | |
Successor Company |
5.01(a) | |
Successor Person |
5.01 | |
Suspended Covenants |
4.01 | |
Suspension Period |
4.01 |
-26-
SECTION 1.03. [Reserved] .
SECTION 1.04. Rules of Construction . Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) or is not exclusive;
(4) including means including without limitation;
(5) words in the singular include the plural and words in the plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer thereof dated such date prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater of (i) the maximum liquidation value of such Preferred Stock and (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock.
SECTION 1.05. Limited Condition Acquisitions (1) . Notwithstanding anything in this Indenture to the contrary, when calculating any applicable ratio or determining other compliance with this Indenture (including the determination of compliance with any provision of this Indenture which requires that no Default or Event of Default has occurred and is continuing or would result therefrom) in connection with a transaction undertaken in connection with the consummation of a Limited Condition Acquisition, the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, may, at the option of the Company (the Companys election to exercise such option in connection with any Limited Condition Acquisition, an LCA Election), be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the LCA Test Date) and if, after such ratios and other provisions are measured on a Pro Forma Basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any Incurrence of Debt and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive fiscal quarter period for which internal financial statements are available at such time ending prior to the LCA Test Date, the Company or the applicable Restricted Subsidiary could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such ratios and provisions shall be deemed to have been complied with. For the avoidance of doubt, (x) if any of such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA of the Company) at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related specified transactions. If the Company has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or basket availability with respect to any other transaction on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation
-27-
of such Limited Condition Acquisition, any such ratio or basket shall be calculated (1) on a Pro Forma Basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any Incurrence of Debt and the use of proceeds thereof) have been consummated and (2) on a Pro Forma Basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any Incurrence of Debt and use of proceeds thereof).
ARTICLE II
The Notes
SECTION 2.01. Amount of Notes . The aggregate principal amount of Notes (other than Notes issued pursuant to Section 2.07) which may be authenticated and delivered under this Indenture on the Issue Date is $833,000,000.
The Company may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.04 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture.
With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.14, 3.08, 4.06(c) or 9.04), there shall be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;
(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue; and
(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.07 in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof.
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.
The Initial Notes and any Additional Notes shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.
SECTION 2.02. Form and Dating . Provisions relating to the Initial Notes are set forth in Section 2.07. The (i) Initial Notes and the Trustees certificate of authentication and (ii) any Additional Notes and the Trustees certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof.
-28-
SECTION 2.03. Execution and Authentication . The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by one Officer of the Company (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $833,000,000 and (b) subject to the terms of this Indenture, Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, the registered Holder of each of the Notes and delivery instructions. For the avoidance of doubt, the Company will be required to deliver an Opinion of Counsel with respect to the authentication of the Initial Notes. Notwithstanding anything to the contrary in this Indenture, any issuance of Additional Notes shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.
One Officer of the Company shall sign the Notes for the Company by manual or facsimile signature. The Companys seal may be (but shall not be required to be) impressed, affixed, imprinted or reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a written order of the Company in the form of an Officers Certificate for the authentication and delivery of such Notes, and the Trustee in accordance with such written order of the Company shall authenticate and deliver such Notes.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee may appoint an Authentication Agent reasonably acceptable to the Company to authenticate the Notes. Unless limited by the terms of such appointment, an Authentication Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An Authentication Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent . The Company initially appoints DTC to act as Depositary with respect to the Global Notes. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar) and an office or agency where Notes may be presented for payment (the Paying Agent). The Registrar shall keep a register (the Notes Register) of the Notes and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term Paying Agent includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.
The Company may remove any Registrar or Paying Agent upon five Business Days prior written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective
-29-
until (i) if applicable, acceptance of an appointment by a successor Registrar or Paying Agent, as the case may be, as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05. Paying Agent To Hold Money in Trust . Prior to each due date of the principal and interest on any Note, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary thereof is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holder or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee in writing of any default by the Company in making any such payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holder. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange .
(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.07, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless, and, if applicable, subject to the limitation on issuance of Definitive Notes set forth in Section 2.07(c)(ii), (i) the Depositary (x) notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Company within 120 days, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes (although Regulation S Global Notes may not be exchanged for Definitive Notes prior to (A) the expiration of the applicable Restricted Period and (B) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B)) or (iii) upon the request of a Holder if there shall have occurred and be continuing an Event of Default with respect to the Notes and the Trustee has received a written request from the Depositary to issue Definitive Notes. Upon the occurrence of any of the events described in clause (i), (ii) or (iii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.14 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.07 or Sections 2.08 or 2.14 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events described in clause (i), (ii) or (iii) above and pursuant to Section 2.07(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.07(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.07(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
-30-
(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided , that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.07(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.07(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided , that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in a Regulation S Global Note prior to (x) the expiration of the applicable Restricted Period therefor and (y) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B). Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.07(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.07(b)(ii) hereof and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; or
(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.07(b)(ii) hereof and the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
-31-
(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this Section 2.07(b)(iv), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act
If any such transfer is effected pursuant to Section 2.07(b)(iv) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (iv) above.
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Restricted Global Note . Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .
(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.07(a) hereof and receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or
-32-
(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and, upon receipt of an authentication order, the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c)(i) (except transfers pursuant to clause (F) above) shall bear the Restricted Notes Legend and shall be subject to all restrictions on transfer contained therein
(ii) Beneficial Interests in Regulation S Global Note to Definitive Notes . Notwithstanding Sections 2.07(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the applicable Restricted Period therefor and (B) the receipt by the Registrar of any certifications of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.06(a) hereof and if the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof, or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof,
and, in each such case set forth in this Section 2.07(c)(iii), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.07(a) hereof and satisfaction of the conditions set forth in Section 2.07(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and the Trustee, upon receipt of an authentication order, shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant
-33-
to this Section 2.07(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv) shall not bear the Restricted Notes Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .
(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
-34-
and, in each such case set forth in this Section 2.07(d)(ii), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the applicable conditions of this Section 2.07(d)(ii), the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes:
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to Section 2.07(d)(ii) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred
(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holders compliance with the provisions of this Section 2.07(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.07(e):
(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or;
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
-35-
(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof,
and, in each such case set forth in this subparagraph (D), if the Company so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) [Intentionally Omitted].
(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:
(i) Restricted Notes Legend .
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR ITS SUBSIDIARIES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
-36-
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.07 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Restricted Notes Legend.
(ii) Global Notes Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
(iii) Regulation S Global Notes Legend . Except as permitted by subparagraph (ii)(B) above, each Global Note and Definitive Note issued in a transaction exempt from registration pursuant to Regulation S shall also bear the legend in substantially the following form:
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.10 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
-37-
(i) General Provisions Relating to Transfers and Exchanges .
(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an authentication order in accordance with Section 2.03 hereof or at the Registrars request.
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.08, 2.14, 3.06, 4.07 and 4.12 hereof).
(iii) Neither the Registrar nor the Company shall be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer or exchange of a Note between a record date and the next succeeding interest payment date or (D) to register the transfer or exchange of any Notes tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or a Prepayment Offer.
(iv) Neither the Registrar nor the Company shall be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; provided , that new Notes will only be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.
(v) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, the Registrar, the Notes Custodian, the Paying Agent and the Company shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, the Notes Custodian, the Paying Agent or the Company shall be affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Company designated in this Indenture, the Company shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.
(viii) At the option of the Holder, subject to Section 2.07(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.03 hereof.
(ix) All certifications, certificates and Opinions of Counsel required to be submitted pursuant to this Section 2.07 to effect a registration of transfer or exchange may be submitted by facsimile.
(x) Neither the Trustee nor the Registrar shall have any duty to monitor the Companys compliance with or have any responsibility with respect to the Companys compliance with any federal or state
-38-
securities laws in connection with registrations of transfers and exchanges of the Notes. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Notes (including any transfers between or among the Depositorys participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation, as is expressly required by, and to do so if and when expressly required by, the terms of this Indenture or the Notes and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(xi) The Company, the Trustee, and the Registrar reserve the right to require the delivery by any Holder or purchaser of a Note of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer of any Restricted Global Note or Restricted Definitive Note is being made in compliance with the Securities Act or the Exchange Act, or rules or regulations adopted by the Commission from time to time thereunder, and applicable state securities laws.
SECTION 2.08. Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that such Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee and/or the Authentication Agent, as applicable. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee (and the Paying Agent, Registrar and Authentication Agent, if not the Trustee) to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.09. Outstanding Notes . Notes outstanding at any time are all Notes authenticated by the Trustee, except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 11.04, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Cancellation . The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of all Notes surrendered for registration of transfer, exchange, payment or cancellation in its customary manner. The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation, except pursuant to the terms of this Indenture. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest . If the Company defaults in a payment of interest on the Notes, the Company shall pay the defaulted interest then borne by the Notes (plus interest on such defaulted interest to the
-39-
extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Holders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly deliver or cause to be delivered to each affected Holder (with a copy to the Trustee) a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP, ISIN or Common Code Numbers . The Company in issuing the Notes may use CUSIP, ISIN or Common Code numbers (if then generally in use) and, if so, the Trustee shall use CUSIP, ISIN or Common Code numbers in notices of redemption as a convenience to Holders; provided , however , that neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP, ISIN or Common Code number that appears on any Note, check, advice of payment or redemption notice, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in such numbers.
SECTION 2.13. Calculation of Principal Amount of Notes . The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 11.07 of this Indenture. Any calculation of the Applicable Premium made pursuant to this Indenture or the Notes shall be made by the Company and delivered to the Trustee pursuant to an Officers Certificate. The Trustee shall have no liability or responsibility for any calculation made hereunder or in connection herewith or for any information used in any such calculation.
SECTION 2.14. Temporary Notes . Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee . If the Company elects to redeem Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee in writing of the redemption date, the principal amount of Notes to be redeemed and that such redemption is being made pursuant to paragraph 5 of the Notes.
The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 5 Business Days before the date of giving the notice of redemption pursuant to Section 3.03, unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.
SECTION 3.02. Selection of Notes To Be Redeemed . In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption shall be made on a pro rata basis (subject to the rules of DTC) unless otherwise required by law or applicable stock exchange requirements; provided , however , that such Notes shall only be redeemable in principal amounts of a minimum of $2,000 or an integral multiple of $1,000 in excess thereof. The Trustee shall make the selection from outstanding Notes not previously called for redemption. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Company promptly of the Notes or portions of Notes to be redeemed.
-40-
SECTION 3.03. Notice of Redemption . Notice of redemption shall be mailed by first-class mail (or electronic transmission in the case of Notes held in book-entry form) to each Holder of Notes to be redeemed at its registered address, at least 30 but not more than 60 days before the redemption date, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or a satisfaction and discharge of the Notes.
Notices of redemption may be subject to the satisfaction of one or more conditions precedent established by the Company in its sole discretion, including completion of an Equity Offering or other corporate transaction.
The notice shall identify the Notes to be redeemed (including any CUSIP, Common Code or ISIN numbers and shall state:
(1) the redemption date;
(2) the redemption price or the information specified in clause (c) of paragraph 5 of the Notes;
(3) the name and address of the applicable Paying Agent;
(4) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed;
(6) subject to clauses (8) and (9) below, that, unless the Company defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(7) that no representation is made as to the correctness or accuracy of the CUSIP, ISIN or Common Code number, if any, listed in such notice or printed on the Notes;
(8) whether such notice is conditional and the timeframe for satisfying such conditions; and
(9) if such redemption is subject to satisfaction of one or more conditions precedent, that, in the Companys discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date or by the redemption date so delayed.
At the Companys written request, the Trustee shall give the notice of redemption in the Companys name and at the Companys expense; provided , however , that the Officers Certificate delivered to the Trustee pursuant to Section 3.01 hereof requests that the Trustee give such notice and sets forth the information to be stated in such notice as required by this Section 3.03.
If the Company elects to provide, in lieu of the redemption price, the information specified in clause (c) of paragraph 5 of the Notes in the notice of redemption, the Trustee shall give the notice of the redemption price, in the Companys name and the Companys expense, one Business Day prior to the redemption date.
SECTION 3.04. Effect of Notice of Redemption . Except as contemplated by Section 3.03, once notice of redemption is mailed, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the applicable Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
-41-
SECTION 3.05. Deposit of Redemption Price . On or prior to 10:00 a.m., New York City time, on the Business Day immediately preceding the anticipated redemption date, the Company shall deposit with the applicable Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money in U.S. Dollars sufficient to pay the redemption price of and accrued interest (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption) on all Notes to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Notes Redeemed in Part . If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon surrender for cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption, unless the Company defaults in the payment of the redemption price.
ARTICLE IV
Covenants
SECTION 4.01. Covenant Suspension . During any period of time that:
(a) the Notes have Investment Grade Ratings from both Rating Agencies, and
(b) no Default or Event of Default has occurred and is continuing under this Indenture,
the Company and the Restricted Subsidiaries will not be subject to the following Sections of this Indenture: Section 4.04, Section 4.05, Section 4.07, Section 4.08, Section 4.09, clause (x) of the third paragraph (and as referred to in the first paragraph) of Section 4.10, Section 4.14 and clause (d) of Section 5.01 (collectively, the Suspended Covenants). In the event that the Company and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the preceding sentence (any such period, a Suspension Period) and, subsequently, one or both of the Rating Agencies downgrades the ratings assigned to the Notes below the required Investment Grade Rating, then the Company and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants for all periods after that downgrade; provided that there will not be deemed to have occurred a Default or Event of Default with respect to any Suspended Covenants during the time that the Company and the Restricted Subsidiaries were not subject to the Suspended Covenants (or after that time based solely on events that occurred during a Suspension Period). Notwithstanding the foregoing, the Company may not designate any of its Restricted Subsidiaries to be Unrestricted Subsidiaries during any Suspension Period.
During any Suspension Period, the amount of Excess Proceeds shall be set at zero.
The Company shall promptly notify the Trustee in an Officers Certificate of the existence, and of the termination, of any Suspension Period. The Trustee shall not have any obligation to monitor the ratings of the Notes or the existence or termination of any Suspension Period and may rely conclusively on such Officers Certificate. The Trustee shall not have any obligation to notify the Holders of the existence or termination of any Suspension Period, but may provide a copy of such Officers Certificate to any Holder of Notes upon request.
SECTION 4.02. Payment of Notes . The Company shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the applicable Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.
-42-
The Company shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the rate borne by the Notes to the extent lawful.
SECTION 4.03. SEC Reports . Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC and provide the Trustee and Holders of Notes with annual reports and information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to those Sections, and the information, documents and reports to be so filed and provided at the times specified for the filing of the information, documents and reports under those Sections ( provided that if the Company is not then subject to the reporting requirements of the Exchange Act, then the time periods for filing applicable to the Company shall be that required of a non-accelerated filer and in any case including any extension as would be permitted by Rule 12b-25 under the Exchange Act); provided , ho w ever , that (x) (i) the Company shall not be so obligated to file the information, documents and reports with the SEC if the SEC does not permit those filings and (ii) the electronic filing with the SEC through the SECs Electronic Data Gathering, Analysis, and Retrieval System (or any successor system providing for free public access to such filings) shall satisfy the Companys obligation to provide such reports, information and documents to the Trustee and the Holders of Notes, it being understood that the Trustee shall have no responsibility to determine whether or not such information has been filed and (y) the Company shall not be required to provide the type of information contemplated by Rule 3-10 of Regulation S-X with respect to separate financial statements for Guarantors or any financial statements for unconsolidated subsidiaries or 50% or less-owned persons contemplated by Rule 3-09 of Regulation S-X, or in each case any successor provisions. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustees receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Companys compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers Certificate).
SECTION 4.04. Limitation on Debt . The Company shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless, after giving effect to the application of the proceeds thereof, no Default or Event of Default would occur as a consequence of the Incurrence or be continuing following the Incurrence and either:
(1) the Debt is Debt of the Company or any Restricted Subsidiary and after giving effect to the Incurrence of the Debt and the application of the proceeds thereof on a Pro Forma Basis, the Consolidated Fixed Charges Coverage Ratio would be greater than 2.00 to 1.00; provided that the aggregate amount of Debt that may be Incurred pursuant to the foregoing by a Restricted Subsidiary that is not a Guarantor, when aggregated with the then outstanding amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) of the following paragraph, shall not at any one time be outstanding in an amount exceeding the greater of (i) $110.0 million and (ii) 5.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time), or
(2) the Debt is Permitted Debt.
Permitted Debt means:
(a) Debt of the Company and the Guarantors evidenced by (i) the Initial Notes and the related Guarantees and (ii) the 2024 Notes and the related guarantees;
(b) Debt of the Company or a Restricted Subsidiary Incurred under any Credit Facilities in an aggregate principal amount outstanding at any time not to exceed $2.0 billion;
(c) Debt of the Company or any Restricted Subsidiary Incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting Purchase Money Debt), including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided that the aggregate principal amount of Debt Incurred in reliance on this clause (c) shall not exceed, when aggregated with
-43-
the amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) below, the greater of (i) $200.0 million and (ii) 10.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time) at any time outstanding;
(d) Debt of the Company owing to and held by any Restricted Subsidiary and Debt of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided , however , that (1) any subsequent issue or transfer of Equity Interests or other event that results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of that Debt (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of that Debt by the issuer thereof, and (2) if the Company or a Guarantor is the obligor on any such Debt owing to a Restricted Subsidiary that is not a Guarantor, the Debt is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes or the related Guarantees, as applicable;
(e) Debt of a Restricted Subsidiary outstanding on the date on which that Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary; provided that Debt of Restricted Subsidiaries that are not Guarantors that is Incurred under this clause (e) may not be Incurred in contemplation of, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, a transaction or series of transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Company or was otherwise acquired by the Company; provided further that at the time that Person was acquired by the Company or otherwise became a Restricted Subsidiary and after giving effect to the Incurrence of that Debt on a Pro Forma Basis, (i) the Company would have been able to Incur $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this Section 4.04 or (ii) the Consolidated Fixed Charges Coverage Ratio would have been greater than such ratio immediately prior to such transaction;
(f) Debt of the Company or a Restricted Subsidiary Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, a transaction or series of transactions pursuant to which a Person became a Restricted Subsidiary of the Company or was otherwise acquired by the Company or a Restricted Subsidiary; provided at the time that Person was acquired by the Company or otherwise became a Restricted Subsidiary and after giving effect to the Incurrence of that Debt, (i) the Company would have been able to Incur $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this covenant or (ii) the Consolidated Fixed Charges Coverage Ratio would have been greater than such ratio immediately prior to such transaction; provided that the aggregate amount of Debt that may be Incurred pursuant to this clause (f) by a Restricted Subsidiary that is not a Guarantor, when aggregated with the then outstanding amount of Permitted Refinancing Debt in respect thereof pursuant to clause (t) below, shall not at any one time be outstanding in an amount exceeding the greater of (i) $110.0 million and (ii) 5.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(g) Debt in respect of Swap Contracts; provided that such Swap Contracts are (or were) entered into in for the purpose of mitigating risks associated with fluctuations in interest rates, foreign exchange rates or commodity prices, and not for purposes of speculation;
(h) Debt in respect of workers compensation claims, property casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations, performance, bid and surety bonds and completion guaranties and similar arrangements, in each case in the ordinary course of business;
(i) to the extent constituting Debt, indemnification and non-compete obligations or adjustments in respect of the purchase price (including earn-outs and other contingent deferred payments) in connection with any acquisition or disposition permitted by this Indenture;
(j) Debt outstanding on the Issue Date not otherwise described in clause (a) or (b) above or clause (l)(y) below;
-44-
(k) Debt of the Company or a Restricted Subsidiary in an aggregate principal amount outstanding at any one time not to exceed the greater of $250.0 million and 10.0% of Consolidated Total Assets (measured as of the last day of the fiscal quarter most recently ended prior to the date of Incurrence thereof for which internal financial statements are available at such time);
(l) Debt of Restricted Subsidiaries that are not Guarantors in an aggregate principal amount outstanding at any one time not to exceed (x) $50.0 million plus (y) in the case of Foreign Subsidiaries organized under the Laws of the Peoples Republic of China, RMB450,000,000;
(m) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Company or any Restricted Subsidiary in the ordinary course of business against insufficient funds, so long as such Debt is promptly repaid;
(n) (x) any guarantee by the Company or a Restricted Subsidiary of Debt or other obligations of any Restricted Subsidiary so long as the Incurrence of such Debt Incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (y) any guarantee by a Restricted Subsidiary of Debt of the Company; provided that such guarantee is Incurred in accordance with Section 4.14;
(o) Debt in connection with any Permitted Receivables Financing;
(p) Debt representing deferred compensation to employees of the Company and its Restricted Subsidiaries Incurred in the ordinary course of business;
(q) Debt Incurred in the ordinary course of business in connection with cash pooling arrangements and cash management incurred in the ordinary course of business in respect of netting services and similar arrangements in each case in connection with cash management and deposit accounts, but only to the extent, with respect to any such arrangements, that the total amount of deposits subject to such arrangements equals or exceeds the total amount of overdrafts or similar obligations subject thereto;
(r) Debt consisting of unpaid insurance premiums owing to insurance companies and insurance brokers Incurred in connection with the financing of insurance premiums in the ordinary course of business;
(s) guarantees of Debt otherwise permitted by this Section 4.04 and of other obligations otherwise permitted under this Indenture; and
(t) Permitted Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause (1) of the first paragraph of this Section 4.04 and clauses (a), (c), (e), (f), (j), (k) and (s) above.
For purposes of determining compliance with any restriction on the Incurrence of Debt in dollars where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination, provided that if any such Debt denominated in a different currency is subject to a Swap Contract (with respect to dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in such foreign currency will be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt Incurred in the same currency as the Debt being Refinanced will be the Dollar Equivalent of the Debt Refinanced determined on the date such Debt being Refinanced was initially Incurred. Notwithstanding any other provision of this Section 4.04, for purposes of determining compliance with this Section 4.04, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that the Company or any Restricted Subsidiary may Incur under any of clauses (a) through (t) of this Section 4.04.
For purposes of determining compliance with this Section 4.04, in the event that an item of Debt meets the criteria of more than one of the types of Debt described above, the Company, in its sole discretion, will classify such item of Debt at the time of Incurrence and only be required to include the amount and type of such Debt in one of the above clauses, and the Company will be entitled to divide and classify and reclassify an item of Debt in more
-45-
than one of the types of Debt described above; provided that (i) Debt may not be reclassified under clause (j) above and (ii) all Debt outstanding under the Senior Secured Credit Facilities on the Issue Date shall be deemed to be outstanding pursuant to clause (b) above.
The accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Debt, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preferences and increases in the amount of Debt outstanding solely as a result of fluctuations in the applicable Dollar Equivalent amount of any Debt will not be deemed to be an Incurrence of Debt for purposes of this Section 4.04. The principal amount of any non-interest bearing Debt or other discount security constituting Debt at any date shall be the principal amount thereof that would be shown on a consolidated balance sheet of the Company dated such date prepared in accordance with GAAP.
SECTION 4.05. Limitation on Restricted Payments . The Company shall not make, and shall not permit any Restricted Subsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, the proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be continuing,
(b) the Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.04, or
(c) the aggregate amount of that Restricted Payment and all other Restricted Payments (other than Restricted Payments during a Suspension Period and Restricted Payments made pursuant to clauses (c) through (m) of the following paragraph) declared or made after the Issue Date (the amount of any Restricted Payment, if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the Available Amount.
Notwithstanding the foregoing limitation, the Company may:
(a) pay dividends on its Equity Interests within 60 days of the declaration thereof if, on said declaration date, the dividends could have been paid in compliance with this Indenture;
(b) purchase, repurchase, redeem, legally defease, acquire or retire for value Equity Interests of the Company or Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Company (other than Disqualified Equity Interests and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any Subsidiary for the benefit of their employees);
(c) purchase, repurchase, redeem, legally defease, acquire or retire for value any Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing Debt;
(d) (i) purchase, repurchase, redeem, legally defease, acquire or retire for value any Disqualified Equity Interests in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing Debt or (ii) pay scheduled dividends (not constituting a return on capital) on Disqualified Equity Interests of the Company issued pursuant to and in compliance with Section 4.04;
(e) permit a Restricted Subsidiary that is not a Wholly Owned Subsidiary to pay dividends to shareholders of that Restricted Subsidiary that are not the parent of that Restricted Subsidiary, so long as the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary receives dividends on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis;
-46-
(f) (i) make cash payments in lieu of fractional shares in connection with the exercise of warrants, options or other securities convertible into Equity Interests of the Company, (ii) purchase fractional shares arising out of stock dividends, stock splits, stock combinations or business combinations or (iii) the repurchase or redemption of rights to purchase Equity Interests of the Company issued in connection with any future shareholder rights plan of the Company;
(g) make repurchases of shares of common stock or other Equity Interests of the Company deemed to occur (A) upon the exercise, conversion or exchange of options, warrants or other rights to purchase Equity Interests of the Company if such Equity Interests of the Company represent a portion of the exercise price thereof, (B) as a result of such shares of common stock or other Equity Interests being utilized to satisfy tax withholding obligations upon (i) the exercise of options, warrants or other rights to purchase Equity Interests of the Company or (ii) the vesting of other Equity Interests of the Company or the withholding taxes applicable to such options, warrants or other rights to purchase Equity Interests of the Company or (C) upon the cancellation of Equity Interests of the Company;
(h) repurchase Equity Interests of the Company from current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (including employment agreements) or plans approved by the Board of Directors under which such individuals acquire such Equity Interests; provided , however , that the aggregate amount of such repurchases shall not exceed the sum of (i) $15.0 million in any calendar year (with unused amounts in any calendar year carried over to succeeding calendar years subject to a maximum of $35.0 million in any calendar year) plus (ii) the net cash proceeds of any key man life insurance policies of the Company or any Restricted Subsidiary that have not been used to make any repurchases under this clause (h);
(i) purchase, defease or otherwise acquire or retire for value any Subordinated Obligations upon a Change of Control of the Company or an Asset Sale by the Company, to the extent required by any agreement pursuant to which such Subordinated Obligations were issued, but only if the Company has previously made the offer to purchase notes required under Section 4.12 or Section 4.07;
(j) make other Restricted Payments in aggregate amount not to exceed the greater of (x) $200.0 million and (y) 9.0% of Consolidated Total Assets (calculated as of the last day of the fiscal quarter most recently ended prior to the time of the applicable Restricted Payment for which internal financial statements are available at such time);
(k) make other Restricted Payments, provided that after giving effect to such Restricted Payment on a Pro Forma Basis the Consolidated Net Leverage Ratio will be less than or equal to 3.75 to 1.00;
(l) make other Restricted Payments using the proceeds of a substantially concurrent offering of Equity Interests (other than Disqualified Equity Interests) of the Company; provided that such proceeds shall not be included in the Available Amount; and
(m) make payments under the Transaction Agreements;
provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clause (j) or (k), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this Section 4.05, a Restricted Payment permitted by this Section 4.05 or a Permitted Investment described in the definition of Permitted Investments need not be permitted solely by reference to one category of permitted Restricted Payments or Permitted Investments described in the definition of Permitted Investments (or any portion thereof) but may be permitted in part under any combination thereof.
-47-
For purposes of this Section 4.05, if any Restricted Payment or Investment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of Permitted Investments, the Company may classify such Restricted Payment or Investment in any manner that complies with this Section 4.05 and may later reclassify any such Restricted Payment or Investment so long as such Restricted Payment or Investment (as so reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.
SECTION 4.06. Limitation on Liens . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens) upon any of its Property (including Equity Interests of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, or any interest therein or any income or profits therefrom, unless it has made or will make effective provision whereby the Notes and the related Guarantees will be secured by that Lien equally and ratably with (or prior to) all other Debt of the Company or any Restricted Subsidiary secured by that Lien for so long as such Lien is outstanding. Any Lien created for the benefit of the Holders of the Notes pursuant to this Section 4.06 shall be automatically and unconditionally released and discharged upon the release and discharge of such other Lien.
For purposes of determining compliance with this Section 4.06, (A) a Lien securing an item of Debt need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06 but may be permitted in part under any combination thereof and (B) if a Lien securing an item of Debt meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06, the Company may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Debt (or any portion thereof) in any manner that complies with this Section 4.06 and will be entitled to only include the amount and type of such Lien or such item of Debt secured by such Lien (or any portion thereof) in one of the categories (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.06.
SECTION 4.07. Limitation on Asset Sales .
(a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(i) the Company or the Restricted Subsidiary receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale; and
(ii) at least 75% of the consideration paid to the Company or the Restricted Subsidiary in connection with such Asset Sale is in the form of cash or Cash Equivalents or the assumption by the purchaser of liabilities of the Company or any Restricted Subsidiary by operation of law or otherwise (other than liabilities that are by their terms subordinated to the Notes) as a result of which the Company and the Restricted Subsidiaries are no longer obligated with respect to those liabilities; provided that, for purposes of this clause (ii), Designated Non-Cash Consideration in an aggregate amount for all such Asset Sales that is at any time outstanding not to exceed the greater of (x) $50.0 million and (y) 2.75% of Consolidated Total Assets at the time of receipt of such Designated Non-Cash Consideration (measured as of the last day of the fiscal quarter most recently ended prior to the date of receipt thereof for which internal financial statements are available) (without giving effect to any write-off or write-down thereof) shall be deemed to be cash and Cash Equivalents.
For the purposes of this Section 4.07:
(1) securities or other assets received by the Company or any Restricted Subsidiary from the transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days shall be considered to be cash to the extent of the cash received in that conversion;
-48-
(2) any cash consideration paid to the Company or the Restricted Subsidiary in connection with the Asset Sale that is held in escrow or on deposit to support indemnification, adjustment of purchase price or similar obligations in respect of such Asset Sale shall be considered to be cash;
(3) Productive Assets received by the Company or any Restricted Subsidiary in connection with the Asset Sale shall be considered to be cash; and
(4) the requirement that at least 75% of the consideration paid to the Company or the Restricted Subsidiary in connection with the Asset Sale be in the form of cash or Cash Equivalents shall also be considered satisfied if the cash received constitutes at least 75% of the consideration received by the Company or the Restricted Subsidiary in connection with such Asset Sale, determined on an after-tax basis.
(b) The Net Available Cash (or any portion thereof) from Asset Sales may be applied by the Company or a Restricted Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or is required by the terms of any Debt):
(i) to repay Debt of the Company under clause (b) of the second paragraph of Section 4.04;
(ii) in the case of any Asset Sale by a Foreign Restricted Subsidiary, to repay any liability of one or more Foreign Restricted Subsidiaries;
(iii) to make capital expenditures or reinvest in Additional Assets (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Company or another Restricted Subsidiary); or
(iv) any combination of the foregoing;
provided that pending the final application of any such Net Available Cash in accordance with clause (a), (b), (c) or (d) above, the Company and its Restricted Subsidiaries may temporarily reduce Debt (including under a revolving Credit Facility) or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture.
(c) Any Net Available Cash from an Asset Sale not applied in accordance with the preceding paragraph within 365 days from the date of the receipt of such Net Available Cash (or in the event that the Company or any Restricted Subsidiary has entered into a binding agreement to acquire Additional Assets within such 365 day period, such period shall be extended for an additional 180 days with respect to the portion of such Net Available Cash so committed to be applied in such acquisition) or that the Company earlier elects to so designate shall constitute Excess Proceeds.
When the aggregate amount of Excess Proceeds not previously subject to a Prepayment Offer exceeds $50.0 million, the Company will be required to make an offer to purchase (the Prepayment Offer) the Notes, which offer shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis according to principal amount, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures (including prorating in the event of oversubscription) set forth in this Indenture. To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all Holders of Notes have been given the opportunity to tender their Notes for purchase in accordance with this Indenture, the Company or such Restricted Subsidiary may use the remaining amount for any purpose permitted by this Indenture and the amount of Excess Proceeds will be reset to zero.
(d) (1) Not later than ten Business Days after the Company is obligated to make a Prepayment Offer as described in the preceding paragraph, the Company shall send a written notice, by first-class mail (or electronic transmission in the case of Notes held in book-entry form), to the Holders of Notes, accompanied by information regarding the Company and its Subsidiaries as the Company in good faith believes will enable the Holders to make an informed decision with respect to that Prepayment Offer. The notice shall state, among other things, the purchase price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date the notice is sent.
-49-
(2) Not later than the date upon which written notice of a Prepayment Offer is delivered to the Holders of Notes as provided above, the Company shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Prepayment Offer (the Offer Amount), (ii) the allocation of the Net Available Cash from the Asset Sales pursuant to which such Prepayment Offer is being made and (iii) the compliance of such allocation with the provisions of clause (c) of this Section 4.07. On or before the purchase date, the Company shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Prepayment Offer remains open (the Offer Period), the Company shall deliver to the Trustee for cancellation the Notes or portions thereof that have been validly tendered and are to be accepted by the Company. The Trustee or the Paying Agent shall, on the purchase date, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Notes delivered by the Company to the Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section 4.07.
(3) At the time the Company delivers Notes to the Trustee that are to be accepted for purchase, the Company shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Note shall be deemed to have been accepted for purchase at the time the Trustee or the applicable Paying Agent mails or delivers payment therefor to the surrendering Holder.
(e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.07. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.07, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.07 by virtue thereof.
SECTION 4.08. Limitation on Restrictions on Distributions from Restricted Subsidiaries . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist any consensual restriction on the right of any Restricted Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Equity Interests, or pay any Debt or other obligation owed, to the Company or any other Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or distributions prior to dividends or distributions being paid on any other Equity Interests shall not be deemed a restriction on the ability to pay dividends or make distributions on Equity Interests),
(b) make any loans or advances to the Company or any other Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Debt Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances), or
(c) transfer any of its Property to the Company or any other Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (a) or (b) above).
The foregoing limitations will not apply:
(1) with respect to clauses (a), (b) and (c), to restrictions:
-50-
(A) in effect on the Issue Date, including pursuant to (x) this Indenture, the Notes and the related Guarantees and (y) the 2024 Notes Indenture, the 2024 Notes and the related guarantees,
(B) relating to Debt of a Restricted Subsidiary and existing at the time it became a Restricted Subsidiary if such restriction was not created in connection with or in anticipation of the transaction or series of transactions pursuant to which that Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company,
(C) resulting from the Refinancing of Debt Incurred pursuant to an agreement referred to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below, provided that restriction is not materially less favorable, taken as a whole, to the Holders of Notes than those under the agreement evidencing the Debt so Refinanced,
(D) resulting from the Incurrence of any Permitted Debt described in clause (b) or (c) of the second paragraph of Section 4.04,
(E) relating to Debt of a Foreign Restricted Subsidiary,
(F) constituting restrictions in connection with a Permitted Receivables Financing,
(G) constituting customary restrictions in joint venture or shareholder agreements relating to any Person that is not a Wholly Owned Restricted Subsidiary,
(H) arising or existing by reason of applicable law or any applicable law, rule, regulation or order, or
(I) that will not, in the good faith judgment of the Company, materially impair the ability of the Company to make all scheduled payments of principal and interest on the Notes as they come due,
(2) with respect to clause (c) only, to restrictions:
(A) relating to Debt that is permitted to be Incurred and secured without also securing the Notes and the related Guarantees pursuant to Section 4.04 and Section 4.06 that limit the right of the debtor to dispose of the Property securing that Debt,
(B) encumbering Property at the time the Property was acquired by the Company or any Restricted Subsidiary, so long as the restriction relates solely to the Property so acquired and was not created in connection with or in anticipation of the acquisition,
(C) resulting from customary provisions restricting subletting or assignment of leases or customary provisions in other agreements (including, without limitation, intellectual property licenses entered into in the ordinary course of business) that restrict assignment of the agreements or rights thereunder, or
(D) which are customary restrictions contained in asset sale agreements limiting the transfer of Property pending the closing of the sale.
SECTION 4.09. Limitation on Transactions with Affiliates . The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into or suffer to exist any transaction or series of transactions (including the purchase, sale, transfer, assignment, lease, conveyance or exchange of any Property or the rendering of any service) with, or for the benefit of, any Affiliate of the Company involving aggregate payments or consideration in excess of $20.0 million (an Affiliate Transaction), unless:
-51-
(a) the terms of such Affiliate Transaction are not materially less favorable to the Company or that Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable arms-length transaction with a Person that is not an Affiliate of the Company, and
(b) if the Affiliate Transaction involves aggregate payments or consideration in excess of $50.0 million, the Board of Directors (including a majority of the disinterested members of the Board of Directors) approves the Affiliate Transaction and, in its good faith judgment, believes that the Affiliate Transaction complies with clause (a) of this paragraph.
Notwithstanding the foregoing limitation, the Company or any Restricted Subsidiary may enter into or suffer to exist the following:
(a) any transaction or series of transactions between the Company and one or more Restricted Subsidiaries or between two or more Restricted Subsidiaries;
(b) any Restricted Payment permitted to be made pursuant to Section 4.05 and any Permitted Investment in any Person that would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise Controls such Person;
(c) employment, compensation (including payment of amounts pursuant to employee benefit plans), indemnification, reimbursement and severance arrangements for officers and directors of the Company or any of the Restricted Subsidiaries so long as they are (i) in the ordinary course of business or (ii) in the case of executive officers and directors, approved by the Board of Directors;
(d) loans and advances to employees made in the ordinary course of business in compliance with applicable laws, provided that those loans and advances do not exceed $10.0 million in the aggregate at any one time outstanding;
(e) any transaction effected as part of a Permitted Receivables Financing;
(f) any transaction pursuant to any agreement in effect on the Issue Date (including, with limitation, the Transaction Agreements) and any modification, amendment, replacement or renewal thereof that is not, in the good faith judgment of the Company, materially adverse to the Holders compared to the terms of the applicable agreement in effect on the Issue Date;
(g) any grant, issuance, sale or transfer of Equity Interests (other than Disqualified Equity Interests) of the Company;
(h) any transaction with a Person that is an Affiliate of the Company solely because such a member of the Board of Directors or the board of directors of a Restricted Subsidiary is also a member of the board of directors of such Person or any direct or indirect parent company of such Person;
(i) any transaction with customers, suppliers, joint ventures, joint venture partners or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture; and
(j) any transaction approved by a majority of the disinterested members of the Board of Directors.
SECTION 4.10. Designation of Restricted and Unrestricted Subsidiaries . The Board of Directors may designate any Subsidiary of the Company to be an Unrestricted Subsidiary if:
(a) the Subsidiary to be so designated does not own any Equity Interests or Debt of, or own or hold any Lien on any Property of, the Company or any other Restricted Subsidiary, and
-52-
(b) any of the following:
(1) the Subsidiary to be so designated has total assets of $1,000 or less, or
(2) if the Subsidiary has consolidated assets greater than $1,000, then the designation would be permitted under Section 4.05.
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company will be classified as a Restricted Subsidiary; provided , however , that the Subsidiary shall not be designated a Restricted Subsidiary and shall be automatically classified as an Unrestricted Subsidiary if the requirements set forth in the second immediately following paragraph will not be satisfied after giving pro forma effect to the classification or if the Person is a Subsidiary of an Unrestricted Subsidiary.
Except as provided in the first sentence of the preceding paragraph, no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. In addition, neither the Company nor any Restricted Subsidiary shall at any time be directly or indirectly liable for any Debt that provides that the holder thereof may (with the passage of time or notice or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its Stated Maturity upon the occurrence of a default with respect to any Debt, Lien or other obligation of any Unrestricted Subsidiary in existence and classified as an Unrestricted Subsidiary at the time the Company or the Restricted Subsidiary is liable for that Debt (including any right to take enforcement action against that Unrestricted Subsidiary).
The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if, immediately after giving pro forma effect to the designation,
(x) the Company could Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.04, and
(y) no Default or Event of Default shall have occurred and be continuing or would result therefrom.
Any designation or redesignation of this kind by the Board of Directors will be evidenced to the Trustee by filing with the Trustee an Officers Certificate that certifies that the designation or redesignation complies with the foregoing provisions.
SECTION 4.11. [Reserved] .
SECTION 4.12. Change of Control .
(a) Upon the occurrence of a Change of Control, unless the Company has exercised its right to redeem the Notes in full, the Company shall be required to make an offer to repurchase all of the Notes pursuant to the offer described below (the Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101.0% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
(b) Within 30 days following any Change of Control or, at the Companys option, prior to the consummation of a Change of Control but after it is publicly announced, the Company shall send, by first-class mail (or electronic transmission in the case of Notes held in book-entry form), with a copy to the Trustee, to each Holder of Notes, at such Holders address appearing in the Notes Register, a notice stating:
(A) that a Change of Control Offer is being made pursuant to this Section 4.12 and that all Notes timely tendered will be accepted for payment;
-53-
(B) the Change of Control Purchase Price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date such notice is sent (the Change of Control Payment Date);
(C) the circumstances and relevant facts regarding the Change of Control; and
(D) the procedures that Holders of Notes must follow in order to tender their Notes (or portions thereof) for payment and the procedures that Holders of Notes must follow in order to withdraw an election to tender Notes (or portions thereof) for payment.
(c) Holders electing to have a Note purchased shall be required to surrender the Note (for Notes held in book-entry form, in accordance with DTCs applicable procedures), with an appropriate form duly completed, to the Company or its agent at the address specified in the notice at least three Business Days prior to the Change of Control Payment Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than two Business Days prior to the Change of Control Payment Date a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note that was delivered for purchase by the Holder and a statement that such Holder is withdrawing its election to have such Note purchased (for Notes held in book-entry form, in accordance with DTCs applicable procedures).
(d) Prior to the Change of Control Payment Date, the Company shall irrevocably deposit with either the Trustee or with the Paying Agent (or, if the Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent, segregate and hold in trust) in cash an amount equal to the Change of Control Purchase Price payable to the Holders entitled thereto, to be held for payment in accordance with the provisions of this Section 4.12. On the Change of Control Payment Date, the Company shall deliver to the Trustee the Notes or portions thereof that have been properly tendered to and are to be accepted by the Company for payment. The Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail or deliver payment to each tendering Holder of the Change of Control Purchase Price. In the event that the aggregate Change of Control Purchase Price is less than the amount delivered by the Company to the Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may be, shall deliver the excess to the Company immediately after the Change of Control Payment Date.
(e) The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(f) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to this Section 4.12. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.12, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.12 by virtue thereof.
(g) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not validly withdraw such Notes in a Change of Control Offer and the Company, or any third party making a Change of Control Offer in lieu of the Company as described above, purchases all of the Notes validly tendered and not validly withdrawn by such Holders, the Company or such third party will have the right, upon not less than 30 days nor more than 60 days prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all the Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the purchase date in accordance with the provisions of Article III.
SECTION 4.13. [Reserved] .
SECTION 4.14. Limitation on Guarantees of Debt by Restricted Subsidiaries . The Company shall not permit any Restricted Subsidiary that is a Wholly Owned Restricted Subsidiary (or a Restricted Subsidiary that is a non-Wholly Owned Subsidiary if such Subsidiary guarantees other capital markets debt securities of the Company
-54-
or a Guarantor), other than a Guarantor, a Foreign Restricted Subsidiary or a Receivables Financing SPC, to guarantee the payment of any Debt of the Company or any other Guarantor in excess of $50.0 million unless such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture substantially in the form of Exhibit D hereto providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Debt of the Company or any Guarantor:
(a) if the Notes or such Guarantors Guarantee are subordinated in right of payment to such Debt, the Guarantee under the supplemental indenture shall be subordinated to such Restricted Subsidiarys guarantee with respect to such Debt substantially to the same extent as the Notes are subordinated to such Debt; and
(b) if such Debt is by its express terms subordinated in right of payment to the Notes or such Guarantors Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Debt shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Debt is subordinated to the Notes or such Guarantors Guarantee;
provided that this Section 4.14 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets . The Company shall not merge, consolidate or amalgamate with or into (other than a merger of a Wholly Owned Restricted Subsidiary into the Company), or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its Property in any one transaction or series of transactions to, any Person unless:
(a) the Company shall be the surviving Person or the Person formed by that merger, consolidation or amalgamation or to which that sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia (such Person, as the case may be, being herein called the Successor Company);
(b) the Successor Company (if other than the Company) expressly assumes, by supplemental indenture in form satisfactory to the Trustee, executed and delivered to the Trustee by that Successor Company, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed by the Company;
(c) immediately after giving effect to such transaction or series of transactions on a pro forma basis, no Default or Event of Default shall have occurred and be continuing;
(d) immediately after giving effect to that transaction or series of transactions on a pro forma basis, (i) the Company or the Successor Person, as the case may be, would be able to Incur at least $1.00 of additional Debt under clause (1) of the first paragraph of Section 4.04, or (ii) the Consolidated Fixed Charges Coverage Ratio would be no worse than such ratio immediately prior to such transaction, provided , however , that this clause (d) shall not be applicable to (A) the Company merging, consolidating or amalgamating with or into an Affiliate incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Debt of the Company and the Restricted Subsidiaries is not increased thereby or (B) any Restricted Subsidiary merging, consolidating or amalgamating with or into or transferring all or substantially all its Property to the Company so long as no Equity Interests of such Restricted Subsidiary are distributed to any Person other than the Company; and
-55-
(e) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each stating that the transaction and the supplemental indenture, if any, in respect thereto comply with this Section and that all conditions precedent herein provided for relating to the transaction and the execution and delivery of a supplemental indenture, as applicable, have been satisfied.
The Successor Person shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture, but the predecessor Company in the case of:
(a) a sale, transfer, assignment, conveyance or other disposition (unless that sale, transfer, assignment, conveyance or other disposition is of all or substantially all the assets of the Company as an entirety or virtually as an entirety), or
(b) a lease,
in each case, shall not be released from any obligation to pay the principal of, premium, if any, and interest on, the Notes.
Subject to Section 10.02(b) governing release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor shall, and the Company shall not permit any such Guarantor to, consolidate or merge with or into or wind up into (whether or not the Company or such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) (a) such Guarantor is the surviving Person or the Person formed by that merger, consolidation or amalgamation or to which that sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia (such Guarantor or such Person, as the case may be, being herein called the Successor Person);
(b) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantors related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(c) immediately after giving effect to such transaction or series of transactions on a Pro Forma Basis, no Default or Event of Default shall have occurred and be continuing; and
(d) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each stating that the transaction and the supplemental indenture, if any, in respect thereto comply with this Section 5.01 and that all conditions precedent herein provided for relating to the transaction have been satisfied; or
(2) the transaction does not violate Section 4.07 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance herewith at such time).
In the case of clause (1) above, the Successor Person will succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantors Guarantee and, except in the case of (x) a sale, transfer, assignment, conveyance or other disposition (unless that sale, transfer, assignment, conveyance or other disposition is of all the assets of such Guarantor as an entirety or virtually as an entirety) or (y) a lease, such Guarantor shall automatically be released and discharged from its obligations under this Indenture and such Guarantors Guarantee. Notwithstanding the foregoing, any Guarantor may merge into or transfer all or part of its properties and assets to another Guarantor or the Company.
-56-
For the avoidance of doubt, nothing in this Indenture shall prohibit the consummation of the Transactions.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default . The following events shall be Events of Default:
(1) the Company defaults in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of, or premium, if any, on any Note when the same becomes due and payable at its Stated Maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise;
(3) the Company fails to comply with Article V;
(4) the Company fails to comply with any other covenant or agreement in the Notes or in this Indenture (other than a failure that is the subject of the foregoing clause (1), (2) or (3)) and such failure continues for 60 days (other than with respect to Section 4.03, which failure continues for 120 days) after written notice is given to the Company as specified below;
(5) a default under any Debt by the Company or any Restricted Subsidiary that results in acceleration of the maturity of that Debt, or failure to pay any Debt at maturity, in either case giving effect to any applicable grace period, in an aggregate amount greater than $100.0 million or its foreign currency equivalent at the time;
(6) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an involuntary case;
(C) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any Significant Subsidiary; or
(D) grants any similar relief under any foreign laws; and in each such case the order or decree remains unstayed and in effect for 30 days;
-57-
(8) any judgment or judgments for the payment of money in an aggregate amount in excess of $100.0 million (or its foreign currency equivalent at the time), net of any amounts covered by insurance, that shall be rendered against the Company or any Restricted Subsidiary and that shall not be waived, satisfied or discharged for any period of 60 consecutive days after such judgment or judgments have become final; or
(9) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible Officer of any Guarantor that is a Significant Subsidiary, as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture.
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
A Default under clause (4) is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding notify the Company (and in the case of such notice by Holders, the Trustee) of the Default and the Company does not cure that Default within the time specified after receipt of such notice. The notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default.
The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers Certificate of any Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration . If an Event of Default with respect to the Notes (other than an Event of Default specified in Section 6.01(6) or (7) with respect to the Company) shall have occurred and be continuing, the Trustee or the registered Holders of not less than 25% in aggregate principal amount of Notes then outstanding may, by notice to the Company and the Trustee, declare to be immediately due and payable the principal amount of all the applicable Notes then outstanding, plus accrued but unpaid interest to, but excluding, the date of acceleration. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(6) or (7) with respect to the Company occurs, the principal of and accrued and unpaid interest on all the Notes shall be due and payable immediately without any declaration or other act by the Trustee or the Holder of the Notes. After any such acceleration but before a judgment or decree based on acceleration is obtained by the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Notes by notice to the Trustee and the Company may rescind any declaration of acceleration if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal, premium, or interest that has become due solely because of the acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults . The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may waive an existing Default and its consequences except (i) a Default in the payment of the principal of or interest on a Note or (ii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
-58-
SECTION 6.05. Control by Majority . The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Notes. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Subject to Section 7.01, in case an Event of Default shall occur and be continuing, the Trustee shall be under no obligation to exercise any of its rights or powers hereunder at the request or direction of any of the Holders, unless the Holders shall have offered to the Trustee indemnity satisfactory to it against loss, liability or expense.
SECTION 6.06. Limitation on Suits . A Holder may not pursue any remedy with respect to this Indenture or the Notes unless:
(1) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made a written request, and such Holder or Holders shall have offered security or indemnity, to the Trustee satisfactory to it against loss, liability or expense to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has not received from the Holders of at least a majority in aggregate principal amount of the Notes outstanding a direction inconsistent with such request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a Holder shall not apply to a suit instituted by a Holder of Notes for the enforcement of payment of the principal of, premium, if any, or interest on such Note on or after the applicable due date specified in such Note. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).
SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the contractual right of any Holder to institute suit for the enforcement of any payment on or with respect to such Holders Notes expressly set forth in this Indenture or the Notes shall not be waived without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in this Indenture.
SECTION 6.09. Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for such compensation as agreed upon in writing by the parties hereto, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under this Indenture, or in connection with the transactions contemplated hereunder. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under this Indenture out of the estate, in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.
-59-
SECTION 6.10. Priorities . If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:
FIRST: to the Trustee, including its agents and counsel, for amounts due under this Indenture;
SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amount for any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Company shall mail to each Holders and the Trustee a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Notes then outstanding.
SECTION 6.12. Waiver of Stay or Extension Laws . Neither the Company nor any Guarantor (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and the Guarantors (to the extent that they may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee .
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Persons own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties, covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein.
-60-
(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms of this Indenture.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01, and the provisions of this Article VII shall apply to the Trustee in its role as Registrar, Paying Agent and Notes Custodian.
SECTION 7.02. Rights of Trustee .
(a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. The Trustee may, however, in its discretion make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it shall be entitled to receive an Officers Certificate and an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) Subject to Section 7.01(c), the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty unless so specified herein.
-61-
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by the Trustee in compliance with such request or direction.
(h) The Trustee may employ or retain accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties hereunder and shall not be responsible for any misconduct on the part of any of them.
(i) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless (i) a Trust Officer has actual knowledge thereof or (ii) written notice of any event which is in fact such a Default is received by the Trustee from the Company, any Guarantor or any Holder of at least 25% in aggregate principal amount of the Notes then outstanding (in accordance with the notice provisions of this Indenture) and such notice references the Notes and this Indenture.
(k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(l) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(m) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
(n) Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Notes.
The provisions of this Section 7.02 shall survive satisfaction and discharge or the termination, for any reason, of this Indenture and the resignation and/or removal of the Trustee.
SECTION 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity, priority or adequacy of this Indenture, the Notes or the Guarantees, it shall not be accountable for the Companys use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company or any Guarantor in this Indenture or in any other document issued in connection with the sale of the Notes or in the Notes other than the certificate of authentication executed by the Trustee.
SECTION 7.05. Notice of Defaults . If a Default or Event of Default occurs and is continuing and if the Trustee has notice of such (as set forth in Section 7.02(j)), the Trustee shall mail (or with respect to Notes held in book-entry form, to the extent permitted or required by applicable procedures and regulations of the Depositary, send electronically) to each Holder notice of the Default or Event of Default within 90 days after the Trustee has notice of such (as set forth in Section 7.02(j)). Except in the case of a Default or Event of Default in payment of principal of or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of Holders.
SECTION 7.06. [Reserved] .
-62-
SECTION 7.07. Compensation and Indemnity . The Company shall pay to the Trustee from time to time such compensation for its services as agreed upon in writing by the parties hereto. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees agents, counsel, accountants and experts. The Company and the Guarantors, jointly and severally, shall indemnify, defend, protect and hold harmless the Trustee (in its individual capacity and Trustee capacities) from and against any and all loss, liability, damages, cost or expense (including reasonable attorneys fees) incurred by it in connection with the acceptance or performance of its duties hereunder and/or the transactions contemplated under this Indenture and the Trustee shall have no liability or responsibility for any action or inaction on the part of any Paying Agent, Registrar, Authentication Agent or any successor trustee. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or any Guarantor of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company and the Guarantors shall pay the reasonable fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustees own willful misconduct or gross negligence as finally adjudicated by a court of competent jurisdiction. The Company need not pay for any settlement made by the Trustee without the Companys consent, such consent not to be unreasonably withheld. All indemnifications and releases from liability granted hereunder to the Trustee shall extend to its officers, directors, employees, agents, successors and assigns.
To secure the Companys and the Guarantors payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Companys and the Guarantors payment obligations pursuant to this Section 7.07 shall survive the resignation or removal of the Trustee and the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(6) or (7) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee . The Trustee may resign at any time by so notifying the Company in writing at least 30 days in advance of such resignation and be discharged upon such resignation from the trust created hereby by so notifying the Company. The Holders of a majority in aggregate principal amount of the Notes then outstanding may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee. No resignation or removal shall be effective until a successor Trustee has been appointed and has accepted its appointment. The Company may, upon five Business Days notice, remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a majority in aggregate principal amount of the Notes then outstanding and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail, or otherwise deliver in accordance with the procedures of the Depositary in the case of Notes held in book-entry form, a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
-63-
If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, at the expense of the Company, or the Holders of 10% in aggregate principal amount of the Notes then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder who has been a bona fide Holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement or resignation of the Trustee pursuant to this Section 7.08, the Companys obligations under Section 7.07 shall continue for the benefit of the Trustee and survive the termination of this Indenture.
SECTION 7.09. Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any such successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification . The Trustee shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $50,000,000 as set forth in its (or its related bank holding companys) most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, as amended, subject to the penultimate paragraph thereof.
SECTION 7.11. Preferential Collection of Claims Against Company . The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance .
(a) This Indenture shall be discharged and shall cease to be of further effect as to all Notes and the related Guarantees, when either:
(1) all Notes theretofore authenticated and delivered, except mutilated, lost or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption and redeemed within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense,
-64-
of the Company, and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders cash in U.S. dollars, U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized accounting firm (in the case of U.S. Government Securities), without consideration of any reinvestment of interest, to pay and discharge the entire Debt on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to, but excluding, the date of maturity or redemption;
(B) the Company has paid or caused to be paid all sums payable by it under this Indenture; and
(C) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.
In addition, the Company shall deliver an Officers Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of its and the Guarantors obligations under the Notes, the related Guarantees and this Indenture (legal defeasance option) or (ii) its obligations and those of the Guarantors under Sections 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.12 and 4.14 and the operation of Sections 6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of Sections 6.01(6) and (7), with respect only to Significant Subsidiaries) and the limitations contained in clause (d) of Section 5.01 (covenant defeasance option). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Sections 6.01(4) (with respect to the covenants of Article IV identified in the immediately preceding paragraph), 6.01(5), 6.01(6), 6.01(7) or 6.01(8) (with respect only to Significant Subsidiaries in the case of Sections 6.01(6) and 6.01(7)) or because of the failure of the Company to comply with the limitations contained in clause (d) of Section 5.01. If the Company exercises its legal defeasance option or its covenant defeasance option, each Guarantor shall be released from all of its obligations with respect to its Guarantee.
Upon satisfaction of the conditions set forth herein and upon request of the Company, accompanied by an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent specified herein relating to the defeasance contemplated have been complied with, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Companys obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full. Thereafter, the Companys obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive such satisfaction or discharge.
SECTION 8.02. Conditions to Defeasance . The Company may exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money in U.S. Dollars or U.S. Government Obligations for the payment of principal of and interest (including premium, if any) on the Notes to maturity or redemption;
(2) the Company delivers to the Trustee a certificate from a nationally recognized accounting firm expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest (including premium, if any) when due on all the Notes to maturity or redemption, as the case may be;
-65-
(3) 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 6.01(6) or (7) occurs with respect to the Company or any other Person making the deposit that is continuing at the end of the period;
(4) no Default or Event of Default has occurred and is continuing on the date of the deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other material agreement or instrument binding on the Company or any Guarantor;
(6) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance of the Notes as contemplated by this Article VIII have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article III.
SECTION 8.03. Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes.
SECTION 8.04. Repayment to Company . The Trustee and the Paying Agent shall promptly turn over to the Company upon written request any excess money or U.S. Government Obligations held by them upon satisfaction of the conditions and occurrence of the events set forth in this Article VIII.
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.
SECTION 8.05. Indemnity for U.S. Government Obligations . The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement . If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Companys obligations under this Indenture and the Notes shall be revived and reinstated as though no
-66-
deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Company has made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders . The Company, the Guarantors (except that no existing Guarantor will be required to execute any amendment that solely relates to changes described in clause (5) below)) and the Trustee may amend this Indenture, the Notes and/or the related Guarantees without notice to or consent of any Holder to:
(1) cure any ambiguity, omission, defect or inconsistency, as evidenced in an Officers Certificate;
(2) provide for the assumption by a successor entity of the obligations of the Company or any Guarantor under this Indenture;
(3) provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;
(4) comply with the rules of any applicable depositary;
(5) add a Guarantor with respect to the Notes;
(6) secure the Notes, to add to the covenants of the Company and the Guarantors for the benefit of the Holders or to surrender any right or power herein conferred upon the Company or any Guarantor;
(7) make any change that does not adversely affect the rights of any Holder of the Notes in any material respect;
(8) comply with any requirements of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA;
(9) provide for the issuance of Additional Notes in accordance with this Indenture
(10) evidence and provide for the acceptance of an appointment under this Indenture of a successor trustee; or
(11) conform the text of this Indenture, the Notes or the related Guarantees to any provision of the Description of Notes section of the Offering Circular to the extent that such provision in the Description of Notes section of the Offering Circular was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the related Guarantees as set forth in an Officers Certificate.
After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders . The Company, the Guarantors and the Trustee may amend this Indenture, the Notes or the related Guarantees without notice to any Holder but with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes). However, without the consent of each Holder affected thereby, an amendment may not:
-67-
(1) reduce the amount of Notes whose Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of any Note;
(4) make any Note payable in money other than U.S. dollars;
(5) amend the contractual right expressly set forth in this Indenture or the Notes of any Holder to institute suit for the enforcement of any payment on or with respect to that Holders Notes;
(6) subordinate the Notes to any other obligation of the Company
(7) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary in any manner materially adverse to the Holders;
(8) reduce the premium payable upon the redemption of any Note or change the date on which any Note may be redeemed in accordance with Article III;
(9) reduce the premium payable upon a Change of Control or, at any time after a Change of Control has occurred, change the time by which the Change of Control Offer relating thereto must be made or at which the Notes must be repurchased pursuant to that Change of Control Offer;
(10) at any time after the Company is obligated to make a Prepayment Offer with the Excess Proceeds from Asset Sales, change the time by which the Prepayment Offer must be made or at which the Notes must be repurchased pursaunt thereto; or
(11) make any change in the amendment provisions hereof that require each Holders consent or in the waiver provisions hereof.
After an amendment under this Section 9.02 becomes effective, the Company shall promptly mail (or send by electronic transmission in the case of Notes held in book-entry form) to Holders (with a copy to the Trustee) a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
SECTION 9.03. [Reserved] .
SECTION 9.04. Revocation and Effect of Consents and Waivers . A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holders Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holders Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Company or the Trustee of consents by the Holders of the requisite principal amount of Notes, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Company, the Guarantors (as applicable) and the Trustee.
-68-
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Notes . If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver such Note to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return such Note to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments . The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall receive indemnity satisfactory to it and shall receive, and (subject to Section 7.01) shall be fully protected in conclusively relying upon, an Officers Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and is the legal, valid and binding obligation of the Company and the Guarantors, as applicable, enforceable in accordance with its terms.
SECTION 9.07. Additional Voting Terms; Calculation of Principal Amount . All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.
ARTICLE X
Guarantee
SECTION 10.01. Guarantee of Notes .
(a) Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior basis, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Company under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Company under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations). The Guaranteed Obligations of all Guarantors shall be unsecured. Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Guarantor, and that each Guarantor shall remain bound under this Article X notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or each Guarantor;
-69-
(v) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of each Guarantor, except as provided in Section 10.02(b). Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantors obligations would be less than the full amount claimed.
(c) Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Companys or such Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against such Guarantor.
(d) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.
(e) The Guarantee of each Guarantor is, to the extent and in the manner set forth in this Article X, equal in right of payment to all existing and future Pari Passu Debt and senior in right of payment to all existing and future Subordinated Obligations of such Guarantor.
(f) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.05, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
(g) Each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.
(h) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Company to the Holders and the Trustee.
(i) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purposes of this Section 10.01.
-70-
(j) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.
(k) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 10.02. Limitation on Liability .
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Guarantor without rendering the Guarantee or this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.
(b) A Guarantee as to any Restricted Subsidiary that is (or becomes) a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.14 and provides a guarantee of the Notes shall terminate and be of no further force or effect and such Guarantee shall be deemed to be automatically released from all obligations under this Article X upon any of the following:
(1) any sale, exchange or transfer (by merger, consolidation or otherwise) of the Equity Interests of such Guarantor (including any sale, exchange or transfer), after which the applicable Guarantor is no longer a Restricted Subsidiary;
(2) the release or discharge of the guarantee by such Guarantor of the Senior Secured Credit Facilities or the guarantee of any other Debt that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee;
(3) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary;
(4) if the Company exercises its legal defeasance option or its covenant defeasance option under Article VIII or if the Companys obligations under this Indenture are satisfied discharged in accordance with Article VIII; or
(5) with the consent of the Holders in accordance with Section 9.02.
The Company shall notify the Trustee and the Holders of any Guarantor that is released from its Guarantee. Upon delivery to the Trustee of an Officers Certificate and an Opinion of Counsel to the effect that all conditions precedent to release set forth in this Indenture have been satisfied, the Trustee shall execute and deliver an appropriate instrument confirming the release of any such Guarantor upon the Companys request.
Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantors pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 10.03. Successors and Assigns . This Article X shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
-71-
SECTION 10.04. No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article X shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article X at law, in equity, by statute or otherwise.
SECTION 10.05. Modification . No modification, amendment or waiver of any provision of this Article X, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle any Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors . Each Subsidiary of the Company which is required to become a Guarantor of the Notes pursuant to Section 4.14 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto pursuant to which such Subsidiary shall become a Guarantor under this Article X and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate stating that such supplemental indenture is authorized or permitted by this Indenture.
SECTION 10.07. Non-Impairment . The failure to endorse a Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE XI
Miscellaneous
SECTION 11.01. Reserved .
SECTION 11.02. Notices . Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:
if to the Company or a Guarantor:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
if to the Trustee:
Wells Fargo Bank, National Association
10 S. Wacker Dr.
13 th Floor
MAC N8405-130
Chicago, Illinois 60606
Facsimile: (312) 726-2158
Attention of: Corporate, Municipal & Escrow Services
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
-72-
Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders . Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signer, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been fully complied with.
SECTION 11.06. Annual Officer s Certificate as to Compliance . Not later than ninety days after each fiscal year end, beginning with the fiscal year ending May 28, 2017, the Company shall deliver to the Trustee a certificate (which need not comply with Section 11.05 of this Indenture) executed by the principal executive officer, principal financial officer or principal accounting officer of the Company as to such officers knowledge of the Companys compliance with all conditions and covenants under this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture.
SECTION 11.07. When Notes Disregarded . In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, the Guarantors or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or the Guarantors shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
-73-
SECTION 11.08. Rules by Trustee, Paying Agents and Registrar . The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agents or co-registrar may make reasonable rules for their functions.
SECTION 11.09. Legal Holidays . If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 11.10. Governing Law; Jury Trial Waiver . THIS INDENTURE, THE NOTES AND THE RELATED GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE COMPANY, THE GUARANTORS, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE RELATED GUARANTEES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 11.11. No Recourse Against Others . A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Notes, any Guarantee or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes.
SECTION 11.12. Successors . All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.13. Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. Delivery of an executed signature page by facsimile or other electronic transmission (e.g., pdf or tif) shall be effective as delivery of a manually executed counterpart hereof.
SECTION 11.14. Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 11.15. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
SECTION 11.16. U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information within the Companys custody or control or as the Company may reasonably obtain that the Trustee may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
[ Remainder of page intentionally left blank .]
-74-
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
LAMB WESTON HOLDINGS, INC. | ||
By: | /s/ John F. Gehring | |
Name: John F. Gehring | ||
Title: Senior Vice President and Interim Chief Financial Officer | ||
CONAGRA FOODS LAMB WESTON, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary | ||
LAMB WESTON SALES, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary | ||
LAMB-WESTON/MIDWEST, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: Eryk J. Spytek | ||
Title: Vice President and Secretary |
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee | ||
By: | /s/ Gregory S. Clarke | |
Name: Gregory S. Clarke | ||
Title: Vice President |
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR ITS SUBSIDIARIES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.
A-1
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
[Definitive Notes Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
[Temporary Regulation S Legend]
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
A-2
[FORM OF FACE OF INITIAL NOTE]
LAMB WESTON HOLDINGS, INC.
No. [ ] | $ |
4.875% Senior Notes due 2026
[144A CUSIP No. 513272 AB0]
[144A ISIN No. US513272AB00]
[REG S CUSIP No. U5256P AB7]
[REG S ISIN No. USU5256PAB77]
LAMB WESTON HOLDINGS, INC., a Delaware corporation, promises to pay to [ ], or registered assigns, the principal sum of [ ] Dollars ($ ) [or such greater or lesser amount as may be indicated on the attached Schedule of Increases or Decreases in Global Note] on November 1, 2026.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Note are set forth on the other side of this Note.
A-1-3
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
LAMB WESTON HOLDINGS, INC. | ||
By: |
|
|
Name: | ||
Title: |
TRUSTEES CERTIFICATE OF
AUTHENTICATION
Dated: |
|
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee, certifies that this is
one of the Notes referred to in
the Indenture.
By: |
|
|
Authorized Signatory |
A-1-4
[FORM OF REVERSE SIDE OF NOTE]
4.875% Senior Notes due 2026
1. | Interest |
LAMB WESTON HOLDINGS, INC., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Company), promises to pay interest on the principal amount of this 4.875% Senior Note due 2026 (this Note and, together with any other 4.875% Senior Notes due 2026, the Notes) at the rate per annum shown above. The Company will pay interest semiannually on May 1 and November 1 of each year, commencing May 1, 2017. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from November 9, 2016. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Notes plus 1% per annum, and it shall pay interest on overdue installments of interest at the rate borne by the Notes to the extent lawful.
2. | Method of Payment |
The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the April 15 or October 15 next preceding the interest payment date even if Notes are cancelled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC. The Company will make all payments in respect of a Definitive Note (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. | Paying Agent and Registrar |
Initially, Wells Fargo Bank, National Association (the Trustee) will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. | Indenture |
The Company issued the Notes under an Indenture dated as of November 9, 2016 (the Indenture), among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.
[This Note is one of the Initial Notes referred to in the Indenture.] The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Debt, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of the Company and each Guarantor to consolidate or merge with or into any other Person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of its Property.
A-1-5
5. | Optional Redemption |
(a) Except as set forth in clauses (b) and (c) below, the Notes may not be redeemed prior to November 1, 2021. Starting on that date, the Company may redeem all or any portion of the Notes, at once or over time and from time to time, at the redemption prices set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). The following prices are for Notes redeemed during the 12-month period commencing on November 1 of the years set forth below, and are expressed as percentages of principal amount:
Period |
Redemption Price | |||
2021 |
102.438 | % | ||
2022 |
101.625 | % | ||
2023 |
100.813 | % | ||
2024 and thereafter |
100.000 | % |
(b) Prior to November 1, 2021, the Company may redeem the Notes, in whole at any time or in part from time to time at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption, subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.
(c) Until November 1, 2019, the Company may, at any time and from time to time, redeem up to 35.0% of the aggregate principal amount of the Notes (including any Additional Notes) at a redemption price equal to 104.875% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in an amount no greater than the aggregate cash proceeds received from one or more Equity Offerings; provided that (1) at least 65.0% of the aggregate principal amount of Notes (including any Additional Notes) remains outstanding immediately after the occurrence of each such redemption and (2) each such redemption occurs within 90 days of the closing of such Equity Offering.
Notices of redemption may be subject to the satisfaction of one or more conditions precedent established by the Company in its sole discretion, including completion of an Equity Offering or other corporate transaction. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Companys discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed.
Applicable Premium means with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, or:
(A) the present value at such redemption date of (i) the redemption price of such Note at November 1, 2021 (such redemption price being set forth in the table appearing in clause (a) of this paragraph 5), plus (ii) all scheduled remaining interest payments due on such Note through November 1, 2021 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the principal amount of such Note.
Treasury Rate means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the
A-1-6
redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to November 1, 2021; provided , however , that if the period from the redemption date to November 1, 2021 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used. On the second Business Day preceding the applicable redemption date, the Company will (1) calculate the Treasury Rate and (2) file with the Trustee an Officers Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.
6. | Notice of Optional Redemption |
Notice of redemption shall be mailed by first-class mail (or electronic transmission in the case of Notes held in book-entry form) to each Holder of Notes to be redeemed at its registered address, at least 30 but not more than 60 days before the redemption date, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or a satisfaction and discharge of the Notes. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
7. | Sinking Fund |
The Notes are not subject to any sinking fund.
8. | Repurchase of Notes at the Option of Holders upon Change of Control |
Upon a Change of Control, unless the Company has exercised its right to redeem the Notes in full, the Company will be required to make an offer to repurchase all or any part of the Notes of such Holder at a purchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture.
9. | Guarantee |
The payment by the Company of the principal and interest is unconditionally guaranteed on a joint and several senior unsecured basis by each of the Guarantors to the extent set forth in the Indenture.
10. | Denominations; Transfer; Exchange |
The Notes are in registered form without coupons, in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A Holder shall transfer or exchange Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed or 15 days before an interest payment date.
11. | Persons Deemed Owners |
The registered Holder of this Note shall be treated as the owner of it for all purposes.
A-1-7
12. | Unclaimed Money |
If money for the payment of principal or interest remains unclaimed for two years, or prior to the applicable escheat date, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
13. | Discharge and Defeasance |
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Notes and the Indenture if the Company irrevocably deposits with the Trustee money in U.S. dollars or U.S. Government Obligations for the payment of principal and interest (including premium, if any) on the Notes, in each case to redemption or maturity.
14. | Amendment, Waiver |
Subject to certain exceptions set forth in the Indenture, the Company, the Guarantors and the Trustee may, with or without the consent of the Holders, modify, amend or supplement the Indenture, the Notes or the related Guarantees as provided in the Indenture.
15. | Defaults and Remedies |
If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of Notes then outstanding, subject to certain limitations, may declare all the Notes to be immediately due and payable. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Notes being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture. The Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and the Trustee, may rescind any declaration of acceleration and its consequences if the rescission would not conflict with any judgment or decree, and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.
16. | Trustee Dealings with the Company |
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee.
17. | No Recourse Against Others |
A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
18. | Authentication |
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
A-1-8
19. | Abbreviations |
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. | Governing Law |
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. | CUSIP Numbers |
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. To the extent such numbers have been issued, the Company has caused ISIN and Common Code numbers to be similarly printed on the Notes and has similarly instructed the Trustee. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note. Requests may be made to:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: General Counsel
A-1-9
LAMB WESTON HOLDINGS, INC. 4.875% SENIOR NOTES DUE 2026
ASSIGNMENT FORM
To assign this Note, fill in the form below:
The undersigned hereby assigns and transfers this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date: |
|
[Your Signature: |
|
|||||
Sign exactly as your name appears on the other side of this Note.] 1 | ||||||||
[Holder name exactly as it appears on the other side of this Note |
By: |
|
|
Name: | ||
Title] 2 |
Signature Guarantee: |
|
|||
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee |
Date: |
|
|
||||||
Signature of Signature Guarantee |
1 | For assignments by natural persons. |
2 | For assignments by Holders that are not natural persons. |
A-1-10
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of Trustee or Notes Custodian |
||||
A-1-11
LAMB WESTON HOLDINGS, INC. 4.875% SENIOR NOTES DUE 2026
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.07 (Asset Sale) or 4.12 (Change of Control) of the Indenture, check the box:
Asset Sale ☐ Change of Control ☐
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.07 (Asset Sale) or 4.12 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):
$
Date: |
|
Your Signature: |
|
|||||
(Sign exactly as your name appears on the other side of the Note) |
Signature Guarantee: |
|
|||
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee |
A-1-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
Wells Fargo Bank, National Association
Attn: Corporate Trust DAPS Reorg
600 South Fourth Street, MAC N9303-121
Minneapolis, MN 55402
Phone: 1-800-344-5128
Facsimile: 1-866-969-1290
Email: dapsreorg@wellsfargo.com
Re: 4.875% Senior Notes due 2026
Reference is hereby made to the Indenture, dated as of November 9, 2016 (the Indenture ), among Lamb Weston Holdings, Inc., as issuer (the Company ), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Transferor ) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the Transfer ), to (the Transferee ), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the Securities Act ), and, accordingly, the Transferor hereby further certifies that the beneficial interest in the Global Note or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest in the Global Note or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States and applicable securities laws of any other applicable jurisdiction.
2. ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(a) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer
B-1
is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an initial purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Restricted Notes Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. ☐ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction, and accordingly the Transferor hereby further certifies that (check one):
(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
(b) ☐ such Transfer is being effected to the Company or a subsidiary thereof;
(c) ☐ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or
(d) ☐ such Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 903, or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States.
4. ☐ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) ☐ Check if Transfer is pursuant to Rule 144 . (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) ☐ Check if Transfer is Pursuant to Regulation S . (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) ☐ Check if Transfer is Pursuant to Other Exemption . (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and the securities laws of any other applicable jurisdiction and (ii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in
B-2
accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
|
||
[Insert Name of Transferor] | ||
By: |
|
|
Name: | ||
Title: |
Dated: |
|
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. | The Transferor owns and proposes to transfer the following: |
[CHECK ONE OF (a) OR (b)]
(a) | ☐ a beneficial interest in the: |
(i) | ☐ 144A Global Note (CUSIP ), or |
(ii) | ☐ Regulation S Global Note (CUSIP ); or |
(b) | ☐ a Restricted Definitive Note. |
2. | After the Transfer the Transferee will hold: |
[CHECK ONE OF (a) OR (b) OR (c)]
(a) | ☐ a beneficial interest in the: |
(i) | ☐ 144A Global Note (CUSIP ), or |
(ii) | ☐ Regulation S Global Note (CUSIP ), or |
(iii) | ☐ Unrestricted Global Note (CUSIP ); or |
(b) | ☐ a Restricted Definitive Note; or |
(c) | ☐ an Unrestricted Definitive Note, |
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Facsimile: (208) 388-4299
Attention: General Counsel
Wells Fargo Bank, National Association
Attn: Corporate Trust DAPS Reorg
600 South Fourth Street, MAC N9303-121
Minneapolis, MN 55402
Phone: 1-800-344-5128
Facsimile: 1-866-969-1290
Email: dapsreorg@wellsfargo.com
Re: 4.875% Senior Notes due 2026
Reference is hereby made to the Indenture, dated as of November 9, 2016 (the Indenture ), among Lamb Weston Holdings, Inc., as issuer (the Company ), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Owner ) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $ in such Note[s] or interests (the Exchange ). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Note and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the Securities Act ), (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Note and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(c) ☐ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note . In connection with the Owners Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the
C-1
Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(d) ☐ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note . In connection with the Owners Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Restricted Notes Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owners own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on such Restricted Definitive Note and in the Indenture and the Securities Act.
(b) ☐ Check if Exchange is from Restricted Definitive Notes to beneficial interest in a Restricted Global Note . In connection with the Exchange of the Owners Restricted Definitive Note for a beneficial interest in the [CIRCLE ONE] 144A Global Note, Regulation S Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Definitive Note and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Restricted Notes Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
|
||
[Insert Name of Transferor] | ||
By: |
|
|
Name: | ||
Title: |
Dated: |
|
C-2
EXHIBIT D
[FORM OF]
SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE (this Supplemental Indenture ) dated as of [ ], among [NEW GUARANTOR] (the New Guarantor ), a subsidiary of LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Company ), the Company and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the Trustee ).
W I T N E S S E T H :
WHEREAS the Company, certain Guarantors and the Trustee have heretofore executed an indenture, dated as of November 9, 2016 (as amended, supplemented or otherwise modified, the Indenture ), providing for the issuance of the Companys 4.875% Senior Notes due 2026 (the Notes ), initially in the aggregate principal amount of $833,000,000;
WHEREAS Sections 4.14 and 10.07 of the Indenture provide that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Companys Obligations under the Notes and the Indenture pursuant to a Guarantee on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Company are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term Holders in this Supplemental Indenture shall refer to the term Holders as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words herein , hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2. Agreement to Guarantee . The New Guarantor hereby agrees, jointly and severally with all existing Guarantors (if any), to unconditionally guarantee the Companys Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article X of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Guarantor under the Indenture.
3. Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 11.01 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
5. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
D-1
6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
7. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
[ Remainder of page intentionally left blank. ]
D-2
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
LAMB WESTON HOLDINGS, INC. | ||
By: |
|
|
Name: | ||
Title: | ||
[ NEW GUARANTOR ], as a Guarantor | ||
By: |
|
|
Name: | ||
Title: | ||
WELLS FARGO BANK, NATIONAL ASSOCIATION , as Trustee |
||
By: |
|
|
Name: | ||
Title: |
D-3
Exhibit 10.1
EXECUTION COPY
TAX MATTERS AGREEMENT
between
ConAgra Foods, Inc.,
on behalf of itself
and the members
of the ConAgra Group,
and
Lamb Weston Holdings, Inc.
on behalf of itself
and the members
of the LW Group
Dated as of November 8, 2016
Table of Contents
Page | ||||||
SECTION 1. | Definitions. | 1 | ||||
SECTION 2. | Sole Tax Sharing Agreement. | 7 | ||||
SECTION 3. | Allocation of Taxes. | 8 | ||||
SECTION 4. | Preparation and Filing of Tax Returns. | 9 | ||||
SECTION 5. | Apportionment of Earnings and Profits and Tax Attributes. | 11 | ||||
SECTION 6. | Utilization of Tax Attributes. | 12 | ||||
SECTION 7. | Deductions and Reporting for Certain Awards. | 13 | ||||
SECTION 8. | Tax Benefits. | 14 | ||||
SECTION 9. | Certain Representations and Covenants. | 14 | ||||
SECTION 10. | Protective Section 336(e) Elections. | 19 | ||||
SECTION 11. | Indemnities. | 19 | ||||
SECTION 12. | Payments. | 21 | ||||
SECTION 13. | Guarantees. | 21 | ||||
SECTION 14. | Communication and Cooperation. | 22 | ||||
SECTION 15. | Audits and Contest. | 23 | ||||
SECTION 16. | Notices. | 24 | ||||
SECTION 17. | Costs and Expenses. | 24 | ||||
SECTION 18. | Effectiveness; Termination and Survival. | 25 | ||||
SECTION 19. | Specific Performance. | 25 | ||||
SECTION 20. | Construction. | 25 | ||||
SECTION 21. | Entire Agreement; Amendments and Waivers. | 26 | ||||
SECTION 22. | Governing Law and Interpretation. | 27 | ||||
SECTION 23. | Dispute Resolution. | 27 | ||||
SECTION 24. | Counterparts. | 27 | ||||
SECTION 25. | Successors and Assigns; Third Party Beneficiaries. | 28 | ||||
SECTION 26. | Authorization, Etc. | 28 | ||||
SECTION 27. | Change in Tax Law. | 28 | ||||
SECTION 28. | Principles. | 28 |
i
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (the Agreement ) is entered into as of November 8, 2016 between ConAgra Foods, Inc. ( ConAgra ), a Delaware corporation, on behalf of itself and the members of the ConAgra Group and Lamb Weston Holdings, Inc. ( SpinCo ), a Delaware corporation, on behalf of itself and the members of the LW Group.
WITNESSETH:
WHEREAS, pursuant to the Tax laws of various jurisdictions, certain members of the LW Group presently file certain Tax Returns on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of the Code) with certain members of the ConAgra Group;
WHEREAS, ConAgra and SpinCo have entered into a Separation Agreement, dated as of the date hereof (the Separation Agreement ), pursuant to which the LW Transfer, the Debt Exchange, the Distribution and other related transactions will be consummated;
WHEREAS, the Internal Restructuring, together with the LW Transfer, the Debt Exchange and the Distribution are intended to qualify for the Intended Tax-Free Treatment; and
WHEREAS, ConAgra and SpinCo desire to set forth their agreement on the rights and obligations of ConAgra, SpinCo and the members of the ConAgra Group and the LW Group respectively, with respect to (A) the administration and allocation of federal, state, local and foreign Taxes incurred in Taxable periods beginning prior to the Distribution Date, as defined below, (B) Taxes resulting from the Distribution and transactions effected in connection with the Distribution and (C) various other Tax matters.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:
SECTION 1. Definitions.
(a) As used in this Agreement:
Active Trade or Business has the meaning ascribed to the LW Business in the Separation Agreement.
Affiliate has the meaning set forth in the Separation Agreement.
Agreement has the meaning set forth in the preamble.
Applicable Law (or Applicable Tax Law , as the case may be) means, with respect to any Person, any federal, state, county, municipal, local, multinational or foreign statute, treaty, law, common law, ordinance, rule, regulation, order, writ, injunction, judicial decision, decree, permit or other legally binding requirement of any Governmental Authority applicable to such Person or any of its respective properties, assets, officers, directors, employees, consultants or agents (in connection with such officers, directors, employees, consultants or agents activities on behalf of such Person).
1
Business Day has the meaning set forth in the Separation Agreement.
CAP means the IRS Compliance Assurance Process.
Closing of the Books Method means the apportionment of items between portions of a Taxable period based on a closing of the books and records on the close of the Distribution Date (in the event that the Distribution Date is not the last day of the Taxable period, as if the Distribution Date were the last day of the Taxable period), subject to adjustment for items accrued on the Distribution Date that are properly allocable to the Taxable period following the Distribution, as determined by ConAgra in accordance with Applicable Law; provided that Taxes not based upon or measured by net or gross income or specific events shall be apportioned between the Pre- and Post-Distribution Periods on a pro rata basis in accordance with the number of days in each Taxable period.
Code has the meaning set forth in the Separation Agreement.
Combined Group means any group that filed or was required to file (or will file or be required to file) a Tax Return on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of the Code) that includes at least one member of the ConAgra Group and at least one member of the LW Group.
Combined Tax Return means a Tax Return filed in respect of federal, state, local or foreign income Taxes for a Combined Group, or any other affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of the Code) Tax Return of a Combined Group.
Company means ConAgra or SpinCo (or the appropriate member of each of their respective Groups), as appropriate.
ConAgra has the meaning ascribed thereto in the preamble.
ConAgra Compensatory Equity Interests means any options, stock appreciation rights, restricted stock, stock units or other rights with respect to ConAgra stock that are granted on or prior to the Distribution Date by any member of the ConAgra Group in connection with employee, independent contractor or director compensation or other employee benefits (including, for the avoidance of doubt, options, stock appreciation rights, restricted stock, restricted stock units, performance share units or other rights issued in respect of any of the foregoing by reason of the Distribution or any subsequent transaction).
ConAgra Group has the meaning set forth in the Separation Agreement.
ConAgra Separate Tax Return means any Tax Return that is required to be filed by, or with respect to, a member of the ConAgra Group that is not a Combined Tax Return.
Debt Exchange has the meaning set forth in the Separation Agreement.
2
Distribution has the meaning set forth in the Separation Agreement.
Distribution Date has the meaning set forth in the Separation Agreement.
Distribution Effective Time has the meaning set forth in the Separation Agreement.
Distribution Taxes means any Taxes incurred solely as a result of the failure of the Intended Tax-Free Treatment of the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution.
Equity Interests means any stock or other securities treated as equity for Tax purposes, options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.
Escheat Payment means any payment required to be made to a Governmental Authority pursuant to an abandoned property, escheat or similar law.
Existing GRAs has the meaning set forth on Schedule B to this Agreement.
Final Determination means (i) with respect to federal income Taxes, (A) a determination as defined in Section 1313(a) of the Code (including, for the avoidance of doubt, an executed IRS Form 906), (B) the execution of an IRS Form 870-AD (or any successor form thereto), as a final resolution of Tax liability for any Taxable period, except that a Form 870-AD (or successor form thereto) that reserves the right of the taxpayer to file a claim for refund or the right of the IRS to assert a further deficiency shall not constitute a Final Determination with respect to the item or items so reserved or (C) the execution of a CAP Issue Resolution Agreement (or any similar or successor agreement); (ii) with respect to Taxes other than federal income Taxes, any final determination of liability in respect of a Tax that, under Applicable Tax Law, is not subject to further appeal, review or modification through proceedings or otherwise; (iii) with respect to any Tax, any final disposition by reason of the expiration of the applicable statute of limitations (giving effect to any extension, waiver or mitigation thereof); or (iv) with respect to any Tax, the payment of such Tax by any member of the ConAgra Group or any member of the LW Group, whichever is responsible for payment of such Tax under Applicable Tax Law, with respect to any item disallowed or adjusted by a Taxing Authority; provided , in the case of this clause (iv), that the provisions of Section 15 hereof have been complied with, or, if such section is inapplicable, that the Company responsible under this Agreement for such Tax is notified by the Company paying such Tax that it has determined that no action should be taken to recoup such disallowed item, and the other Company agrees with such determination.
Foreign SpinCo Subsidiary means any member of the LW Group that is a controlled foreign corporation (as defined in Section 957 of the Code) with respect to which ConAgra is a United States shareholder (as defined in Section 951(b) of the Code) during the Taxable year of ConAgra that includes the Distribution Date.
Governmental Authority has the meaning set forth in the Separation Agreement.
Group has the meaning set forth in the Separation Agreement.
3
Indemnifying Party means the party from which another party is entitled to seek indemnification pursuant to the provisions of Section 11 .
Indemnitee means the party which is entitled to seek indemnification from another party pursuant to the provisions of Section 11 .
Intended Tax-Free Treatment means the qualification of (i) the LW Transfer, together with the Debt Exchange and the Distribution as a reorganization described in Section 368(a)(1)(D) of the Code and of each of ConAgra and SpinCo as a party to the reorganization within the meaning of Section 368(b) of the Code, (ii) the Distribution, as such, as a distribution of SpinCo Common Stock to ConAgras shareholders pursuant to Section 355 of the Code, (iii) the Special Cash Payment as money distributed to ConAgra creditors or shareholders in connection with the reorganization for purposes of Section 361(b) of the Code, (iv) the Special SpinCo Securities Issuance as a tax-free issuance under Section 361(a) of the Code and the Debt Exchange as a tax-free exchange to ConAgra within the meaning of Section 361(c) of the Code and (v) the transactions described on Schedule A as being free from Tax to the extent set forth therein.
Internal Restructuring has the meaning set forth in the Separation Agreement.
IRS means the United States Internal Revenue Service.
Lease has the meaning set forth in the Separation Agreement.
LW Business has the meaning set forth in the Separation Agreement.
LW Group has the meaning set forth in the Separation Agreement.
LW Transfer has the meaning set forth in the Separation Agreement.
NMTC Guaranty Agreements means the Tax Credit Guaranty Agreement between ConAgra Foods, Inc. and The Darton J. Zink Trust, dated as of April 23, 2010, the Tax Credit Guaranty Agreement between ConAgra Foods, Inc. and Hobby Lobby Stores, Inc., dated as of April 23, 2010 and the Tax Credit Guaranty Agreement between ConAgra Foods, Inc. and Gallup, Inc., dated as of April 15, 2014 (all of which relate to the qualification for federal new market tax credits under Section 45D of the Code in connection with the construction of the ConAgra Foods Lamb Weston, Inc. Delhi, Louisiana sweet potato facility).
NMTC Option Agreements means the Option Agreement between Hobby Lobby Stores, Inc., ConAgra Foods Lamb Weston, Inc. and COA Delhi Investment Fund LLC, dated as of April 23, 2010, the Option Agreement between The Darton Brink Trust, ConAgra Foods Lamb Weston, Inc. and COA Delhi Investment Fund LLC, dated as of April 23, 2010 and the Option Agreement between Gallup, Inc., ConAgra Foods Lamb Weston, Inc. and COA Delhi Investment Fund LLC, dated as of April 15, 2014 (all of which relate to the qualification for federal new market tax credits under Section 45D of the Code in connection with the construction of the ConAgra Foods Lamb Weston, Inc. Delhi, Louisiana sweet potato facility).
Option has the meaning set forth in the Separation Agreement.
4
Person has the meaning set forth in Section 7701(a)(1) of the Code.
Post-Distribution Period means any Taxable period (or portion thereof) beginning after the Distribution Date.
Pre-Distribution Period means any Taxable period (or portion thereof) ending on or before the Distribution Date.
Separation Agreement has the meaning set forth in the recitals.
Special Cash Payment has the meaning set forth in the Separation Agreement.
Special SpinCo Securities Issuance has the meaning set forth in the Separation Agreement.
SpinCo has the meaning set forth in the preamble.
SpinCo Carried Item shall mean any Tax Attribute of the LW Group that may or must be carried from one Taxable period to another prior Taxable period, or carried from one Taxable period to another subsequent Taxable period, under the Code or other Applicable Tax Law.
SpinCo Common Stock has the meaning set forth in the Separation Agreement.
SpinCo Compensatory Equity Interests means any options, stock appreciation rights, restricted stock, stock units or other rights with respect to the capital stock of SpinCo that are granted on or prior to the Distribution Effective Time by any member of the LW Group in connection with employee, independent contractor or director compensation or other employee benefits.
SpinCo Disqualifying Action means (a) any action (or the failure to take any action) by any member of the LW Group after the Distribution Effective Time (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions), (b) any event (or series of events) after the Distribution Effective Time involving the capital stock of SpinCo or any assets of any member of the LW Group or (c) any breach by any member of the LW Group after the Distribution Effective Time of any representation, warranty or covenant made by them in this Agreement that, in each case, would affect the Intended Tax-Free Treatment; provided , however , that the term SpinCo Disqualifying Action shall not include any action entered into pursuant to any Transaction Document or that is undertaken pursuant to the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution.
SpinCo Securities has the meaning set forth in the Separation Agreement.
SpinCo Separate Tax Return means any Tax Return that is required to be filed by, or with respect to, any member of the LW Group that is not a Combined Tax Return.
5
Tax (and the correlative meaning, Taxes , Taxing and Taxable ) means (i) any tax, including any net income, gross income, gross receipts, recapture, alternative or add-on minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, net wealth, license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property, asset, real estate acquisition, environmental, custom duty, impost, obligation, assessment, levy, tariff or other tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, any Escheat Payment), together with any interest and any penalty, addition to tax or additional amount imposed by a Taxing Authority; or (ii) any liability of any member of the ConAgra Group or the LW Group for the payment of any amounts described in clause (i) as a result of any express or implied obligation to indemnify any other Person.
Tax Attribute means a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, excess charitable contribution, unused general business credit, alternative minimum tax credit or any other Tax Item that could reduce a Tax liability.
Tax Benefit means any refund, credit, offset or other reduction in otherwise required Tax payments.
Tax Counsel means Davis Polk & Wardwell LLP.
Tax Item means any item of income, gain, loss, deduction, credit, recapture of credit or any other item that can increase or decrease Taxes paid or payable.
Tax Opinions shall mean the legal opinions delivered to ConAgra by Tax Counsel with respect to certain U.S. federal income Tax consequences of the Internal Restructuring, the LW Transfer, the Debt Exchange and the Distribution.
Tax Proceeding means any Tax audit, dispute, examination, contest, litigation, arbitration, action, suits, claim, cause of action, review, inquiry, assessment, hearing, complaint, demand, investigation or proceeding (whether administrative, judicial or contractual).
Tax-Related Losses means, with respect to any Taxes imposed pursuant to any settlement, determination, judgment or otherwise, (i) all accounting, legal and other professional fees, and court costs incurred in connection with such Taxes, as well as any other out-of-pocket costs incurred in connection with such Taxes and (ii) all damages, costs, and expenses associated with stockholder litigation or controversies and any amount paid by any member of the ConAgra Group or any member of the LW Group in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Taxing Authority, in each case, resulting from the failure of the Intended Tax-Free Treatment of the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution.
Tax Representation Letters means the representations provided by SpinCo and ConAgra to Tax Counsel in connection with the rendering by Tax Counsel of the Tax Opinions.
Tax Return means any Tax return, statement, report, form, election, bill, certificate, claim or surrender (including estimated Tax returns and reports, extension requests and forms, and information returns and reports), or statement or other document or written information filed or required to be filed with any Taxing Authority, including any amendment thereof, appendix, schedule or attachment thereto.
6
Taxing Authority means any Governmental Authority (domestic or foreign), including, without limitation, any state, municipality, political subdivision or governmental agency, responsible for the imposition, assessment, administration, collection, enforcement or determination of any Tax.
Transaction Documents has the meaning set forth in the Separation Agreement.
Transfer Taxes means all U.S. federal, state, local or foreign sales, use, privilege, transfer, documentary, stamp, duties, real estate transfer, controlling interest transfer, recording and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any member of the ConAgra Group or any member of the LW Group in connection with the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution.
(b) Each of the following terms is defined in the Section set forth opposite such term:
Term |
Section |
|
CAP Proceeding |
Section 15(b) | |
Due Date |
Section 12(a) | |
Internal Tax-Free Transactions |
Schedule A | |
Past Practices |
Section 4(e)(i) | |
Section 336(e) Election |
Section 10(a) | |
Section 9(b)(v)(F) Acquisition Transaction |
Section 9(b)(v)(F) | |
SpinCo 951(a) Taxes |
Section 3(b) | |
Tax Arbiter |
Section 23 | |
Tax Benefit Recipient |
Section 8(c) |
(c) All capitalized terms used but not defined herein shall have the same meanings as in the Separation Agreement. Any term used in this Agreement which is not defined in this Agreement or the Separation Agreement shall, to the extent the context requires, have the meaning assigned to it in the Code or the applicable Treasury Regulations thereunder (as interpreted in administrative pronouncements and judicial decisions) or in comparable provisions of Applicable Tax Law.
SECTION 2. Sole Tax Sharing Agreement . Any and all existing Tax sharing agreements or arrangements, written or unwritten, between any member of the ConAgra Group, on the one hand, and any member of the LW Group, on the other hand, if not previously terminated, shall be terminated as of the Distribution Date without any further action by the parties thereto. Following the Distribution, no member of the LW Group or the ConAgra Group shall have any further rights or liabilities thereunder, and, except for Section 4.04(b) of the Separation Agreement, Section 4.2 of the Transition Services Agreement, Section 4.2 of the Reverse Transition Services Agreement, Section 10.3(b) of the Employee Matters Agreement and Sections 3.2 and 3.5 of the Lease, this Agreement shall be the sole Tax sharing agreement between the members of the LW Group on the one hand, and the members of the ConAgra Group, on the other hand.
7
SECTION 3. Allocation of Taxes .
(a) General Allocation Principles . Except as provided in Section 3(c ), all Taxes shall be allocated as follows:
(i) Allocation of Taxes for Combined Tax Returns . ConAgra shall be allocated all Taxes reported, or required to be reported, on any Combined Tax Return that any member of the ConAgra Group files or is required to file under the Code or other Applicable Tax Law; provided , however , that to the extent any such Combined Tax Return includes any Tax Item attributable to any member of the LW Group or the LW Business in respect of any Post-Distribution Period, SpinCo shall be allocated all Taxes attributable to such Tax Items as determined by ConAgra in its reasonable discretion.
(ii) Allocation of Taxes for Separate Tax Returns .
(A) ConAgra shall be allocated all Taxes reported, or required to be reported, on a ConAgra Separate Tax Return.
(B) SpinCo shall be allocated all Taxes reported, or required to be reported, on a SpinCo Separate Tax Return.
(iii) Taxes Not Reported on Tax Returns . SpinCo shall be allocated any Tax attributable to any member of the LW Group that is not required to be reported on a Tax Return and ConAgra shall be allocated any Tax attributable to any member of the ConAgra Group that is not required to be reported on a Tax Return.
(b) Allocation Conventions .
(i) All Taxes allocated pursuant to Section 3(a ) shall be allocated in accordance with the Closing of the Books Method; provided , however , that if Applicable Tax Law does not permit a LW Group member to close its Taxable year on the Distribution Date, the Tax attributable to the operations of the members of the LW Group for any Pre-Distribution Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method; provided further that any and all Taxes reported, or required to be reported, on a SpinCo Separate Tax Return, or a Tax Return of a member of the LW Group to the extent attributable to a member of the LW Group, under Section 951(a) of the Code ( SpinCo 951(a) Taxes ) that, in either case, are attributable to items for a Pre-Distribution Period (determined in accordance with the Closing of the Books Method as though the Taxable year of each controlled foreign corporation (within the meaning of Section 957 of the Code) giving rise to items ended on the Distribution Date) shall be allocated to ConAgra, and that any SpinCo 951(a) Taxes that, in either case, are attributable to items for a Post-Distribution Period (determined as though the Taxable year of each controlled foreign corporation (within the meaning of Section 957 of the Code) giving rise to items ended on the Distribution Date) shall be allocated to SpinCo;
8
(ii) Any Tax Item of SpinCo or any member of their respective Groups arising from a transaction engaged in outside the ordinary course of business on the Distribution Date after the Distribution Effective Time shall be allocable to SpinCo and any such transaction by or with respect to SpinCo or any member of their respective Groups occurring after the Distribution Effective Time shall be treated for all Tax purposes (to the extent permitted by Applicable Tax Law) as occurring at the beginning of the day following the Distribution Date in accordance with the principles of Treasury Regulations Section 1.1502-76(b) (assuming no election is made under section 1.1502-76(b)(2)(ii) of the Treasury Regulations (relating to a ratable allocation of a years Tax Items)); provided that the foregoing shall not include any action that is undertaken pursuant to the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution.
(c) Special Allocation Rules . Notwithstanding any other provision in this Section 3, the following Taxes shall be allocated as follows:
(i) Transfer Taxes . Transfer Taxes shall be allocated 50% to ConAgra and 50% to SpinCo.
(ii) Taxes Relating to ConAgra Compensatory Equity Interests . Any Tax liability (including, for the avoidance of doubt, the satisfaction of any withholding Tax obligation) relating to the issuance, exercise, vesting or settlement of any ConAgra Compensatory Equity Interest shall be allocated in a manner consistent with Section 7.
(iii) Distribution Taxes and Tax-Related Losses . Any liability for Distribution Taxes and Tax-Related Losses resulting from a SpinCo Disqualifying Action shall be allocated in a manner consistent with Section 11(a)(iii).
(iv) Taxes Relating to Deferred Intercompany Transactions . Any liability for income Taxes attributable to transactions described in Treasury Regulations Section 1.1502-13 or comparable provisions of state or local law that are solely between or among members of the LW Group and that are entered into prior to the Distribution Date shall be allocated to SpinCo.
SECTION 4. Preparation and Filing of Tax Returns .
(a) ConAgra Group Combined Tax Returns .
(i) ConAgra shall prepare and file, or cause to be prepared and filed, Combined Tax Returns for which a member of the ConAgra Group is required or, as provided in Section 4(e)(iv ), elects, to file a Combined Tax Return. Each member of any such Combined Group shall execute and file such consents, elections and other documents as may be required, appropriate or otherwise requested by ConAgra in connection with the filing of such Combined Tax Returns.
(ii) To the extent that any member of the LW Group is included in any Combined Return for a Taxable period that includes the Distribution Date, ConAgra shall include in such Combined Return the results of such member of the LW Group on the basis of the Closing of the Books Method to the extent permitted by Applicable Tax Law.
9
(b) SpinCo Separate Tax Returns .
(i) Tax Returns to Be Prepared by ConAgra . ConAgra shall prepare (or cause to be prepared) and, to the extent permitted by Applicable Law, file (or cause to be filed) all SpinCo Separate Tax Returns that relate in whole or in part to any Pre-Distribution Period for which ConAgra is liable for any Taxes; provided , however , that with respect to any such Tax Return that is prepared by ConAgra but required to be filed by a member of the LW Group under Applicable Law, ConAgra shall provide such Tax Returns to SpinCo at least 45 days prior to the due date for filing such Tax Returns (taking into account any applicable extension periods) with the amount of any Taxes shown as due thereon, and SpinCo shall, subject to Section 4(d), execute and file (or cause to be executed and filed) the Tax Returns.
(ii) Tax Returns to Be Prepared by SpinCo . SpinCo shall prepare and file (or cause to be prepared and filed) all SpinCo Separate Tax Returns that are not described in Section 4(b)(i ).
(c) Provision of Information; Timing . SpinCo shall maintain all necessary information for ConAgra (or any of its Affiliates) to file any Tax Return that ConAgra is required or permitted to file under this Section 4, and shall provide to ConAgra all such necessary information in accordance with the ConAgra Groups past practice. ConAgra shall maintain all necessary information for SpinCo (or any of its Affiliates) to file any Tax Return that SpinCo is required or permitted to file under this Section 4, and shall provide SpinCo with all such necessary information in accordance with the LW Groups past practice.
(d) Review of SpinCo Separate Tax Returns . The party that is required to prepare a SpinCo Separate Tax Return (other than a SpinCo Separate Tax Return that relates solely to a Post-Distribution Period) that is required to be filed after the Distribution Date shall submit a draft of such Tax Return to the non-preparing party, if requested, to the extent (A) such Tax Return relates to Taxes for which the requesting Party would reasonably be expected to be liable, or (B) such Tax Return relates to Taxes for which the requesting Party would reasonably be expected to have a claim for Tax Benefits under this Agreement. The Party responsible for preparing (or causing to be prepared) the relevant Tax Return shall (x) use its reasonable best efforts to make such portion of such Tax Return available for review as required under this paragraph sufficiently in advance of the due date for filing of such Tax Return to provide the requesting Party with a meaningful opportunity to analyze and comment on such Tax Return and (y) use reasonable efforts to have such Tax Return modified before filing, taking into account the Person responsible for payment of the Tax (if any) reported on such Tax Return and whether the amount of Tax liability allocable to the requesting Party with respect to such Return is material. The Parties shall attempt in good faith to resolve any issues arising out of the review of such Tax Return.
(e) Special Rules Relating to the Preparation of Tax Returns .
(i) General Rule . Except as provided in this Section 4(e)(i ), SpinCo shall prepare (or cause to be prepared) any Tax Return for which it is responsible under this Section 4 in accordance with past practices, accounting methods, elections or conventions ( Past Practices ) used by the members of the ConAgra Group prior to the Distribution Date with respect to such Tax Return, and to the extent any items, methods or positions are not covered by Past Practices, as directed by ConAgra.
10
(ii) Consistency with Intended Tax-Free Treatment . All Tax Returns that include any member of the ConAgra Group or any member of the LW Group shall be prepared in a manner that is consistent with the Intended Tax-Free Treatment.
(iii) SpinCo Separate Tax Returns . With respect to any SpinCo Separate Tax Return for which SpinCo is responsible pursuant to this Agreement, SpinCo and the other members of the LW Group shall include such Tax Items in such SpinCo Separate Tax Return in a manner that is consistent with the inclusion of such Tax Items in any related Tax Return for which ConAgra is responsible to the extent such Tax Items are allocated in accordance with this Agreement.
(iv) Election to File Combined Tax Returns . ConAgra shall have the sole discretion to file any Combined Tax Return if the filing of such Tax Return is elective under Applicable Tax Law.
(v) Preparation of Transfer Tax Returns . The Company required under Applicable Tax Law to file any Tax Returns in respect of Transfer Taxes shall prepare and file (or cause to be prepared and filed) such Tax Returns. If required by Applicable Tax Law, ConAgra and SpinCo shall, and shall cause their respective Affiliates to, cooperate in preparing and filing, and join the execution of, any such Tax Returns.
(f) Payment of Taxes . ConAgra shall pay (or cause to be paid) to the proper Taxing Authority (or to SpinCo with respect to any SpinCo Separate Tax Return prepared by ConAgra but required to be filed by a member of the LW Group under Applicable Tax Law) the Tax shown as due on any Tax Return for which a member of the ConAgra Group is responsible under this Section 4, and SpinCo shall pay (or cause to be paid) to the proper Taxing Authority the Tax shown as due on any Tax Return for which a member of the LW Group is responsible under this Section 4. If any member of the ConAgra Group is required to make a payment to a Taxing Authority for Taxes allocated to SpinCo under Section 3, SpinCo shall pay the amount of such Taxes to ConAgra in accordance with Section 11 and Section 12. If any member of the LW Group is required to make a payment to a Taxing Authority for Taxes allocated to ConAgra under Section 3, ConAgra shall pay the amount of such Taxes to SpinCo in accordance with Section 11 and Section 12.
SECTION 5. Apportionment of Earnings and Profits and Tax Attributes .
(a) Tax Attributes arising in a Pre-Distribution Period will be allocated to (and the benefits and burdens of such Tax Attributes will inure to) the members of the ConAgra Group and the members of the LW Group in accordance with ConAgras historical practice (including historical methodologies for making corporate allocations), the Code, Treasury Regulations, and any applicable state, local and foreign law, as determined by ConAgra in its sole discretion.
11
(b) ConAgra shall in good faith advise SpinCo as soon as reasonably practicable after the close of the relevant Taxable period in which the Distribution occurs in writing of the portion, if any, of any earnings and profits, Tax Attributes, tax basis, overall foreign loss or other consolidated, combined or unitary attribute which ConAgra determines shall be allocated or apportioned to the members of the LW Group under Applicable Tax Law. All members of the LW Group shall prepare all Tax Returns in accordance with such written notice. In the event of an adjustment to the earnings and profits, any Tax Attributes, tax basis, overall foreign loss or other consolidated, combined or unitary attribute determined by ConAgra, ConAgra shall promptly notify SpinCo in writing of such adjustment. For the avoidance of doubt, ConAgra shall not be liable to any member of the LW Group for any failure of any determination under this Section 5(b ) to be accurate under Applicable Tax Law, provided such determination was made in good faith.
(c) Except as otherwise provided herein, to the extent that the amount of any earnings and profits, Tax Attributes, tax basis, overall foreign loss or other consolidated, combined or unitary attribute allocated to members of the ConAgra Group or the LW Group pursuant to Section 5(b) is later reduced or increased by a Taxing Authority or as a result of a Tax Proceeding, such reduction or increase shall be allocated to the Company to which such earnings and profits, Tax Attributes, tax basis, overall foreign loss or other consolidated, combined or unitary attribute was allocated pursuant to this Section 5 , as determined by ConAgra in good faith.
SECTION 6. Utilization of Tax Attributes .
(a) Amended Returns . Any amended Tax Return or claim for a refund with respect to any member of the LW Group may be made only by the party responsible for preparing the original Tax Return with respect to such member of the LW Group pursuant to Section 4.
(b) ConAgra Discretion . SpinCo hereby agrees that ConAgra shall be entitled to determine in its sole discretion whether to (x) file or to cause to be filed any claim for a refund or adjustment of Taxes with respect to any Combined Return in order to claim in any Pre-Distribution Period any SpinCo Carried Item, (y) make or cause to be made any available elections to waive the right to claim in any Pre-Distribution Period, with respect to any Combined Return, any SpinCo Carried Item, and (z) make or cause to be made any affirmative election to claim in any Pre-Distribution Period any SpinCo Carried Item. Subject to Section 6(c), SpinCo shall submit a written request to ConAgra in order to seek ConAgras consent with respect to any of the actions described in this Section 6(b).
(c) SpinCo Carrybacks to Combined Returns .
(i) Each member of the SpinCo Group shall elect, to the extent permitted by Applicable Tax Law, to forgo the right to carry back any SpinCo Carried Item from a Post-Distribution Period to a Combined Return.
(ii) If a member of the SpinCo Group determines that it is required by Applicable Tax Law to carry back any SpinCo Carried Item to a Combined Return, it shall notify ConAgra in writing of such determination at least 90 days prior to filing the Tax Return on which such carryback will be reflected. If ConAgra disagrees with such determination, the parties shall resolve their disagreement pursuant to the procedures set forth in Section 23.
12
(iii) For the avoidance of doubt, if a SpinCo Carried Item is carried back to a Combined Return for any reason, no member of the ConAgra Group shall be required to make any payment to, or otherwise compensate, any member of the SpinCo Group in respect of such SpinCo Carried Item.
(b) Carryforwards to Separate Tax Returns . If a portion or all of any Tax Attribute is allocated to a member of a Combined Group pursuant to Section 5, and is carried forward or back to a SpinCo Separate Tax Return, any Tax Benefits arising from such carryforward shall be retained by the LW Group. If a portion or all of any Tax Attribute is allocated to a member of a Combined Group pursuant to Section 5, and is carried forward or back to a ConAgra Separate Tax Return, any Tax Benefits arising from such carryforward or carryback shall be retained by the ConAgra Group.
SECTION 7. Deductions and Reporting for Certain Awards .
(a) Deductions . To the extent permitted by Applicable Tax Law, income Tax deductions with respect to the issuance, exercise, vesting or settlement after the Distribution Date of any ConAgra Compensatory Equity Interests or SpinCo Compensatory Equity Interests shall be claimed (A) in the case of an active officer or employee, solely by the Group that employs such Person at the time of such issuance, exercise, vesting, or settlement, as applicable; (B) in the case of a former officer or employee, solely by the Group that was the last to employ such Person and; (C) in the case of a director or former director (who is not an officer or employee or former officer or employee of a member of either Group), (x) solely by the ConAgra Group if such person was, at any time before or after the Distribution, a director of any member of the ConAgra Group, and (y) in any other case, solely by the LW Group.
(b) If, notwithstanding clause (a), the LW Group actually utilizes any deductions for a Taxable period ending after the Distribution Date with respect to (i) the issuance, exercise, vesting or settlement after the Distribution Date of any ConAgra Compensatory Equity Interests, (ii) any liability with respect to compensation required to be paid or satisfied by, or otherwise allocated to, any member of the ConAgra Group in accordance with any Transaction Document, SpinCo shall promptly remit an amount equal to the overall net reduction in actual cash Taxes paid by the LW Group (determined on a with and without basis) resulting from the event giving rise to such deduction (and any income in respect of such event, subject to Section 12(b )) in the year of such event. If a Taxing Authority subsequently reduces or disallows the use of such a deduction by the LW Group, ConAgra shall return an amount equal to the overall net increase in Tax liability of the LW Group owing to the Taxing Authority to the remitting party.
(c) Withholding and Reporting . For any Taxable period (or portion thereof), except as ConAgra may at any time determine in its reasonable discretion, ConAgra shall satisfy, or shall cause to be satisfied, all applicable withholding and reporting responsibilities (including all income, payroll or other Tax reporting related to income to any current or former employees) with respect to the issuance, exercise, vesting or settlement of such ConAgra Compensatory
13
Equity Interests that settle with or with respect to stock of ConAgra. For any Taxable period (or portion thereof), SpinCo shall satisfy, or shall cause to be satisfied, all applicable withholding and reporting responsibilities (including all income, payroll or other Tax reporting related to income to any current or former employees) with respect to the exercise, vesting or settlement of such SpinCo Compensatory Equity Interests that settle with or with respect to stock of SpinCo. ConAgra and SpinCo acknowledge and agree that the parties shall cooperate with each other and with third-party providers to effectuate withholding and remittance of Taxes, as well as required Tax reporting, in a timely manner.
SECTION 8. Tax Benefits .
(a) ConAgra Tax Benefits . ConAgra shall be entitled to any Tax Benefits (including, in the case of any refund received, any interest thereon actually received) received by any member of the ConAgra Group or any member of the LW Group, other than any Tax Benefits (or any amounts in respect of Tax Benefits) to which SpinCo is entitled pursuant to Section 8(b). SpinCo shall not be entitled to any Tax Benefits received by any member of the ConAgra Group or the LW Group, except as set forth in Section 8(b).
(b) SpinCo Tax Benefits . SpinCo shall be entitled to any Tax Benefits (including, in the case of any refund received, any interest thereon actually received) received by any member of the ConAgra Group or any member of the LW Group after the Distribution Date with respect to any Tax allocated to a member of the LW Group under this Agreement (including, for the avoidance of doubt, any amounts allocated to SpinCo pursuant to Section 3(c)(iii) or Section 3(c)(iv)).
(c) A Company receiving (or realizing) a Tax Benefit to which another Company is entitled hereunder (a Tax Benefit Recipient ) shall pay over the amount of such Tax Benefit (including interest received from the relevant Taxing Authority, but net of any Taxes imposed with respect to such Tax Benefit and any other reasonable costs) within thirty (30) days of receipt thereof (or from the due date for payment of any Tax reduced thereby); provided, however , that the other Company, upon the request of such Tax Benefit Recipient, shall repay the amount paid to the other Company (plus any penalties, interest or other charges imposed by the relevant Taxing Authority) in the event that, as a result of a subsequent Final Determination, a Tax Benefit that gave rise to such payment is subsequently disallowed.
SECTION 9. Certain Representations and Covenants .
(a) Representations .
(i) SpinCo and each other member of the LW Group represents that as of the date hereof, and covenants that as of the Distribution Date, there is no plan or intention:
(A) to liquidate SpinCo or to merge or consolidate any member of the LW Group with any other Person subsequent to the Distribution;
(B) to sell or otherwise dispose of any material asset of any member of the LW Group, except in the ordinary course of business;
14
(C) to take or fail to take any action in a manner that is inconsistent with the written information and representations furnished by SpinCo to Tax Counsel in connection with the Tax Representation Letters or Tax Opinions;
(D) to repurchase stock of SpinCo other than in a manner that satisfies the requirements of Section 4.05(1)(b) of IRS Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by IRS Revenue Procedure 2003-48) and consistent with any representations made to Tax Counsel in connection with the Tax Representation Letters;
(E) to take or fail to take any action in a manner that management of SpinCo knows, or should know, is reasonably likely to contravene any Existing GRA or (ii) any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the LW Group is a party; or
(F) to enter into any negotiations, agreements, or arrangements with respect to transactions or events (including stock issuances, pursuant to the exercise of options or otherwise, option grants, the adoption of, or authorization of shares under, a stock option plan, capital contributions, or acquisitions, but not including the Distribution) that could reasonably be expected to cause the Distribution to be treated as part of a plan (within the meaning of Section 355(e) of the Code) pursuant to which one or more Persons acquire directly or indirectly SpinCo stock representing a 50% or greater interest within the meaning of Section 355(d)(4) of the Code.
(b) Covenants .
(i) SpinCo shall not, and shall not permit any other member of the LW Group to, take or fail to take any action that constitutes a SpinCo Disqualifying Action.
(ii) SpinCo shall not, and shall not permit any other member of the LW Group to, take or fail to take any action that is inconsistent with the information and representations furnished by SpinCo to Tax Counsel in connection with the Tax Representation Letters or Tax Opinions;
(iii) SpinCo shall not, and shall not permit any other member of the LW Group to, take or fail to take any action in a manner that management of SpinCo knows, or should know, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the LW Group or the ConAgra Group is a party;
(iv) SpinCo shall not, and shall not permit any other member of the LW Group to, take or fail to take any action with respect to the SpinCo Securities that would result in the (x) retirement or repurchase, in whole or in part, of the SpinCo Securities, (y) any change in obligor of the SpinCo Securities, or (z) the occurrence of a significant modification within the meaning of Treasury Regulations Section 1.1001-3(e) of the SpinCo Securities, in each case, on or prior to the fifth anniversary of the Distribution Date.
15
(v) During the two-year period following the Distribution Date:
(A) SpinCo shall (w) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (x) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (y) cause each other member of the LW Group whose Active Trade or Business is relied upon for purposes of qualifying the Distribution for the Intended Tax-Free Treatment to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other Applicable Tax Law, and (z) not engage in any transaction or permit any other member of the LW Group to engage in any transaction that would result in a member of the LW Group described in clause (z) hereof ceasing to be a company engaged in the relevant Active Trade or Business for purposes of Section 355(b)(2) of the Code or such other Applicable Tax Law, taking into account Section 355(b)(3) of the Code for purposes of each of clauses (w) through (z) hereof;
(B) SpinCo shall not repurchase stock of SpinCo in a manner contrary to the requirements of Section 4.05(1)(b) of IRS Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by IRS Revenue Procedure 2003-48) or inconsistent with any representations made by SpinCo to Tax Counsel in connection with the Tax Representation Letters;
(C) SpinCo shall not, and shall not agree to, merge, consolidate or amalgamate with any other Person;
(D) SpinCo shall not, and shall not permit any other member of the LW Group to, or to agree to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Interests of SpinCo or of any other member of the LW Group; provided , however , that SpinCo may issue Equity Interests to the extent such issuances satisfy Safe Harbor VIII (relating to acquisitions in connection with a persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulations Section 1.355-7(d);
(E) SpinCo shall not, and shall not permit any other member of the LW Group to (I) solicit any Person to make a tender offer for, or otherwise acquire or sell, the Equity Interests of SpinCo, (II) participate in or support any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Interests of SpinCo or (III) approve or otherwise permit any proposed business combination or any transaction which, in the cause of clauses (I) or (II), individually or in the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years before the Distribution Date and any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Distribution, could result in one or more Persons acquiring (except
16
for acquisitions that otherwise satisfy Safe Harbor VIII (relating to acquisitions in connection with a persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d)) directly or indirectly stock representing a 40% or greater interest, by vote or value, in SpinCo (or any successor thereto) (any such transaction, a Proposed Acquisition Transaction ); provided further that any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in the restrictions in this clause (viii) and the interpretation thereof;
(F) if any member of the LW Group proposes to enter into any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 25% instead of 40% (a Section 9(b)(v)(F) Acquisition Transaction ) or, to the extent SpinCo has the right to prohibit any Section 9(b)(v)(F) Acquisition Transaction, proposes to permit any Section 9(b)(v)(F) Acquisition Transaction to occur, in each case, SpinCo shall provide ConAgra, no later than 10 Business Days following the signing of any written agreement with respect to the Section 9(b)(v)(F) Acquisition Transaction, a written description of such transaction (including the type and amount of Equity Interests of SpinCo to be issued in such transaction) and a certificate of the board of directors of SpinCo to the effect that the Section 9(b)(v)(F) Acquisition Transaction is not a Proposed Acquisition Transaction.
(G) SpinCo shall not, and shall not permit any other member of the LW Group to, amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of the Equity Interests of SpinCo (including, without limitation, through the conversion of one class of Equity Interests of SpinCo into another class of Equity Interests of SpinCo).
(vi) SpinCo shall not take or fail to take, or permit any other member of the LW Group to take or fail to take, any action which prevents or could reasonably be expected to result in Tax treatment that is inconsistent with the Intended Tax-Free Treatment.
(vii) With respect to any Foreign SpinCo Subsidiary, SpinCo shall not, and shall not permit any other member of the LW Group to, for the period after the Distribution Date through May 28, 2017:
(A) make or change any Tax election, amend any Tax Return, change any method of Tax accounting or change the Taxable period of any Foreign SpinCo Subsidiary for any Tax year for U.S. or foreign tax reporting purposes that includes the Distribution Date;
17
(B) cause or permit a distribution (within the meaning of Section 301 of the Code) to be made with respect to the capital stock of any Foreign SpinCo Subsidiary;
(C) make or cause to be made any investment in U.S. property within the meaning of Section 956 of the Code; or
(D) restructure the business of any Foreign SpinCo Subsidiary or engage in any extraordinary transaction;
in each case, if such transaction would be reasonably likely to (i) generate earnings and profits of the Foreign SpinCo Subsidiary (as determined under the Code) that is taxed at a rate materially lower than the statutory rate applicable to the Foreign SpinCo Subsidiary in the applicable jurisdiction, (ii) give rise to any income to ConAgra or ConAgra Group under Section 951 of the Code or (iii) would otherwise adversely impact the amount of ConAgra or ConAgra Groups associated deemed-paid foreign tax credits within the meaning of Section 902 of the Code.
(viii) SpinCo shall, or shall cause the relevant SpinCo Subsidiary to, enter into new gain recognition agreements with respect to the Existing GRAs pursuant to Section 1.367(a)-8 of the Treasury Regulations so as to render an exception set forth in Section 1.367(a)-8(k) available with respect to any triggering event arising by reason of the transactions contemplated by the Transaction Documents. Each such new gain recognition agreement shall, to the extent consistent with the corresponding Existing GRA, contain an election under Section 1.367(a)-8(c)(2)(vi) to report any gain recognized under Section 1.367(a)-8(c)(1)(i) in the taxable year during which a gain recognition event occurs.
(ix) From the date hereof until April 24, 2017, SpinCo shall not, and shall cause each other member of the LW Group to not, take any action or fail to take any action that could reasonably be expected to give rise to a Credit Recapture, as such term is defined under the NMTC Guaranty Agreements.
(x) From the date hereof until June 24, 2017, SpinCo shall not, and shall cause each other member of the LW Group to not, take any action inconsistent with the obligations of SpinCo or any other member of the LW Group under the NMTC Option Agreements.
(c) SpinCo Covenants Exceptions . Notwithstanding the provisions of Section 9(b), SpinCo and the other members of the LW Group may take any action that would reasonably be expected to be inconsistent with the covenants contained in (b ), if either: (i) SpinCo notifies ConAgra of its proposal to take such action and SpinCo and ConAgra obtain a ruling from the IRS to the effect that such action will not affect the Intended Tax-Free Treatment, provided that SpinCo agrees in writing to bear any expenses associated with obtaining such a ruling and, provided further that the LW Group shall not be relieved of any liability under Section 11(a ) of this Agreement by reason of seeking or having obtained such a ruling; or (ii) SpinCo notifies
18
ConAgra of its proposal to take such action and obtains an unqualified opinion of counsel (A) from a Tax advisor recognized as an expert in federal income Tax matters and acceptable to ConAgra in its sole discretion, (B) on which ConAgra may rely and (C) to the effect that such action will not affect the Intended Tax-Free Treatment, provided further that the LW Group shall not be relieved of any liability under Section 11(a ) of this Agreement by reason of having obtained such an opinion.
SECTION 10. Protective Section 336(e) Elections .
(a) Section 336(e) Election. Pursuant to Treasury Regulations Sections 1.336-2(h)(1)(i) and 1.336-2(j), ConAgra and SpinCo agree that ConAgra shall make a timely protective election under Section 336(e) of the Code and the Treasury Regulations issued thereunder for each member of the LW Group that is a domestic corporation for U.S. federal income Tax purposes with respect to the Distribution (a Section 336(e) Election ). It is intended that a Section 336(e) Election will have no effect unless the Distribution is a qualified stock disposition, as defined in Treasury Regulations Section 1.336(e)-1(b)(6), by reason of the application of Treasury Regulations Section 1.336-1(b)(5)(i)(B) or Treasury Regulations Section 1.336-1(b)(5)(ii).
(b) ConAgra TRA . If any failure of the Intended Tax-Free Treatment of the Internal Restructuring, the LW Transfer, the Debt Exchange or the Distribution results in Taxes (including any Taxes attributable to the Section 336(e) Election) that are not allocated to SpinCo pursuant to Section 3, (i) ConAgra shall be entitled to periodic payments from SpinCo equal to the product of (x) 85% of the Tax savings arising from the step-up in Tax basis resulting from the Section 336(e) Election and (y) the percentage of Taxes airing from such failure that are not allocated to SpinCo pursuant to Section 3, and (ii) the Parties shall negotiate in good faith the terms of a tax receivable agreement to govern the calculation of such payments; provided that any such tax saving in clause (i) shall be determined using a with and without methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any carryforwards). Notwithstanding the foregoing, ConAgra may, at its sole discretion, waive its right to receive any and all payments pursuant to this Section 10(b).
SECTION 11 . Indemnities .
(a) SpinCo Indemnity to ConAgra . SpinCo and each other member of the LW Group shall jointly and severally indemnify ConAgra and the other members of the ConAgra Group against, and hold them harmless, without duplication, from:
(i) any Tax liability allocated to SpinCo pursuant to Section 3;
(ii) any Tax liability and Tax-Related Losses attributable to a breach, after the Distribution Effective Time, by SpinCo or any other member of the LW Group of any representation or covenant contained in this Agreement.
(iii) any Distribution Taxes and Tax-Related Losses attributable to a SpinCo Disqualifying Action (including, for the avoidance of doubt, any Taxes and Tax-Related Losses resulting from any action for which the conditions set forth in Section 9(c) are satisfied); and
19
(iv) all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax liability or damage described in (i), (ii) or (iii), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage.
(b) ConAgra Indemnity to SpinCo . Except in the case of any liabilities described in Section 11(a ), ConAgra and each other member of the ConAgra Group will jointly and severally indemnify SpinCo and the other members of the LW Group against, and hold them harmless, without duplication, from:
(i) any Tax liability allocated to ConAgra pursuant to Section 3;
(ii) any Taxes imposed on any member of the LW Group under Treasury Regulations Section 1.1502-6 (or similar or analogous provision of state, local or foreign law) solely as a result of any such member being or having been a member of a Combined Group; and
(iii) all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax liability or damage described in (i) or (ii), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage;
(c) Discharge of Indemnity . SpinCo, ConAgra and the members of their respective Groups shall discharge their obligations under Section 11(a ) or Section 11(b ) hereof, respectively, by paying the relevant amount in accordance with Section 12, within 30 Business Days of demand therefor. Any such demand shall include a statement showing the amount due under Section 11(a ) or Section 11(b ), as the case may be. Notwithstanding the foregoing, if any member of the LW Group or any member of the ConAgra Group disputes in good faith the fact or the amount of its obligation under Section 11(a ) or Section 11(b ), then no payment of the amount in dispute shall be required until any such good faith dispute is resolved in accordance with Section 23 hereof; provided , however , that any amount not paid within 30 Business Days of demand therefor shall bear interest as provided in Section 12.
(d) Tax Benefits . If an indemnification obligation of any Indemnifying Party under this Section 11 arises in respect of an adjustment that makes allowable to an Indemnitee any Tax Benefit which would not, but for such adjustment, be allowable, then any such indemnification obligation shall be an amount equal to (i) the amount otherwise due but for this Section 11(d ), minus (ii) the reduction in actual cash Taxes payable by the Indemnitee in the taxable year such indemnification obligation arises and the two taxable years following such year, determined on a with and without basis.
20
SECTION 12 . Payments .
(a) Timing . All payments to be made under this Agreement (excluding, for the avoidance of doubt, any payments to a Taxing Authority described herein) shall be made in immediately available funds. Except as otherwise provided, all such payments will be due thirty (30) Business Days after the receipt of notice of such payment or, where no notice is required, thirty (30) Business Days after the fixing of liability or the resolution of a dispute (the Due Date ). Payments shall be deemed made when received. Any payment that is not made on or before the Due Date shall bear interest at the rate equal to the prime rate as published on such Due Date in the Wall Street Journal, Eastern Edition, for the period from and including the date immediately following the Due Date through and including the date of payment. With respect to any payment required to be made under this Agreement, ConAgra has the right to designate, by written notice to SpinCo, which member of the ConAgra Group will make or receive such payment.
(b) Treatment of Payments . To the extent permitted by Applicable Tax Law, any payment made by ConAgra or any member of the ConAgra Group to SpinCo or any member of the LW Group, or by SpinCo or any member of the LW Group to ConAgra or any member of the ConAgra Group, pursuant to this Agreement, the Separation Agreement or any other Transaction Document that relates to Taxable periods (or portions thereof) ending on or before the Distribution Date shall be treated by the parties hereto for all Tax purposes as a distribution by SpinCo to ConAgra, or a capital contribution from ConAgra to SpinCo, as the case may be; provided, however, that any payment made pursuant to Section 1.03 of the Separation Agreement shall instead be treated as if the party required to make a payment of received amounts had received such amounts as agent for the other party; provided further that any payment made pursuant to Sections 4.1, 4.3 or 4.4 of the Transition Services Agreement or Sections 4.1, 4.3 or 4.4 of the Reverse Transition Services Agreement shall instead be treated as a payment for services; provided further that any payment made pursuant to Sections 3.3, 3.5, 10.1, and 10.2 of the Lease shall instead be treated as a payment made by a lessee to a lessor; provided further that any payment made pursuant to Sections 1 or 4 of the Option shall instead be treated as a payment made by an optionee to an optionor. In the event that a Taxing Authority asserts that a partys treatment of a payment described in this Section 12(b ) should be other than as required herein, such party shall use its reasonable best efforts to contest such assertion in a manner consistent with Section 15 of this Agreement.
(c) No Duplicative Payment . It is intended that the provisions of this Agreement shall not result in a duplicative payment of any amount required to be paid under the Separation Agreement or any other Transaction Document, and this Agreement shall be construed accordingly.
SECTION 13 . Guarantees . ConAgra or SpinCo, as the case may be, shall guarantee or otherwise perform the obligations of each other member of the ConAgra Group or the LW Group, respectively, under this Agreement.
21
SECTION 14. Communication and Cooperation .
(a) Consult and Cooperate . ConAgra and SpinCo shall consult and cooperate (and shall cause each other member of their respective Groups to consult and cooperate) fully at such time and to the extent reasonably requested by the other party in connection with all matters subject to this Agreement. Such cooperation shall include, without limitation:
(i) the retention, and provision on reasonable request, of any and all information including all books, records, documentation or other information pertaining to Tax matters relating to the LW Group (or, in the case of any Tax Return of the ConAgra Group, the portion of such return that relates to Taxes for which the LW Group may be liable pursuant to this Agreement), any necessary explanations of information, and access to personnel, until one year after the expiration of the applicable statute of limitation (giving effect to any extension, waiver or mitigation thereof);
(ii) the execution of any document that may be necessary (including to give effect to Section 15) or helpful in connection with any required Tax Return or in connection with any audit, proceeding, suit or action; and
(iii) the use of the parties commercially reasonable efforts to obtain any documentation from a Governmental Authority or a third party that may be necessary or helpful in connection with the foregoing.
(b) Provide Information. Except as set forth in Section 15, ConAgra and SpinCo shall keep each other reasonably informed with respect to any material development relating to the matters subject to this Agreement.
(c) Tax Attribute Matters . ConAgra and SpinCo shall promptly advise each other with respect to any proposed Tax adjustments that are the subject of an audit or investigation, or are the subject of any proceeding or litigation, and that may affect any Tax liability or any Tax Attribute (including, but not limited to, basis in an asset or the amount of earnings and profits) of any member of the LW Group or any member of the ConAgra Group, respectively.
(d) Confidentiality and Privileged Information . Any information or documents provided under this Agreement shall be kept confidential by the party receiving the information or documents, except as may otherwise be necessary in connection with the filing of required Tax Returns or in connection with any audit, proceeding, suit or action. Without limiting the foregoing (and notwithstanding any other provision of this Agreement or any other agreement), (i) no member of the ConAgra Group or LW Group, respectively, shall be required to provide any member of the LW Group or ConAgra Group, respectively, or any other Person access to or copies of any information or procedures other than information or procedures that relate solely to SpinCo, the business or assets of any member of the LW Group, or matters for which SpinCo or ConAgra Group, respectively, has an obligation to indemnify under this Agreement, and (ii) in no event shall any member of the ConAgra Group or the LW Group, respectively, be required to provide any member of the LW Group or ConAgra Group, respectively, or any other Person access to or copies of any information if such action could reasonably be expected to result in the waiver of any privilege. Notwithstanding the foregoing, in the event that ConAgra or SpinCo, respectively, determines that the provision of any information to any member of the LW Group or ConAgra Group, respectively, could be commercially detrimental or violate any law or
22
agreement to which ConAgra or SpinCo, respectively, is bound, ConAgra or SpinCo, respectively, shall not be required to comply with the foregoing terms of this Section 14(d ) except to the extent that it is able, using commercially reasonable efforts, to do so while avoiding such harm or consequence (and shall promptly provide notice to ConAgra or SpinCo, to the extent such access to or copies of any information is provided to a Person other than a member of the ConAgra Group or LW Group (as applicable)).
SECTION 15. Audits and Contest .
(a) Notice . Each of ConAgra or SpinCo shall promptly notify the other in writing upon the receipt of any notice of Tax Proceeding from the relevant Taxing Authority that may affect the liability of any member of the LW Group or the ConAgra Group, respectively, for Taxes under Applicable Law or this Agreement; provided, that a partys right to indemnification under this Agreement shall not be limited in any way by a failure to so notify, except to the extent that the indemnifying party is prejudiced by such failure
(b) ConAgra Control . Notwithstanding anything in this Agreement to the contrary but subject to Section 15(d), ConAgra shall have the right to control all matters relating to any Tax Return, or any Tax Proceeding, with respect to any Tax matters of a Combined Group or any member of a Combined Group (as such). ConAgra shall have absolute discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to any Tax matter described in the preceding sentence; provided , however , that to the extent that any Tax Proceeding relating to such a Tax matter is reasonably likely to give rise to an indemnity obligation of SpinCo under Section 11 hereof, a) ConAgra shall keep SpinCo informed of all material developments and events relating to any such Tax Proceeding described in this proviso and b) at its own cost and expense, SpinCo shall have the right to participate in (but not to control) the defense of any such Tax Proceeding, provided that SpinCos rights with respect to any such Tax Proceeding occurring under CAP (a CAP Proceeding ) shall be limited to the information rights in clause (i) of the preceding proviso.
(c) SpinCo Assumption of Control; Non-Distribution Taxes . If ConAgra determines that the resolution of any matter pursuant to a Tax Proceeding (other than a Tax Proceeding relating to Distribution Taxes) is reasonably likely to have an adverse effect on the LW Group with respect to any Post-Distribution Period, ConAgra, in its sole discretion, may permit SpinCo to elect to assume control over disposition of such matter at SpinCos sole cost and expense; provided , however , that if SpinCo so elects, it will (i) be responsible for the payment of any liability arising from the disposition of such matter notwithstanding any other provision of this Agreement to the contrary and (ii) indemnify the ConAgra Group for any increase in a liability and any reduction of a Tax asset of the ConAgra Group arising from such matter.
(d) SpinCo Participation; Distribution Taxes . ConAgra shall have the right to control any Tax Proceeding relating to Distribution Taxes, provided that ConAgra shall keep SpinCo fully informed of all material developments and (i) if the Tax Proceeding is not a CAP Proceeding, shall permit SpinCo a reasonable opportunity to participate in the defense of the matter and (ii) if the Tax Proceeding is a CAP Proceeding, then (x) if such CAP Proceeding is reasonably likely to give rise to an indemnity obligation of SpinCo under Section 11 hereof, ConAgra shall permit SpinCo a reasonable opportunity to participate in the defense of the matter
23
solely with respect to the portion of the CAP Proceeding that relates to Distribution Taxes, and (y) for any CAP Proceeding not described in clause (x), SpinCos right to participate in the defense of the matter shall be limited to the right to comment in advance on any written submissions with respect to Distribution Taxes.
SECTION 16 . Notices. All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to have been duly given (a) when sent, if sent by telecopy, (b) when delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an international courier service and, in each case, addressed to a Company at the following address for such Company,
if to ConAgra or the ConAgra Group, to:
ConAgra Foods, Inc.
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Attention: Colleen Batcheler
Email: Colleen.Batcheler@conagrafoods.com
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attention: Neil Barr
Email: Neil.Barr@davispolk.com
if to SpinCo or the LW Group, to:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk Spytek
Email: Eryk.Spytek@conagrafoods.com
or to such other address(es) as may be furnished in writing by any such Company to the other Companies in accordance with the provisions of this Section 16 .
SECTION 17. Costs and Expenses . Except as expressly set forth in this Agreement, each party shall bear its own costs and expenses incurred pursuant to this Agreement. For purposes of this Agreement, costs and expenses shall include, but not be limited to, reasonable attorneys fees, accountants fees and other related professional fees and disbursements. For the avoidance of doubt, unless otherwise specifically provided in the Transaction Documents, all liabilities, costs and expenses incurred in connection with this Agreement by or on behalf of SpinCo or any member of the LW Group in any Pre-Distribution Period shall be the responsibility of ConAgra and shall be assumed in full by ConAgra.
24
SECTION 18. Effectiveness; Termination and Survival . Except as expressly set forth in this Agreement, as between ConAgra and SpinCo, this Agreement shall become effective upon the consummation of the Distribution. All rights and obligations arising hereunder shall survive until they are fully effectuated or performed; provided that, notwithstanding anything in this Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive for one year after the full period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated prior to the end of such period, until such claim has been satisfied or otherwise resolved. This agreement shall terminate without any further action at any time before the Distribution upon termination of the Separation Agreement.
SECTION 19. Specific Performance . Each party hereto agrees that irreparable damage would occur if any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties hereto will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement without proof of actual damages, this being in addition to any other remedy to which any such party is entitled at Law or in equity. Each party hereto further agrees that no other party or any other Person will be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 19 , and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
SECTION 20. Construction . The descriptive headings herein are inserted for convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. References to any document, instrument or agreement (including this Agreement) includes and incorporates all exhibits, disclosure letters, schedules and other attachments thereto. Unless the context otherwise requires, any references to a Section or Schedule will be to a Section or Schedule to or of this Agreement. The use of the words include or including in this Agreement will be deemed to be followed by the words without limitation. The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days means calendar days unless specified as Business Days. References to statutes will include all regulations promulgated thereunder, and references to statutes or regulations will be construed to include all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation as of the date hereof. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement or any other Transaction Document, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a party, such party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion, the parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
25
SECTION 21. Entire Agreement; Amendments and Waivers .
(a) Entire Agreement .
(i) This Agreement and the other Transaction Documents, including any related annexes, schedules and exhibits, as well as any other agreements and documents referred to herein and therein, together constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. If there is a conflict between any provision of this Agreement and a provision of any other Transaction Document, the provision of this Agreement will control unless specifically provided otherwise in this Agreement.
(ii) THE PARTIES ACKNOWLEDGE AND AGREE THAT NO REPRESENTATION, WARRANTY, PROMISE, INDUCEMENT, UNDERSTANDING, COVENANT OR AGREEMENT HAS BEEN MADE OR RELIED UPON BY ANY PARTY OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE OTHER TRANSACTION DOCUMENTS. WITHOUT LIMITING THE GENERALITY OF THE DISCLAIMER SET FORTH IN THE PRECEDING SENTENCE, NEITHER CONAGRA NOR ANY OF ITS AFFILIATES HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR WARRANTIES IN ANY PRESENTATION OR WRITTEN INFORMATION RELATING TO THE LW BUSINESS GIVEN OR TO BE GIVEN IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS OR IN ANY FILING MADE OR TO BE MADE BY OR ON BEHALF OF CONAGRA OR ANY OF ITS AFFILIATES WITH ANY GOVERNMENTAL AUTHORITY, AND NO STATEMENT MADE IN ANY SUCH PRESENTATION OR WRITTEN MATERIALS, MADE IN ANY SUCH FILING OR CONTAINED IN ANY SUCH OTHER INFORMATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE. SPINCO ACKNOWLEDGES THAT CONAGRA HAS INFORMED IT THAT NO PERSON HAS BEEN AUTHORIZED BY CONAGRA OR ANY OF ITS AFFILIATES TO MAKE ANY REPRESENTATION OR WARRANTY IN RESPECT OF THE LW BUSINESS OR IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS, UNLESS IN WRITING AND CONTAINED IN THIS AGREEMENT OR IN ANY OF THE OTHER TRANSACTION DOCUMENTS TO WHICH THEY ARE A PARTY.
(b) Amendments and Waivers .
(i) This Agreement may be amended, and any provision of this Agreement may be waived, if and only if such amendment or waiver, as the case may be, is in writing and signed, in the case of an amendment, by the parties or, in the case of a waiver, by the party against whom the waiver is to be effective.
(ii) No failure or delay by either party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of
26
any other right, power or privilege. Except as otherwise provided herein, no action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. Any term, covenant or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but only by a written notice signed by such party expressly waiving such term, covenant or condition. The waiver by any party of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder.
SECTION 22. Governing Law and Interpretation . The validity, interpretation and enforcement of this Agreement will be governed by the Laws of the State of Delaware, without regard to the conflict of Laws provisions thereof that would cause the Laws of another state to apply.
SECTION 23. Dispute Resolution . In the event of any dispute relating to this Agreement, the parties shall work together in good faith to resolve such dispute within thirty (30) days. In the event that such dispute is not resolved, upon written notice by a party after such thirty (30)-day period, the matter shall be referred to a U.S. Tax counsel or other Tax advisor of recognized national standing (the Tax Arbiter ) that will be jointly chosen by the ConAgra and SpinCo; provided , however , that, if the ConAgra and SpinCo do not agree on the selection of the Tax Arbiter after five (5) days of good faith negotiation, the Tax Arbiter shall consist of a panel of three U.S. Tax counsel or other Tax advisor of recognized national standing with one member chosen by the ConAgra, one member chosen by SpinCo, and a third member chosen by mutual agreement of the other members within the following ten (10)-day period. Each decision of a panel Tax Arbiter shall be made by majority vote of the members. The Tax Arbiter may, in its discretion, obtain the services of any third party necessary to assist it in resolving the dispute. The Tax Arbiter shall furnish written notice to the parties to the dispute of its resolution of the dispute as soon as practicable, but in any event no later than ninety (90) days after acceptance of the matter for resolution. Any such resolution by the Tax Arbiter shall be binding on the parties, and the parties shall take, or cause to be taken, any action necessary to implement such resolution. All fees and expenses of the Tax Arbiter shall be shared equally by the parties to the dispute. If the parties are unable to find a Tax Arbiter willing to adjudicate the dispute in question and whom the parties, acting in good faith, find acceptable, then the dispute shall be resolved in the manner set forth in Article 5 of the Separation Agreement .
SECTION 24. Counterparts . This Agreement may be executed in multiple counterparts (any one of which need not contain the signatures of more than one party), each of which will be deemed to be an original but all of which taken together will constitute one and the same agreement. This Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any party hereto, the other parties hereto will re-execute original forms thereof and deliver them to the requesting party.
27
SECTION 25. Successors and Assigns; Third Party Beneficiaries . Except as provided below, this Agreement shall be binding upon and shall inure only to the benefit of the parties hereto and their respective successors and assigns, by merger, acquisition of assets or otherwise (including but not limited to any successor of a party hereto succeeding to the Tax Attributes of such party under Applicable Tax Law). This Agreement is not intended to benefit any Person other than the parties hereto and such successors and assigns, and no such other Person shall be a third party beneficiary hereof. Upon the Distribution, this Agreement shall be binding on SpinCo and shall be subject to the obligations and restrictions imposed on SpinCo hereunder, including, without limitation, the indemnification obligations of SpinCo under Section 11.
SECTION 26. Authorization, Etc . Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party, and that the execution, delivery and performance of this Agreement by such party does not contravene or conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such party.
SECTION 27. Change in Tax Law . Any reference to a provision of the Code, Treasury Regulations or any other Applicable Tax Law shall include a reference to any applicable successor provision of the Code, Treasury Regulations or other Applicable Tax Law.
SECTION 28. Principles . This Agreement is intended to calculate and allocate certain Tax liabilities of the members of the LW Group and the members of the ConAgra Group to SpinCo and ConAgra (and their respective Groups), and any situation or circumstance concerning such calculation and allocation that is not specifically contemplated by this Agreement shall be dealt with in a manner consistent with the underlying principles of calculation and allocation in this Agreement.
[SIGNATURE PAGE FOLLOWS]
28
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and year first written above.
ConAgra on its own behalf and on behalf of the members of the ConAgra Group | ||
By: |
/s/ Colleen R. Batcheler | |
Name: |
Colleen R. Batcheler | |
Title: |
Executive Vice President, General Counsel and Corporate Secretary |
SpinCo on its own behalf and on behalf of the members of the LW Group | ||
LAMB WESTON HOLDINGS, INC. | ||
By: |
/s/ Thomas P. Werner | |
Name: |
Thomas P. Werner | |
Title: |
President and Chief Executive Officer |
SCHEDULE A
The following transactions occurring pursuant to the Internal Restructuring are hereby identified as being free from Tax to the extent set forth herein (the Internal Tax-Free Transactions ), any:
(A) the filing of elections under Treas. Reg. Sec. 301.7701-3 to treat the applicable entities as disregarded from their owners for U.S. federal income tax purposes in transactions intended to qualify as distributions of property in complete liquidation of a corporation pursuant to Section 332 of the Code;
(B) transfers to existing and newly-formed entities intended to qualify as transfers pursuant to Section 351 of the Code;
(C) a transfer and distribution, taken together, intended to qualify as a reorganization described in Section 368(a)(1)(D) of the Code;
(D) distributions intended to qualify as the distribution of the controlled corporation stock to the shareholders of the distributing corporation pursuant to Section 355 of the Code; and
(E) a transfer intended to qualify as a reorganization described in Section 368(a)(1)(F) of the Code.
1
SCHEDULE A
Existing GRAs means:
(i) the gain recognition agreement, in regards to Lamb Weston Netherlands BV, to be filed with ConAgra Foods, Inc. fiscal year 2017 federal income tax return upon the contribution by ConAgra Foods, Inc., to Lamb Weston International BV of 100% of the shares of Lamb Weston Netherlands BV and
(ii) the gain recognition agreement, in regards to ConAgra Foods Japan KK, filed with ConAgra Foods, Inc. fiscal year 2017 federal income tax return upon the contribution by ConAgra Foods, Inc. to Lamb Weston International BV of 100% of the shares of ConAgra Foods Japan KK.
2
Exhibit 10.2
EMPLOYEE MATTERS AGREEMENT
between
CONAGRA FOODS, INC.
and
LAMB WESTON HOLDINGS, INC.
Dated as of November 8, 2016
ARTICLE I DEFINITIONS | 1 | |||||||
Section 1.1 | Certain Defined Terms. | 1 | ||||||
Section 1.2 | Other Capitalized Terms. | 8 | ||||||
ARTICLE II GENERAL PRINCIPLES; EMPLOYEE TRANSFERS | 8 | |||||||
Section 2.1 | ConAgra Group Employee Liabilities. | 8 | ||||||
Section 2.2 | LW Group Employee Liabilities. | 9 | ||||||
Section 2.3 | ConAgra Plans/LW Plans. | 9 | ||||||
Section 2.4 | Employee Transfers. | 9 | ||||||
Section 2.5 | Collective Bargaining Agreements. | 10 | ||||||
ARTICLE III NON-U.S. EMPLOYEE TRANSFERS AND BENEFIT PLANS | 10 | |||||||
Section 3.1 | Non-U.S. Plans. | 10 | ||||||
Section 3.2 | Non-U.S. Employees. | 10 | ||||||
ARTICLE IV SERVICE CREDIT | 11 | |||||||
Section 4.1 | Service Credit for Employee Transfers. | 11 | ||||||
ARTICLE V LITIGATION AND COMPENSATION | 12 | |||||||
Section 5.1 | Employee-Related Litigation. | 12 | ||||||
Section 5.2 | Paid Leave. | 12 | ||||||
Section 5.3 | Annual Cash Incentives. | 12 | ||||||
Section 5.4 | Employment Agreements. | 12 | ||||||
ARTICLE VI CERTAIN WELFARE BENEFIT PLAN MATTERS | 13 | |||||||
Section 6.1 | LW Spinoff Welfare Plans. | 13 | ||||||
Section 6.2 | Continuation of Elections. | 14 | ||||||
Section 6.3 | Deductibles and Preexisting Conditions. | 14 | ||||||
Section 6.4 | Workers Compensation. | 14 | ||||||
Section 6.5 | COBRA. | 15 | ||||||
ARTICLE VII TAX-QUALIFIED DEFINED BENEFIT PLANS | 15 | |||||||
Section 7.1 | U.S. Pension Plans. | 15 | ||||||
Section 7.2 | Continuation of Elections. | 16 | ||||||
Section 7.3 | Multiemployer Plan. | 16 | ||||||
ARTICLE VIII U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS | 17 | |||||||
Section 8.1 | U.S. Savings Plans. | 17 | ||||||
Section 8.2 | Continuation of Elections. | 18 | ||||||
Section 8.3 | Contributions Due. | 19 |
-i-
ARTICLE IX NONQUALIFIED RETIREMENT PLANS | 19 | |||||||
Section 9.1 | LW Spinoff NQDC Plans. | 19 | ||||||
Section 9.2 | No Distributions on Separation | 20 | ||||||
Section 9.3 | Section 409A | 20 | ||||||
Section 9.4 | Continuation of Elections | 20 | ||||||
Section 9.5 | Delayed Transfer Employees | 20 | ||||||
ARTICLE X CONAGRA EQUITY AWARDS | 21 | |||||||
Section 10.1 | Outstanding ConAgra Equity Awards. | 21 | ||||||
Section 10.2 | Conformity with Non-U.S. Laws | 27 | ||||||
Section 10.3 | Tax Withholding and Reporting. | 27 | ||||||
Section 10.4 | Employment Treatment. | 27 | ||||||
Section 10.5 | Registration | 28 | ||||||
ARTICLE XI TRANSITION SERVICES, THIRD-PARTY CLAIMS | 28 | |||||||
Section 11.1 | General Principles | 28 | ||||||
Section 11.2 | Third-Party Claims | 28 | ||||||
ARTICLE XII INDEMNIFICATION | 28 | |||||||
Section 12.1 | Indemnification | 28 | ||||||
ARTICLE XIII COOPERATION | 29 | |||||||
Section 13.1 | Cooperation | 29 | ||||||
ARTICLE XIV MISCELLANEOUS | 29 | |||||||
Section 14.1 | Vendor Contracts | 29 | ||||||
Section 14.2 | Further Assurances | 29 | ||||||
Section 14.3 | Employment Taxes Withholding Reporting Responsibility | 30 | ||||||
Section 14.4 | Data Privacy | 30 | ||||||
Section 14.5 | Third Party Beneficiaries | 30 | ||||||
Section 14.6 | Effect if Distribution Does Not Occur | 30 | ||||||
Section 14.7 | Incorporation of Separation Agreement Provisions | 30 | ||||||
Section 14.8 | No Representation or Warranty | 31 |
-ii-
SCHEDULES AND EXHIBITS
Schedule 1.1 : LW Employee ConAgra Participants
Schedule 2.5 : Collective Bargaining Agreements
Schedule 5.3 : Annual Cash Incentive Exceptions
Schedule 5.4 : Employment Agreements Retained by ConAgra
Schedule 6.1(b) : ConAgra Welfare Plans
Schedule 7.1(a) : ConAgra Pension Plans
Schedule 8.1(a) : ConAgra 401(k) Plans
Schedule 9.1(a) : ConAgra NQDC Plan
Schedule 9.1(b) : NQDC Plan Transfer Exceptions
-iii-
EMPLOYEE MATTERS AGREEMENT
EMPLOYEE MATTERS AGREEMENT, dated as of November 8 , 2016 (this Employee Matters Agreement ), between ConAgra Foods, Inc., a Delaware corporation ( ConAgra ), and Lamb Weston Holdings, Inc., a Delaware corporation and a wholly owned Subsidiary of ConAgra ( SpinCo or Lamb Weston ).
RECITALS
A. The parties to this Employee Matters Agreement have entered into the Separation and Distribution Agreement (the Separation Agreement ), dated as of the date hereof, pursuant to which ConAgra intends to distribute to its stockholders, on a pro rata basis and without consideration, all the outstanding shares of common stock, par value $1.00 per share, of Lamb Weston then owned by ConAgra (the Distribution ).
B. The parties wish to set forth their agreements as to certain matters regarding the treatment of, and the compensation and employee benefits provided to, current and former employees of ConAgra and Lamb Weston and their Subsidiaries.
C. This Employee Matters Agreement incorporates by reference the agreement of the parties with regard to certain services to be performed by the parties following the Distribution, which agreement was originally set forth in the Transition Services Agreement, effective as of the date hereof.
AGREEMENT
In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms . For the purposes of this Employee Matters Agreement:
162(m) Award means a ConAgra Performance Share Award that was intended to be qualified performance-based compensation within the meaning of Section 162(m) of the Code and the applicable regulations thereunder.
2008 Performance Share Plan means the ConAgra Foods, Inc. 2008 Performance Share Plan.
Adjusted ConAgra 2015-2017 162(m) Performance Share Award means a performance share award with respect to ConAgra Common Stock relating to ConAgra Performance Share Awards relating to fiscal years 2015-2017 that is a 162(m) Award held by ConAgra Participants described in Section 10.1(a)(iii)(A)(3) .
-1-
Adjusted ConAgra 2015-2017 Non-162(m) Performance Share Award means a performance share award with respect to ConAgra Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2015-2017 that is not a 162(m) Award held by ConAgra Participants described in Section 10.1(a)(iii)(A)(1) .
Adjusted ConAgra 2016-2018 Performance Share Award means a performance share award with respect to ConAgra Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2016-2018 held by ConAgra Participants described in Section 10.1(a)(iii)(B) .
Adjusted ConAgra 2017-2019 Performance Share Award means a performance share award with respect to ConAgra Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2017-2019 held by ConAgra Participants described in Section 10.1(a)(iii)(B) .
Adjusted ConAgra Equity Award means each Adjusted ConAgra Option, Adjusted ConAgra RSU, and Adjusted ConAgra Performance Share Award.
Adjusted ConAgra Options means an option to acquire ConAgra Common Stock relating to a ConAgra Option described in Section 10.1(a)(i)(A) .
Adjusted ConAgra Performance Share Awards means each Adjusted ConAgra 2015-2017 162(m) Performance Share Award, Adjusted ConAgra 2015-2017 Non-162(m) Performance Share Award, Adjusted ConAgra 2016-2018 Performance Share Award, and Adjusted ConAgra 2017-2019 Performance Share Award.
Adjusted ConAgra RSUs means a restricted stock unit award with respect to ConAgra Common Stock relating to ConAgra RSUs described in Section 10.1(a)(ii)(A) .
Applicable Transfer Date means the date on which a Delayed Transfer Employee actually commences employment with the ConAgra Group or the LW Group (as applicable).
Benefit Plan means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees in the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any employee benefit plan (as defined in Section 3(3) of ERISA) sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no ConAgra Equity Award, nor any plan under which any such ConAgra Equity Award is granted, will constitute a Benefit Plan under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Benefit Plan for purposes hereof.
COBRA means the continuation coverage requirements under Code Section 4980B and ERISA Sections 601-608.
-2-
Code means the Internal Revenue Code of 1986, as amended.
Collective Bargaining Agreement means any collective bargaining agreement, labor agreement, pension or other written agreement to which ConAgra, SpinCo, or any of their respective direct or indirect Subsidiaries is a party to.
ConAgra 401(k) Plans has the meaning set forth in Section 8.1(a) .
ConAgra Annual Incentive Plans has the meaning set forth in Section 5.3 .
ConAgra Director means each individual who is a non-employee member of the ConAgra Board and is not a member of the Board of Directors of SpinCo, in each case, as of the close of business on the Distribution Date.
ConAgra Employee means each individual who, as of the close of business on the Distribution Date, is employed by a member of the ConAgra Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). ConAgra Employees also include ConAgra Transferees, effective as of the Applicable Transfer Date.
ConAgra Equity Award means each ConAgra Option, ConAgra RSU, and ConAgra Performance Share Award.
ConAgra Equity Plans means the ConAgra Foods 2006 Stock Plan, the ConAgra Foods 2009 Stock Plan, and the ConAgra Foods 2014 Stock Plan.
ConAgra Non-U.S. Plans means the Non-U.S. Plans sponsored or maintained by a member of the ConAgra Group.
ConAgra NQDC Plans has the meaning set forth in Section 9.1(a) .
ConAgra Options means an option to acquire shares of ConAgra Common Stock granted by ConAgra under a ConAgra Equity Plan prior to the Distribution Date.
ConAgra Participant means any ConAgra Employee, Former ConAgra Employee, Former LW Business Employee, or ConAgra Director who immediately prior to the Distribution holds ConAgra Equity Awards, or a beneficiary, dependent or alternate payee of such person and any LW Employee listed on Schedule 1.1 , or a beneficiary, dependent or alternate payee of such person.
ConAgra Pension Plans has the meaning set forth in Section 7.1(a) .
ConAgra Performance Share Awards means an award of performance shares with respect to shares of ConAgra Common Stock granted by ConAgra under a ConAgra Equity Plan prior to the Distribution Date.
ConAgra Plans means (i) the ConAgra Pension Plans, the ConAgra 401(k) Plans, the ConAgra Welfare Plans, and the ConAgra Retiree Welfare Plans, and (ii) any other Benefit Plan that, as of the close of business on the day before the Distribution Date, is sponsored or
-3-
maintained solely by any member of the ConAgra Group. For the avoidance of doubt, no member of the ConAgra Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to Lamb Weston any reimbursement in respect of such Benefit Plan.
ConAgra Retiree Welfare Plans has the meaning set forth in Section 6.1(a) .
ConAgra RSUs means a time-based restricted stock unit award granted by ConAgra under a ConAgra Equity Plan prior to the Distribution Date.
ConAgra Transferees means the Delayed Transfer Employees who transfer from the LW Group to the ConAgra Group.
ConAgra Welfare Plans has the meaning set forth in Section 6.1(b) .
Delayed Transfer Employee has the meaning set forth in Section 2.4(b) .
Distribution has the meaning set forth in the Recitals.
Employee Matters Agreement has the meaning set forth in the preamble.
Employment Agreement means any individual employment, retention, consulting, change in control, split dollar life insurance, sale bonus, incentive bonus, severance or other individual compensatory agreement between any current or former employee and ConAgra or any of its Affiliates.
EPS Goal has the meaning set forth in Section 10.1(a)(iii)(A)(3) .
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Former ConAgra Employee means any individual who (i) on or before the close of business on the Distribution Date retired or otherwise separated from service from ConAgra and its Affiliates, and (ii) is not a Former LW Business Employee.
Former LW Business Employee means any individual (a) who on or before the Distribution Date retired or otherwise separated from service from the ConAgra Group or the LW Group, and (b) (i) who immediately before his or her retirement or other separation from service with the ConAgra Group or the LW Group was substantially dedicated to the LW Business, or (ii) whose last day worked with the ConAgra Group or the LW Group was with the LW Business or a LW Entity.
Hourly LW Employees has the meaning set forth in Section 7.1(b) .
Human Resources Committee means the Human Resources Committee of the Board of Directors of ConAgra.
Joint Withdrawal Liability has the meaning set forth in Section 7.3 .
-4-
LW 2015-2017 Performance Share Award means a performance share award with respect to SpinCo Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2015-2017 held by LW Participants described in Section 10.1(a)(iii)(A)(2) .
LW 2016-2018 Performance Share Award means a performance share award with respect to SpinCo Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2016-2018 held by LW Participants described in Section 10.1(a)(iii)(C) .
LW 2017-2019 Performance Share Award means a performance share award with respect to SpinCo Common Stock relating to ConAgra Performance Share Awards with a performance period relating to fiscal years 2017-2019 held by LW Participants described in Section 10.1(a)(iii)(C) .
LW Annual Incentive Plans has the meaning set forth in Section 5.3 .
LW Contributions has the meaning set forth in Section 7.3 .
LW Director means each individual who, as of the close of business on the Distribution Date, is a non-employee member of the Board of Directors of SpinCo.
LW Employee means each individual who, as of the close of business on the Distribution Date, is employed by a LW Entity (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). LW Employees also include LW Transferees, effective as of the Applicable Transfer Date.
LW Employment Agreement has the meaning set forth in Section 5.4 .
LW Equity Award means each LW Option, LW RSU, and LW Performance Share Award.
LW Equity Plans has the meaning set forth in Section 10.1(c) .
LW Non-U.S. Plan means any Non-U.S. Plan sponsored or maintained by a member of the LW Group.
LW Options means an option to acquire SpinCo Common Stock relating to a ConAgra Option granted by Lamb Weston as of the Distribution under a LW Equity Plan pursuant to Section 10.1(a)(i)(B) .
LW Participant means any LW Employee or LW Director (other than any LW Employee listed on Schedule 1.1 who is a ConAgra Participant) who immediately prior to the Distribution holds ConAgra Equity Awards, or a beneficiary, dependent or alternate payee of such person.
-5-
LW Performance Share Awards means each LW 2015-2017 Performance Share Award, LW 2016-2018 Performance Share Award and LW 2017-2019 Performance Share Award.
LW Plans means (i) the LW Spinoff Pension Plans, the LW Spinoff 401(k) Plans, and the LW Spinoff Welfare Plans and (ii) any Benefit Plan sponsored or maintained by any member of the LW Group. For the avoidance of doubt, no member of the LW Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to ConAgra any reimbursement in respect of such Benefit Plan.
LW Retirees has the meaning set forth in Section 6.1(a) .
LW RSUs means restricted stock unit award with respect to SpinCo Common Stock granted by Lamb Weston as described in Section 10.1(a)(ii)(B) .
LW Share has the meaning set forth in Section 7.3 .
LW Share Price means the average of the volume weighted average price per share of SpinCo Common Stock on the NYSE (as traded on the regular way market), calculated to four decimal places (as reported by Bloomberg L.P. or any successor thereto) and determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours, on each of the five consecutive trading days starting with the first full trading date immediately following the Distribution Date.
LW Spinoff 401(k) Plan has the meaning set forth in Section 8.1(a) .
LW Spinoff NQDC Plans has the meaning set forth in Section 9.1(a) .
LW Spinoff Pension Plan has the meaning set forth in Section 7.1(b) .
LW Spinoff Welfare Plans has the meaning set forth in Section 6.1(b) .
LW Transferees means the Delayed Transfer Employees who transfer from the ConAgra Group to the LW Group.
LW Welfare Claims has the meaning set forth in Section 6.1(c) .
Measurement Date has the meaning set forth in Section 10.1(a)(iii)(A)(4) .
Multiemployer Plan has the meaning set forth in Section 7.3 .
Non-U.S. Delayed Transfer Employee has the meaning set forth in Section 2.4(b) .
Non-U.S. LW Employee means each LW Employee whose employment is based outside of the United States. Non-U.S. LW Employees also include Non-U.S. Delayed Transfer Employee who are LW Transferees, effective as of the Applicable Transfer Date.
-6-
Non-U.S. Plan means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees outside of the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no ConAgra Equity Award, nor any plan under which any such ConAgra Equity Award is granted, will constitute a Non-U.S. Plan under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Non-U.S. Plan for purposes hereof.
NYSE means the New York Stock Exchange.
Option Exercise Price means the pre-adjustment exercise price of the applicable ConAgra Option.
Plan Payee means, as to an individual who participates in a Benefit Plan, such individuals dependents, beneficiaries, alternate payees and alternate recipients, as applicable under such Benefit Plans.
Post-Distribution ConAgra Share Price means the average of the volume weighted average price per share of ConAgra Common Stock on NYSE (as traded on the regular way market), calculated to four decimal places (as reported by Bloomberg L.P. or any successor thereto) and determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours, on each of the five consecutive trading days starting with the first full trading date immediately following the Distribution Date.
Pre-Distribution Action means a Third-Party Claim with respect to a ConAgra Employee, Former ConAgra Employee, LW Employee, or Former LW Business Employee that arises from an act, omission, or event that occurred prior to the Distribution.
Pre-Distribution ConAgra Share Price means the average of the volume weighted average price per share of ConAgra Common Stock on NYSE (as traded on the regular way market), calculated to four decimal places (as reported by Bloomberg L.P. or any successor thereto) and determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours, on each of the five consecutive trading days ending with the second complete trading day immediately prior to the Distribution Date.
Separation Agreement has the meaning set forth in the Recitals.
Transferred Leave has the meaning set forth in Section 5.2 .
Vendor Contract has the meaning set forth in Section 14.1 .
Welfare Plan means each Benefit Plan that provides life insurance, health care, dental care, vision care, employee assistance programs (EAP), accidental death and dismemberment insurance, disability, severance, vacation, dependent care reimbursements, or other group welfare or fringe benefits or is otherwise an employee welfare benefit plan as described in Section 3(1) of ERISA.
-7-
Section 1.2 Other Capitalized Terms . Capitalized terms not defined in this Employee Matters Agreement, including the following, will have the meanings ascribed to them in the Separation Agreement:
| Action |
| Affiliate |
| ConAgra Board |
| ConAgra Common Stock |
| ConAgra Group |
| Distribution Date |
| Excluded Liabilities |
| Governmental Authority |
| Joint Venture Interests |
| Law |
| Liability |
| LW Business |
| LW Entities |
| LW Group |
| LW Joint Ventures |
| LW Liabilities |
| Person |
| SpinCo Common Stock |
| Subsidiary |
| Tax |
| Tax Sharing Agreement |
| Third-Party Claim |
| Transaction Documents |
| Transition Services Agreement |
ARTICLE II
GENERAL PRINCIPLES; EMPLOYEE TRANSFERS
Section 2.1 ConAgra Group Employee Liabilities . Except as specifically provided in this Employee Matters Agreement, the ConAgra Group will be solely responsible for (a) all employment, compensation and employee benefits Liabilities relating to ConAgra Employees and Former ConAgra Employees, (b) all Liabilities arising under each ConAgra Plan, and (c) any other Liabilities expressly assigned or allocated to a member of the ConAgra Group under this Employee Matters Agreement.
-8-
Section 2.2 LW Group Employee Liabilities . Except as specifically provided in this Employee Matters Agreement, the LW Group will be solely responsible for (a) all employment, compensation and employee benefits Liabilities relating to LW Employees and Former LW Business Employees, (b) all Liabilities arising under each LW Plan, and (c) any other Liabilities expressly assigned or allocated to a member of the LW Group under this Employee Matters Agreement.
Section 2.3 ConAgra Plans/LW Plans .
(a) Except as otherwise provided herein or in the Transition Services Agreement, effective as of the Distribution Date, the ConAgra Group will be exclusively responsible for administering each ConAgra Plan and ConAgra Non-U.S. Plan in accordance with its terms and for all obligations and Liabilities with respect to, and all benefits owed to participants in, the ConAgra Plans and the ConAgra Non-U.S. Plans, whether arising before, on or after the Distribution Date.
(b) Except as otherwise provided herein or in the Transition Services Agreement, effective as of the Distribution Date the LW Group will be exclusively responsible for administering each LW Plan and LW Non-U.S. Plan in accordance with its terms and for all obligations and Liabilities with respect to, and all benefits owed to participants in, the LW Plans and the LW Non-U.S. Plans, whether arising before, on or after the Distribution Date.
Section 2.4 Employee Transfers .
(a) Except with respect to Delayed Transfer Employees, ConAgra will or will cause employees of the ConAgra Group who are designated by ConAgra to transfer employment to Lamb Weston or the appropriate member of the LW Group prior to the Distribution Date.
(b) The following employees will be Delayed Transfer Employees for purposes of this Employee Matters Agreement: (i) upon mutual agreement of ConAgra and Lamb Weston, any employee whose employment transfers within six months after the Distribution Date from the ConAgra Group to the LW Group or from the LW Group to the ConAgra Group because such employee was inadvertently and erroneously treated as employed by the wrong employer on the Distribution Date and who was continuously employed by a member of the ConAgra Group or the LW Group (as applicable) from the Distribution Date through the date such employee commences employment with a member of the ConAgra Group or LW Group (as applicable) and (ii) any employee identified by ConAgra prior to the Distribution Date whose employment transfers within six months after the Distribution Date from the ConAgra Group to the LW Group or from the LW Group to the ConAgra Group because such employees transfer prior to the Distribution Date could not be completed (such employees described in clause (ii) also Non-U.S. Delayed Transfer Employees ); provided , however , that no employee of either Group who is covered by a Collective Bargaining Agreement at the time such employee transfers to the other Group will be a Delayed Transfer Employee. Notwithstanding anything herein to the contrary, no employee will be considered a Delayed Transfer Employee unless the Applicable Transfer Date of any Delayed Transfer Employee occurs on or before the date that is six months after the Distribution Date.
-9-
Section 2.5 Collective Bargaining Agreements . Effective as of the Distribution Date, (i) ConAgra or a member of the ConAgra Group will retain each Collective Bargaining Agreement then in effect covering any ConAgra Employee and will retain all liabilities arising prior to the Distribution Date and assume all liabilities arising after the Distribution Date under each such Collective Bargaining Agreement and (ii) Lamb Weston or a member of the LW Group will retain or assume each Collective Bargaining Agreement then in effect covering any LW Employee including, but not limited to, the Collective Bargaining Agreements set forth on Schedule 2.5 and will retain all liabilities arising prior to the Distribution Date and assume all liabilities arising after the Distribution Date under each such Collective Bargaining Agreement.
ARTICLE III
NON-U.S. EMPLOYEE TRANSFERS AND BENEFIT PLANS
Section 3.1 Non-U.S. Plans . Except as otherwise provided in the Transition Services Agreement, effective as of the Distribution Date, (i) ConAgra or a member of the ConAgra Group will retain each ConAgra Non-U.S. Plan and (ii) Lamb Weston or a member of the LW Group will retain or assume each LW Non-U.S. Plan. To the extent that the applicable Law of any jurisdiction requires that all or a portion of any ConAgra Non-U.S. Plan be assumed or retained by a member of the LW Group in connection with the transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Transaction Documents, Lamb Weston will cause the LW Group to assume or retain such ConAgra Non-U.S. Plans.
Section 3.2 Non-U.S. Employees . Notwithstanding anything to the contrary contained in this Employee Matters Agreement, except as otherwise provided in the Transition Services Agreement, any employee who is employed by a member of the ConAgra Group in a non-US jurisdiction immediately prior to the Distribution, and who is required by applicable Law to transfer to a member of the LW Group in connection with the transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Transaction Documents, will transfer automatically on the Distribution Date to SpinCo or a member of the LW Group in accordance with such applicable Law and will be deemed to be a LW Employee and a Non-U.S. LW Employee for purposes of this Employee Matters Agreement. Notwithstanding anything to the contrary herein, the following terms will apply to all Non-U.S. LW Employees:
(a) To the extent that (i) the applicable Law of any jurisdiction, (ii) any applicable Collective Bargaining Agreement or other applicable agreement with a works council or economic committee, or (iii) any applicable employment agreement would require SpinCo or its Affiliates (including a member of the LW Group) to provide any terms of employment to any Non-U.S. LW Employee that are more favorable than those otherwise provided for in this Employee Matters Agreement in connection with the Distribution of the LW Business to SpinCo, then SpinCo will cause the LW Group to
-10-
provide such Non-U.S. LW Employee with such more favorable terms. SpinCo will be responsible for liabilities for, and will cause the LW Group to provide all compensation or benefits (whether statutory, contractual or otherwise) to each Non-U.S. LW Employee arising from or related to the transactions contemplated by this Employee Matters Agreement, the Separation Agreement, or the other Transaction Documents, or the related transfer of the employee to SpinCo or a member of the LW Group.
(b) ConAgra and SpinCo agree that to the extent provided under the applicable Laws of certain foreign jurisdictions, (i) any employment agreements between ConAgra and its Affiliates, on the one hand, and any Non-U.S. LW Employee, on the other hand, and (ii) any Collective Bargaining Agreements applicable to the Non-U.S. LW Employees in such jurisdictions, will in each case have effect after the Distribution as if originally made between the LW Group and the other parties to such employment agreement or Collective Bargaining Agreement.
ARTICLE IV
SERVICE CREDIT
Section 4.1 Service Credit for Employee Transfers . Subject to the terms of any applicable Collective Bargaining Agreement, the Benefit Plans will provide the following service crediting rules effective as of the Distribution Date:
(a) From and after the Distribution Date Lamb Weston will, and will cause its Affiliates (including the members of the LW Group) and successors to, provide credit under the LW Plans to each LW Employee for service with the ConAgra Group (including, prior to the Distribution, the LW Group) prior to the Distribution Date for purposes of eligibility, vesting, and benefit accrual under the appropriate LW Plans in which the LW Employee is otherwise eligible, subject to the terms of those plans; provided , however , that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both the ConAgra Plans and the LW Plans.
(b) A Delayed Transfer Employees service with the ConAgra Group or the LW Group (as applicable) following the Distribution will be recognized for purposes of eligibility, vesting and benefit accrual under the appropriate ConAgra Plans or LW Plans as appropriate in which they are otherwise eligible, subject to the terms of those plans; provided , however , that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both the ConAgra Plans and the LW Plans.
(c) Except as provided in Section 4.1(b) , with respect to an employee hired by the ConAgra Group or the LW Group after the Distribution Date, the Benefit Plans of the ConAgra Group for employees hired by the ConAgra Group or the LW Group for employees hired by the LW Group will not recognize such employees service with the LW Group for employees hired by the ConAgra Group or the ConAgra Group for employees hired by the LW Group unless required by Law or an applicable Collective Bargaining Agreement.
-11-
ARTICLE V
LITIGATION AND COMPENSATION
Section 5.1 Employee-Related Litigation . Notwithstanding any provision of this Employee Matters Agreement to the contrary, Liability with respect to any Pre-Distribution Action: (a) will be a LW Liability under the Separation Agreement to the extent asserted by, or arising from or relating primarily to the employment of, LW Employee(s) and/or Former LW Business Employee(s); and (b) will be an Excluded Liability under the Separation Agreement to the extent asserted by, or arising from or relating primarily to the employment of, ConAgra Employee(s) and/or Former ConAgra Employee(s). For the avoidance of doubt, a Pre-Distribution Action will be subject to Article IV of the Separation Agreement.
Section 5.2 Paid Leave . Subject to the terms of any applicable Collective Bargaining Agreement and except to the extent not permitted by applicable Law, ConAgra and SpinCo will cause the LW Group to credit each LW Employee with the amount of accrued and unpaid hours of paid leave, which may include, but is not limited to, vacation, personal days, occasional days, floating holidays and sick leave (together, the Transferred Leave ) applicable to such LW Employee as of the Distribution Date, or the Applicable Transfer Date. Subject to the terms of any applicable Collective Bargaining Agreement and except to the extent not permitted by applicable Law, the ConAgra Group will retain responsibility for accrued but unpaid hours of paid leave, which may include, but is not limited to, vacation, personal days, occasional days, floating holidays and sick leave attributable to ConAgra Employees as of the Distribution Date, or the Applicable Transfer Date. Notwithstanding the foregoing, in any jurisdiction where payment of the value of accrued but unused paid leave to LW Employees is required by applicable Law as of the Distribution Date (a) ConAgra will pay, or cause to be paid, all Transferred Leave as soon as reasonably practicable after the Distribution Date and (b) Lamb Weston will promptly, but in no event more than 30 days after being notified by ConAgra, reimburse ConAgra in respect of such payment.
Section 5.3 Annual Cash Incentives . The ConAgra Group maintains annual incentive plans for eligible employees of the ConAgra Group (such plans, the ConAgra Annual Incentive Plans ), and the LW Group maintains annual incentive plans for eligible employees of the LW Group (such plans, the LW Annual Incentive Plans ). The ConAgra Group will be responsible for any payments owed under the ConAgra Annual Incentive Plans and the LW Group will be responsible for any payments owed under the LW Annual Incentive Plans, provided that, except as set forth on Schedule 5.3 , if any LW Employees or Former LW Business Employees are owed amounts under the ConAgra Annual Incentive Plan for fiscal year 2017, the LW Group will pay and be responsible for such payments and if any ConAgra Employees or Former ConAgra Employees are owed amounts under the LW Annual Incentive Plans for fiscal year 2017, the ConAgra Group will pay and be responsible for such payments.
Section 5.4 Employment Agreements . Effective as of the Distribution, Lamb Weston or a member of the LW Group will assume and be solely responsible for any Employment Agreement to which a LW Employee or a Former LW Business Employee is
-12-
a party other than the agreements set forth on Schedule 5.4 (each, a LW Employment Agreement ) and the ConAgra Group will have no liabilities with respect thereto. Notwithstanding any provision to the contrary, (a) the LW Employment Agreements will be the responsibility of one or more members of the LW Group following the Distribution Date; and (b) ConAgra will retain and be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, any Employment Agreement that is not a LW Employment Agreement.
ARTICLE VI
CERTAIN WELFARE BENEFIT PLAN MATTERS
Section 6.1 LW Spinoff Welfare Plans .
(a) The ConAgra Group and the ConAgra Plans that are Welfare Plans providing retiree medical benefits to Former LW Business Employees and Former ConAgra Employees (such plans, the ConAgra Retiree Welfare Plans ) will retain responsibility for providing retiree medical benefits to Former LW Business Employees who, as of the Distribution Date, are enrolled in the retiree medical benefits of the ConAgra Retiree Welfare Plans or are eligible and have elected to participate in the retiree medical benefits of the ConAgra Retiree Welfare Plans ( LW Retirees ), and the ConAgra Group and ConAgra Retiree Welfare Plans will remain responsible for all claims incurred by such LW Retirees under the ConAgra Retiree Welfare Plans (whether incurred before, on, or after the Distribution Date). The ConAgra Group and the ConAgra Retiree Welfare Plans will retain responsibility for providing the applicable benefits under the ConAgra Retiree Welfare Plans to Former ConAgra Employees and ConAgra Employees.
(b) Except as otherwise provided in the Transition Services Agreement, effective not later than the Distribution Date, Lamb Weston or a member of the LW Group will establish certain plans that are group health or welfare benefit plans (such plans, the LW Spinoff Welfare Plans ), which have terms and features (including benefit coverage options, employer contribution provisions, but excluding retiree medical benefits) that are substantially similar to the corresponding ConAgra Plans listed on Schedule 6.1(b) , (such ConAgra Plans, the ConAgra Welfare Plans ) such that (for the avoidance of doubt) each ConAgra Welfare Plan is substantially replicated by a corresponding LW Spinoff Welfare Plan. Except as set forth in the Transition Services Agreement, from and after the Distribution Date or Applicable Transfer Date, Lamb Weston will cause each LW Spinoff Welfare Plan to cover those LW Employees and their Plan Payees who immediately prior to the Distribution Date or Applicable Transfer Date were participating in, or entitled to present or future benefits under, the corresponding ConAgra Welfare Plan.
(c) Except as otherwise provided in the Transition Services Agreement and Section 6.1(a) , the LW Group and the LW Spinoff Welfare Plans will be solely responsible for all claims incurred by LW Employees, Former LW Business Employees and their Plan Payees under the LW Spinoff Welfare Plans and ConAgra Welfare Plans ( LW Welfare Claims ) before, on and after the Distribution Date or Applicable Transfer
-13-
Date, but only to the extent such claims are not otherwise payable under an insurance policy held by the ConAgra Group. To the extent any LW Welfare Claims are payable under an insurance policy held by the ConAgra Group, ConAgra will take all commercially reasonable actions necessary to process such claim and obtain payment under the applicable insurance policy. Effective as of the Distribution Date or Applicable Transfer Date, ConAgra will cause LW Employees and their Plan Payees to cease to be covered by the ConAgra Welfare Plans, except as otherwise provided in the Transition Services Agreement. The ConAgra Group and the ConAgra Welfare Plans will remain solely responsible for all claims incurred by ConAgra Employees, Former ConAgra Employees and their Plan Payees, whether incurred before, on, or after the Distribution Date.
(d) For purposes of this Section 6.1 , a claim will be deemed incurred on the date that the event that gives rise to the claim occurs (for purposes of life insurance, severance, sickness, accident and disability programs) or on the date that treatment or services are provided (for purposes of health care programs).
Section 6.2 Continuation of Elections . Except as otherwise provided in the Transition Services Agreement, as of the Distribution Date, or Applicable Transfer Date, Lamb Weston will cause the LW Spinoff Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child support orders and other orders issued by courts of competent jurisdiction) in effect with respect to the LW Employees and Former LW Business Employees prior to the effective date of the LW Spinoff Welfare Plans or, if later, the Applicable Transfer Date, under the corresponding ConAgra Welfare Plans, to the extent such elections and designations and orders are applicable to such LW Spinoff Welfare Plan, and apply and maintain in force comparable elections and designations and orders under the LW Spinoff Welfare Plans for the remainder of the period or periods for which such elections or designations are by their original terms effective.
Section 6.3 Deductibles and Preexisting Conditions . Except as otherwise provided in the Transition Services Agreement, as of the Distribution Date, or Applicable Transfer Date, Lamb Weston will cause the LW Spinoff Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to LW Employees under the corresponding ConAgra Welfare Plan during the plan year in which the effective date of the LW Spinoff Welfare Plans occurs or, if later, the Applicable Transfer Date occurs, and the LW Spinoff Welfare Plans will not impose any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding ConAgra Welfare Plan prior to the effective date of the LW Spinoff Welfare Plans or, if later, the Applicable Transfer Date.
Section 6.4 Workers Compensation . The LW Group will be solely responsible (or cause the applicable member of the LW Group to assume and be solely responsible) for all claims for workers compensation benefits and will assume any related workers compensation Liabilities, in each case, with respect to each LW Employee and Former LW Business Employee whether arising before, at or after the Distribution; provided ,
-14-
however , that if applicable Law does not permit the LW Group to provide such benefits with respect to injuries or illnesses that arose prior to the Distribution Date, ConAgra will be responsible for providing such benefits and Lamb Weston will promptly, but in no event more than 30 days after being notified by ConAgra, reimburse ConAgra in respect of any such benefits provided and indemnify ConAgra and its Affiliates for all Liabilities incurred in connection with the administration of such benefits. The ConAgra Group will be solely responsible for all workers compensation benefits with respect to ConAgra Employees and Former ConAgra Employees, regardless of when such claims arose.
Section 6.5 COBRA . Except as otherwise provided in the Transition Services Agreement, effective as of the Distribution Date or Applicable Transfer Date, Lamb Weston or a member of the LW Group will assume or will cause the LW Spinoff Welfare Plans to assume sole responsibility for compliance with COBRA after the Distribution Date or Applicable Transfer Date for all LW Employees, Former LW Business Employees (other than LW Retirees) and their qualified beneficiaries for whom a qualifying event occurs before, on or after the Distribution Date or the Applicable Transfer Date; provided , however , that ConAgra or a member of the ConAgra Group will be responsible for furnishing any election notice required under COBRA to any LW Transferee. ConAgra, the ConAgra Group, or a ConAgra Welfare Plan will remain solely responsible for compliance with COBRA before, on and after the Distribution Date or Applicable Transfer Date for all ConAgra Employees, Former ConAgra Employees, LW Retirees and their qualified beneficiaries; provided , however , that Lamb Weston or a member of the LW Group will be responsible for furnishing any election notice required under COBRA to any ConAgra Transferee. The terms qualified beneficiaries and qualifying event will have the meanings given to them under Code Section 4980B and ERISA Sections 601-608. For the avoidance of doubt, Section 6.1 will govern whether the LW Spinoff Welfare Plans or ConAgra Welfare Plans are responsible for claims incurred by LW Employees, Former LW Business Employees or their qualified beneficiaries, while receiving continuation coverage under COBRA.
ARTICLE VII
TAX-QUALIFIED DEFINED BENEFIT PLANS
Section 7.1 U.S. Pension Plans .
(a) From and after the Distribution Date, ConAgra and the ConAgra Group will retain all assets and Liabilities under the Benefit Plans that are defined benefit plans listed on Schedule 7.1(a) (the ConAgra Pension Plans ). Effective as of the Distribution Date, each LW Employee will cease active participation in, and each LW Employees service and benefit accruals will cease accruing under, the ConAgra Pension Plans.
(b) Effective as of the Distribution Date, the LW Group has established and adopted a defined benefit plan that is intended to qualify under Code Section 401(a), along with a related master trust that is exempt under Code Section 501(a) (such plan and trust, collectively, the LW Spinoff Pension Plan ) under which each LW Employee who is a production-based employee and paid on an hourly basis (whether or
-15-
not covered by one or more of the Collective Bargaining Agreements, but excluding corporate support staff who are paid on an hourly basis) (the Hourly LW Employees ) will (i) receive credit for his or her service with any member of the ConAgra Group and any of their respective predecessors and (ii) will be provided benefits and other terms and conditions regarding vesting, eligibility to participate, and receipt of benefits that are the same as those contained in the applicable ConAgra Pension Plans such that, in each case, (x) the benefit received by each such Hourly LW Employee covered by a Collective Bargaining Agreement will be no less favorable than the benefit required to be provided to such Hourly LW Employee under the terms of such Collective Bargaining Agreement and (y) the benefit received by each such Hourly LW Employee, when added together with the benefit received by such Hourly LW Employee under the applicable ConAgra Pension Plan, will be no less favorable than the benefit such Hourly LW Employee would have become entitled to receive under the terms of the applicable ConAgra Pension Plan had such Hourly LW Employee remained employed by a member of the ConAgra Group and received his or her entire pension benefit under the applicable ConAgra Pension Plan as in effect on the Distribution Date. Except as set forth in the Transition Services Agreement, Lamb Weston or a member of the LW Group is solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the LW Spinoff Pension Plan to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the LW Spinoff Pension Plan so that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt under Section 501(a) of the Code.
(c) From and after the Distribution Date, ConAgra and the members of the ConAgra Group are solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the ConAgra Pension Plans, whether accrued before, on or after the Distribution Date and Lamb Weston and the members of the LW Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the LW Spinoff Pension Plan. Nothing in this Employee Matters Agreement prohibits the ConAgra Group or the LW Group from amending or terminating the ConAgra Pension Plans or the LW Spinoff Pension Plans, respectively, at any time. The LW Group may change or discontinue the benefits described in Section 7.1(b) at any time after the Distribution Date, subject to their collective bargaining obligations.
Section 7.2 Continuation of Elections . As of the Distribution Date, Lamb Weston (acting directly or through a member of the LW Group) will cause the LW Spinoff Pension Plan to recognize and maintain all existing elections, including beneficiary designations, payment form elections and rights of alternate payees under qualified domestic relations orders with respect to the Hourly LW Employees and their respective Plan Payees under the corresponding ConAgra Pension Plan.
Section 7.3 Multiemployer Plan . If any member of the ConAgra Group incurs liability due to a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from The Western Conference of Teamsters Pension Plan (the Multiemployer Plan ) and such withdrawal liability assessed against any member of the ConAgra Group by the Multiemployer Plan (such aggregate withdrawal liability, the Joint
-16-
Withdrawal Liability ) is calculated (in full or in part) using contributions made to the Multiemployer Plan on behalf of hours worked by LW Employees or Former LW Business Employees ( LW Contributions ), the LW Group will be responsible for and liable for the LW Share of such Joint Withdrawal Liability. The LW Share shall mean the Joint Withdrawal Liability multiplied by a fraction, (a) the numerator of which is the LW Contributions used to calculate the Joint Withdrawal Liability and (b) the denominator of which is the total contributions to the Multiemployer Plan used to calculate the Joint Withdrawal Liability. For the avoidance of doubt, the LW Share will be a LW Liability. If the Joint Withdrawal Liability is determined using the direct attribution method under Section 4211(c)(4) of ERISA, then this Section 7.3 will be applied by (i) replacing each reference to the contributions made to the Multiemployer Plan on behalf of hours worked by with the unfunded vested benefits attributable to and (ii) replacing each reference to total contributions to the Multiemployer Plan with total unfunded vested benefits.
ARTICLE VIII
U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS
Section 8.1 U.S. Savings Plans .
(a) Except as otherwise provided in the Transition Services Agreement, effective as of the Distribution Date, Lamb Weston or another member of the LW Group will adopt and establish a defined contribution plan that is intended to qualify under Code Section 401(a), and a related master trust or trusts exempt under Code Section 501(a) (such plan and trust, the LW Spinoff 401(k) Plan ), which will have terms and features (including employer contribution provisions) that are substantially similar to the terms and features of the ConAgra Plans that are defined contribution plans intended to qualify under Section 401(a) of the Code listed on Schedule 8.1(a) (such ConAgra Plans, the ConAgra 401(k) Plans ) such that (for the avoidance of doubt) each ConAgra 401(k) Plan is substantially replicated by the LW Spinoff 401(k) Plan. From and after the Distribution Date except as otherwise provided in the Transition Services Agreement, Lamb Weston will, or will cause a member of the LW Group to, cause the LW Spinoff 401(k) Plan to cover any LW Employee and Former LW Business Employee who, as of immediately prior to the Distribution Date, participates in or has an account under a ConAgra 401(k) Plan. Except as set forth in the Transition Services Agreement, Lamb Weston or a member of the LW Group will be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the LW Spinoff 401(k) Plan to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the LW Spinoff 401(k) Plan so that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt under Section 501(a) of the Code. The LW Spinoff 401(k) Plan will assume liability for all benefits accrued or earned (whether or not vested) by LW Employees and Former LW Business Employees under the corresponding ConAgra 401(k) Plan as of immediately prior to the effective date of the LW Spinoff 401(k) Plan or, if later, the Applicable Transfer Date.
-17-
(b) On or as soon as reasonably practicable following the effective date of the LW Spinoff 401(k) Plan or, if later, the Applicable Transfer Date (but not later than 30 days thereafter), ConAgra or another member of the ConAgra Group will cause each ConAgra 401(k) Plan to transfer to the LW Spinoff 401(k) Plan, and Lamb Weston or another member of the LW Group will cause the LW Spinoff 401(k) Plan to accept the transfer of, the accounts (including unvested account balances), related liabilities and related assets in such ConAgra 401(k) Plans attributable to LW Employees and Former LW Business Employees and their respective Plan Payees. The transfer of assets will be in cash or in kind (as determined by the transferor) and include outstanding loan balances and amounts forfeited by Former LW Business Employees that have not yet been reallocated or applied to the payment of contributions or expenses and be conducted in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA. Lamb Weston or a member of the LW Group will be responsible for reimbursing ConAgra or a member of the ConAgra Group for any portion of the unvested account balances transferred to the LW Spinoff 401(k) Plan from a ConAgra 401(k) Plan that are forfeited by a LW Employee after such transfer.
(c) Except as otherwise provided in the Transition Services Agreement, on or as soon as reasonably practicable following the Applicable Transfer Date (but not later than 30 days thereafter), Lamb Weston or a member of the LW Group will cause the accounts (including unvested account balances), related liabilities, and related assets in the LW Spinoff 401(k) Plan attributable to any ConAgra Transferees and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in-kind (as determined by the transferor) in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA to the applicable ConAgra 401(k) Plan(s). ConAgra or another member of the ConAgra Group will cause the applicable ConAgra 401(k) Plan(s) to accept such transfer of accounts, liabilities and assets.
(d) From and after the Distribution Date, except as specifically provided in paragraph (c) above, Lamb Weston and the LW Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the LW Spinoff 401(k) Plan, whether accrued before, on or after the Distribution Date. For the avoidance of doubt, except as otherwise provided in the Transition Services Agreement, the LW Spinoff 401(k) Plan will, to the extent required by Law and the terms of the LW Spinoff 401(k) Plan, have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the LW Group and whose employment with ConAgra or any of its Affiliates, or a member of the ConAgra Group, terminated on or before the Distribution Date at a time when such individuals benefits under the applicable ConAgra 401(k) Plan(s) were not fully vested. Furthermore, except as otherwise provided in the Transition Services Agreement, the LW Spinoff 401(k) Plan will have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the LW Business to the extent required by applicable Law.
Section 8.2 Continuation of Elections . As of the effective date of the LW Spinoff 401(k) Plan or, if later, the Applicable Transfer Date, Lamb Weston (acting
-18-
directly or through a member of the LW Group) will cause the LW Spinoff 401(k) Plan to recognize and maintain all elections, including investment elections that remain applicable after the Distribution and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to LW Employees and Former LW Business Employees and their respective Plan Payees under the corresponding ConAgra 401(k) Plan.
Section 8.3 Contributions Due . All amounts payable to the ConAgra 401(k) Plans with respect to employee deferrals, matching contributions and employer contributions for LW Employees relating to a time period ending on or prior to the Distribution Date, determined in accordance with the terms and provisions of the applicable ConAgra 401(k) Plan, ERISA and the Code, will be paid by ConAgra or another member of the ConAgra Group to the appropriate ConAgra 401(k) Plan prior to the date of any asset transfer described in Section 8.1(b) .
ARTICLE IX
NONQUALIFIED RETIREMENT PLANS
Section 9.1 LW Spinoff NQDC Plans .
(a) Except as otherwise provided in the Transition Services Agreement, effective as of the Distribution Date, Lamb Weston or another member of the LW Group will establish for the benefit of the LW Employees, Former LW Business Employees and LW Directors a nonqualified deferred compensation plan or plans (such plan or plans, the LW Spinoff NQDC Plans ). The LW Spinoff NQDC Plans will have terms and features (including employer contribution provisions) that are substantially similar to the ConAgra Benefit Plans that are nonqualified deferred compensation plans listed on Schedule 9.1(a) (such plans, the ConAgra NQDC Plans ) such that (for the avoidance of doubt), the ConAgra NQDC Plans are substantially replicated by the LW Spinoff NQDC Plans. Except as otherwise provided in the Transition Services Agreement, Lamb Weston or a member of the LW Group will be solely responsible for taking all necessary, reasonable, and appropriate actions to establish, maintain and administer the LW Spinoff NQDC Plans so that it does not result in adverse Tax consequences under Code Section 409A. Except as set forth on Schedule 9.1(b) , the LW Spinoff NQDC Plans will assume liability for all benefits accrued or earned (whether or not vested) by LW Employees, Former LW Business Employees, LW Directors and their respective Plan Payees under the ConAgra NQDC Plans as of immediately prior to the effective date of the LW Spinoff NQDC Plans or, if later, the Applicable Transfer Date. From and after the Distribution Date, Lamb Weston and the LW Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the LW Spinoff NQDC Plans, whether accrued before, on or after the Distribution Date. Furthermore, except as permitted in the Transition Services Agreement, Lamb Weston and the LW Group will have the sole obligation to restore in the LW Spinoff NQDC Plans benefits under the ConAgra NQDC Plans attributable to any lost participants who were formerly employed in the LW Business.
-19-
(b) Except as set forth on Schedule 9.1(b) , effective as of the effective date of the LW Spinoff NQDC Plans, ConAgra shall take, or cause a member of ConAgra Group or LW Group to have taken, all action necessary and appropriate to transfer to the LW Group, for the LW Groups sole use and benefit in complying with its obligations under this Article IX, any and all amounts set aside, in a rabbi trust with respect to the benefits of LW Employees, Former LW Business Employees and LW Directors under the ConAgra NQDC Plans and such amounts will be used only with respect to LW Employees, Former LW Business Employees and LW Directors.
(c) From and after the Distribution Date, ConAgra and the ConAgra Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the nonqualified retirement plans sponsored or maintained by a member of the ConAgra Group (including, but not limited to, the ConAgra NQDC Plans) to the extent such obligations and liabilities are not specifically assumed by a member of the LW Group or the LW Spinoff NQDC Plans pursuant to Section 9.1(a) .
Section 9.2 No Distributions on Separation . ConAgra and Lamb Weston acknowledge that neither the Distribution nor any of the other transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Transaction Documents will trigger a payment or distribution of compensation under any Benefit Plan that is a nonqualified retirement plan for any ConAgra Employee, LW Employee, Former ConAgra Employee, Former LW Business Employee, ConAgra Director or LW Director and, consequently, that the payment or distribution of any compensation to which any ConAgra Employee, LW Employee, Former ConAgra Employee, Former LW Business Employee, ConAgra Director or LW Directors is entitled under any such Benefit Plan will occur upon such individuals separation from service from the ConAgra Group or the LW Group, as applicable, or at such other time as specified in the applicable Benefit Plan.
Section 9.3 Section 409A . ConAgra and Lamb Weston will cooperate in good faith so that neither the Distribution nor any of the transfers contemplated by this Article IX will result in adverse Tax consequences under Code Section 409A to any current or former employee or director of any member of the ConAgra Group or any member of the LW Group, or their respective Plan Payees, in respect of his or her benefits under any ConAgra Plan or LW Plan.
Section 9.4 Continuation of Elections . As of the effective date of the LW Spinoff NQDC Plans or, if later, the Applicable Transfer Date and as permitted by Code Section 409A, Lamb Weston (acting directly or through a member of the LW Group) will cause the LW Spinoff NQDC Plans to recognize and maintain existing elections, including deferral, payment form elections, and valid (pursuant to the judgment of ConAgra) beneficiary designations with respect to the LW Employees, Former LW Business Employees and LW Directors under the ConAgra NQDC Plans, as applicable.
Section 9.5 Delayed Transfer Employees . Any LW Transferee will be treated in the same manner as a LW Employee under this Article IX, except that such LW
-20-
Transferee may experience a separation from service (within the meaning of Code Section 409A) on his or her Applicable Transfer Date. In addition, the ConAgra Group will assume and be solely responsible, pursuant to the terms of the ConAgra NQDC Plans, for any benefits accrued by any ConAgra Transferee under the LW Spinoff NQDC Plans, and the LW Group will have no liability with respect thereto.
ARTICLE X
CONAGRA EQUITY AWARDS
Section 10.1 Outstanding ConAgra Equity Awards .
(a) Each ConAgra Equity Award that is outstanding as of the Distribution will be adjusted as described below, so that each ConAgra Equity Award held by a ConAgra Participant will be adjusted to be an Adjusted ConAgra Equity Award, and each ConAgra Equity Award held by a LW Participant will be adjusted and converted into a LW Equity Award, in each case, unless otherwise provided in this Section 10.1(a) ; provided , however , that, effective immediately prior to the Distribution, the Human Resources Committee (or such other committee of the ConAgra Board authorized by the ConAgra Board or such other delegate as authorized by the Human Resources Committee or such other committee) may provide for different adjustments with respect to some or all of a holders ConAgra Equity Awards. For greater certainty, any adjustments made by the Human Resources Committee (or such other committee of the ConAgra Board authorized by the ConAgra Board or such other delegate as authorized by the Human Resources Committee or such other committee) will be deemed incorporated by reference herein as if fully set forth below and will be binding on the parties hereto and their respective Subsidiaries.
(i) Each ConAgra Option generally will be adjusted in the manner described below, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustments provisions of the applicable ConAgra Equity Plan, so that immediately following the Distribution each ConAgra Option holder who is a ConAgra Participant will hold Adjusted ConAgra Options, and each ConAgra Option holder who is a LW Participant will hold LW Options, in each case, in lieu of the ConAgra Options previously held. The following procedure will generally be applied to each ConAgra Option with the same grant date and exercise price held by each ConAgra Option holder as of the Distribution Date:
(A) Each Adjusted ConAgra Option will have an exercise price equal to the product (rounded up to the nearest cent) of (1) the applicable Option Exercise Price multiplied by (2) a fraction, (a) the numerator of which is the Post-Distribution ConAgra Share Price and (b) the denominator of which is the Pre-Distribution ConAgra Share Price. The number of shares of ConAgra Common Stock subject to the Adjusted ConAgra Options will be equal to the product (rounded down to the nearest whole share) of (1) the number of shares subject to the ConAgra Option held by such
-21-
ConAgra Participant immediately prior to the Distribution Date and (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the Post-Distribution ConAgra Share Price. Such Adjusted ConAgra Options will be subject to the same vesting requirements and dates and other terms and conditions as the ConAgra Options to which they relate.
(B) Each LW Option will have an exercise price equal to the product (rounded up to the nearest cent) of (1) the applicable Option Exercise Price multiplied by (2) a fraction, (a) the numerator of which is the LW Share Price and (b) the denominator of which is the Pre-Distribution ConAgra Share Price. The number of shares of SpinCo Common Stock subject to the LW Options will be equal the product (rounded down to the nearest whole share) of (1) the number of shares subject to the ConAgra Option held by such LW Participant immediately prior to the Distribution Date and (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the LW Share Price. Each LW Option will be subject to the same vesting requirements and other terms and conditions as the ConAgra Option to which it relates.
(ii) With respect to ConAgra RSUs:
(A) ConAgra RSUs held by each ConAgra Participant will be adjusted, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustments provisions of the applicable ConAgra Equity Plan, and will be subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to such ConAgra RSUs immediately prior to the Distribution Date ( Adjusted ConAgra RSUs ). The number of shares of ConAgra Common Stock subject to the Adjusted ConAgra RSUs will be equal to the product (rounded down to the nearest whole share) of (1) the number of shares of ConAgra Common Stock subject to the ConAgra RSU held by the ConAgra Participant immediately prior to the Distribution Date and (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the Post-Distribution ConAgra Share Price.
(B) ConAgra RSUs held by each LW Participant will, effective as of the Distribution Date and immediately prior to the Distribution, be adjusted and converted into an award of LW RSUs. Pursuant to the adjustments provisions of the applicable ConAgra Equity Plan, the award of LW RSUs will be subject to substantially the same terms, vesting conditions and other restrictions, if any,
-22-
that were applicable to such adjusted ConAgra RSUs immediately prior to the Distribution Date. The number of shares of SpinCo Common Stock subject to such LW RSUs for each such LW Participant will be equal to the product (rounded down to the nearest whole share) of (1) the number of shares of ConAgra Common Stock subject to such ConAgra RSUs held by such LW Participant immediately prior to the Distribution Date and (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the LW Share Price.
(iii) Each ConAgra Performance Share Award generally will be adjusted in the manner described below, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustments provisions of the applicable ConAgra Equity Plan, so that immediately following the Distribution each ConAgra Performance Share Award holder who is a ConAgra Participant will hold Adjusted ConAgra Performance Share Awards, and each ConAgra Performance Share Award holder who is a LW Participant will hold LW Performance Share Awards, in each case, in lieu of the ConAgra Performance Share Awards previously held.
(A) The following procedure will be applied to each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017, effective as of the Distribution Date and immediately prior to the Distribution:
(1) Each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017 that is not a 162(m) Award held by a ConAgra Participant shall be adjusted into a new performance share award, with respect to the number of shares of ConAgra Common Stock (rounded down to the nearest whole share) determined by multiplying (1) the earned number of shares of ConAgra Common Stock subject to such ConAgra Performance Share Award (as determined pursuant to Section 10.1(a)(iii)(A)(4) below) by (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the Post-Distribution ConAgra Share Price (each, an Adjusted ConAgra 2015-2017 Non-162(m) Performance Share Award ). Such Adjusted ConAgra 2015-2017 Non-162(m) Performance Share Award shall be subject to the same vesting requirements and dates and other terms and conditions as the ConAgra Performance Shares to which they relate, provided that the vesting criteria applicable to such Adjusted ConAgra 2015-2017 Non-162(m) Performance Share Award shall be adjusted to provide for solely service-based vesting.
-23-
(2) Each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017 held by a LW Participant shall be adjusted and converted to a grant of LW Performance Share Awards by SpinCo, with respect to the number of shares of SpinCo Common Stock (rounded down to the nearest whole share) determined by multiplying (1) the earned number of shares of ConAgra Common Stock subject to such ConAgra Performance Share Award (as determined pursuant to Section 10.1(a)(iii)(A)(4) below) by (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the LW Share Price (each, an LW 2015-2017 Performance Share Award ). Such LW 2015-2017 Performance Share Award shall be subject to the same vesting requirements and dates and other terms and conditions as the ConAgra Performance Shares to which they relate, provided that the vesting criteria applicable to such LW 2015-2017 Performance Share Award shall be adjusted to provide for solely service-based vesting.
(3) Each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017 that is a 162(m) Award held by a ConAgra Participant shall be adjusted into a new performance share award with respect to the number of shares of ConAgra Common Stock (rounded down to the nearest whole share) determined by multiplying (1) the earned number of shares of ConAgra Common Stock subject to such ConAgra Performance Share Award (as determined pursuant to Section 10.1(a)(iii)(A)(4) below) by (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the Post-Distribution ConAgra Share Price (each, an Adjusted ConAgra 2015-2017 162(m) Performance Share Award ). Such Adjusted ConAgra 2015-2017 162(m) Performance Share Award shall be subject to the same vesting requirements and dates and other terms and conditions as the ConAgra Performance Shares to which they relate, provided
-24-
that the vesting of such award shall remain subject to the achievement of the threshold earnings per share (EPS) performance goal (the EPS Goal ), but the other vesting criteria applicable to such Adjusted ConAgra 2015-2017 162(m) Performance Share Award shall be adjusted to provide for solely service-based vesting.
(4) The determination of whether any portion of a ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017 has been earned shall be based upon the actual achievement of such ConAgra performance objectives (which, for such Performance Share Awards that are 162(m) Awards are the applicable underlying pre-established performance objectives and not the EPS Goal) measured as of the end of the last fiscal period ending prior to the Distribution Date (the Measurement Date ). Such determination will be made by the Human Resources Committee in accordance with the applicable ConAgra Equity Plan, and the 2008 Performance Share Plan. Any portion of a ConAgra Performance Share Award with a performance period relating to fiscal years 2015 to 2017 that has not been earned as of the Measurement Date will be cancelled and forfeited.
(B) Each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2016-2018 or fiscal years 2017-2019 held by a ConAgra Participant shall be adjusted to cover the number of shares of ConAgra Common Stock (rounded down to the nearest whole share) determined by multiplying (1) the target number of shares of ConAgra Common Stock subject to such ConAgra Performance Share Award by (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the Post-Distribution ConAgra Share Price (each, an Adjusted ConAgra 2016-2018 Performance Share Award or Adjusted ConAgra 2017-2019 Performance Share Award , as applicable). Such Adjusted ConAgra 2016-2018 Performance Share Awards and Adjusted ConAgra 2017-2019 Performance Share Awards shall have the same terms and conditions (including performance-based vesting conditions or requirements) as were applicable under the corresponding ConAgra Performance Share Awards.
(C) Each outstanding ConAgra Performance Share Award with a performance period relating to fiscal years 2016-2018
-25-
or fiscal years 2017-2019 held by a LW Participant shall be adjusted and converted to a grant of LW Performance Share Awards by SpinCo (rounded down to the nearest whole share) determined by multiplying (1) the target number of shares of ConAgra Common Stock subject to such ConAgra Performance Share Award by (2) a fraction, (a) the numerator of which is the Pre-Distribution ConAgra Share Price and (b) the denominator of which is the LW Share Price (each, a LW 2016-2018 Performance Share Award or LW 2017-2019 Performance Share Award , as applicable). Such LW 2016-2018 Performance Share Awards and LW 2017-2019 Performance Share Awards shall have the same terms and conditions (including performance-based vesting conditions or requirements) as were applicable under the corresponding ConAgra Performance Share Awards.
(b) If an Adjusted ConAgra Equity Award or LW Equity Award is subject to accelerated vesting in connection with a change in control, a change in control will be deemed to have occurred (i) with respect to an Adjusted ConAgra Equity Award, only upon a change in control of ConAgra (as defined in the applicable equity incentive plan or award agreement) and (ii) with respect to a LW Equity Award, only upon a change in control of Lamb Weston (as defined in the applicable equity incentive plan or award agreement). Notwithstanding the foregoing, this Section 10.1(b) will not apply to the extent that it would cause adverse tax consequences under Code Section 409A.
(c) Prior to the Distribution Date, Lamb Weston will establish equity compensation plans, so that upon the Distribution, Lamb Weston will have in effect an equity compensation plan that allows grants of equity compensation awards subject to substantially the same terms as those that apply to the corresponding ConAgra Equity Awards (the LW Equity Plans ). From and after the Distribution Date, each LW Equity Award will be subject to the terms of the applicable Lamb Weston equity compensation plan, the award agreement governing such LW Equity Award and any Employment Agreement to which the applicable holder is a party. From and after the Distribution Date, Lamb Weston will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the LW Equity Awards and ConAgra will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the Adjusted ConAgra Equity Awards.
(d) In all events, the adjustments provided for in this Section 10.1 will be made in a manner that, as determined by ConAgra, avoids adverse Tax consequences to holders under Code Section 409A.
(e) For purposes of this Section 10.1 , each Non-U.S. Delayed Transfer Employee who will be a LW Transferee shall be treated as a LW Participant as of the Distribution and each Non-U.S. Delayed Transfer Employee who will be a ConAgra Transferee shall be treated as a ConAgra Participant as of the Distribution so that any outstanding ConAgra Equity Award held by such Non-U.S. Delayed Transfer Employee as of the Distribution will be adjusted as provided in this Section 10.1 at the same time as any other LW Participant or ConAgra Participant.
-26-
Section 10.2 Conformity with Non-U.S. Laws . Notwithstanding anything to the contrary in this Employee Matters Agreement, (a) to the extent any of the provisions in this Article X (or any equity award described herein) do not conform with applicable non-U.S. laws (including provisions for the collection of withholding taxes), such provisions shall be modified to the extent necessary to conform with such non-U.S. laws in such manner as is equitable and to preserve the intent hereof, as determined by the parties in good faith, and (b) the provisions of this Article X may be modified to the extent necessary to avoid undue cost or administrative burden arising out of the application of this Article X to awards subject to non-U.S. laws.
Section 10.3 Tax Withholding and Reporting .
(a) Except as otherwise required by applicable non-U.S. law, the appropriate member of the ConAgra Group will be responsible for all payroll taxes, withholding and reporting with respect to Adjusted ConAgra Equity Awards held by ConAgra Employees and Former ConAgra Employees. Except as otherwise required by applicable non-U.S. law, the appropriate member of the LW Group will be responsible for all payroll taxes, withholding and reporting with respect to LW Equity Awards held by LW Employees and Former LW Business Employees.
(b) If ConAgra or Lamb Weston determines in its reasonable judgment that any action required under this Article X will not achieve the intended tax, accounting and legal results, including, without limitation, the intended results under Code Section 409A or FASB ASC Topic 718 Stock Compensation, then at the request of ConAgra or Lamb Weston, as applicable, ConAgra or Lamb Weston will mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally-intended results are not fully attainable.
(c) Tax deductions with respect to ConAgra Equity Awards and LW Equity Awards will be allocated in accordance with the Tax Sharing Agreement, dated November 8, 2016, by and between ConAgra and SpinCo.
Section 10.4 Employment Treatment .
(a) Continuous employment with the LW Group and the ConAgra Group following the Distribution Date will be deemed to be continuing service for purposes of vesting and exercisability for the LW Equity Awards and the Adjusted ConAgra Equity Awards. However, in the event that a LW Employee terminates employment after the Distribution Date and becomes employed by the ConAgra Group, for purposes of Article X, the LW Employee will be deemed terminated and the terms and conditions of the applicable equity incentive plan under which grants were made will apply. Similarly, in the event that a ConAgra Employee terminates employment after the Distribution Date and becomes employed by the LW Group, for purposes of Article X, the ConAgra Employee will be deemed terminated and the terms and conditions of
-27-
the equity incentive plan under which grants were made will apply. Notwithstanding the foregoing, for purposes of this Article X only, if an individual is a Delayed Transfer Employee, such individual will not be considered to have terminated on his or her Applicable Transfer Date, provided such treatment does not result in adverse Tax consequences under Code Section 409A. In addition, ConAgra Directors and LW Directors will be treated in a similar manner to that described in this Section 10.4(a) .
(b) If, after the Distribution Date, ConAgra or SpinCo identifies an administrative error in the individuals identified as holding Adjusted ConAgra Equity Awards or LW Equity Awards, the amount of such awards so held, the vesting level of such awards, or any other similar error, ConAgra or SpinCo will mutually cooperate in taking such actions as are necessary or appropriate to place, as nearly as reasonably practicable, the individual and ConAgra or SpinCo in the position in which they would have been had the error not occurred.
Section 10.5 Registration . SpinCo will register the shares of SpinCo Common Stock relating to the LW Equity Awards and make any necessary filings with the appropriate Governmental Authorities as required under U.S. and foreign securities Laws.
ARTICLE XI
TRANSITION SERVICES, THIRD-
PARTY CLAIMS
Section 11.1 General Principles . From and after the Distribution Date, any services that a member of the LW Group will provide to the members of the ConAgra Group or that a member of the ConAgra Group will provide to the members of the LW Group relating to any Benefit Plans will be set forth in the Transition Services Agreement (and, to the extent provided therein, a member of the LW Group or the ConAgra Group will provide administrative services referred to in this Employee Matters Agreement).
Section 11.2 Third-Party Claims . Any Third-Party Claim relating to the matters addressed in this Employee Matters Agreement shall be governed by the applicable provisions of the Separation Agreement.
ARTICLE XII
INDEMNIFICATION
Section 12.1 Indemnification . All Liabilities assumed by or allocated to SpinCo or the LW Group pursuant to this Employee Matters Agreement will be deemed to be LW Liabilities for purposes of the Separation Agreement, and all Liabilities retained or assumed by or allocated to ConAgra or the ConAgra Group pursuant to this Employee Matters Agreement will be deemed to be Excluded Liabilities for purposes of the Separation Agreement. All such LW Liabilities and Excluded Liabilities shall be governed by the applicable indemnification terms of the Separation Agreement.
-28-
ARTICLE XIII
COOPERATION
Section 13.1 Cooperation . Following the date of this Employee Matters Agreement, ConAgra and Lamb Weston will, and will cause their respective Subsidiaries, agents and vendors to, use reasonable best efforts to cooperate with respect to any employee compensation, benefits or human resources systems matters that ConAgra and Lamb Weston, as applicable, reasonably determines require the cooperation of both ConAgra and Lamb Weston in order to accomplish the objectives of this Employee Matters Agreement. Without limiting the generality of the preceding sentence, (a) ConAgra and Lamb Weston will cooperate in coordinating each of their respective payroll systems in connection with the transfers of LW Employees to the LW Group and the Distribution, (b) ConAgra will, and will cause its Subsidiaries to, transfer records to Lamb Weston as reasonably necessary for the proper administration of the LW Benefit Plans, to the extent such records are in ConAgras possession, (c) ConAgra and Lamb Weston will share, with each other and with their respective agents and vendors (without obtaining releases unless otherwise required by applicable Law), all employee, participant and beneficiary information necessary for the efficient and accurate administration of the Benefit Plans and Non-U.S. Plans, and (d) ConAgra and Lamb Weston will share such information as is necessary to administer equity awards pursuant to Article X, to provide any required information to holders of such equity awards, and to make any governmental filings with respect thereto.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Vendor Contracts . Prior to the Distribution, ConAgra and Lamb Weston will use reasonable best efforts to (a) negotiate with the current third-party providers to separate and assign the applicable rights and obligations under each group insurance policy, health maintenance organization, administrative services contract, third-party administrator agreement, letter of understanding or arrangement that pertains to one or more ConAgra Plan and one or more LW Plans (each, a Vendor Contract ) to the extent that such rights or obligations pertain to LW Employees and Former LW Business Employees and their respective Plan Payees or, in the alternative, to negotiate with the current third-party providers to provide substantially similar services to the LW Plans on substantially similar terms under separate contracts with Lamb Weston or the LW Plans and (b) to the extent permitted by the applicable third-party provider, obtain and maintain pricing discounts or other preferential terms under the Vendor Contracts.
Section 14.2 Further Assurances . Prior to the Distribution, if either party identifies any commercial or other service that is needed to ensure a smooth and orderly transition of its business in connection with the consummation of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Employee Matters Agreement, the parties will cooperate in determining whether there is a mutually acceptable arms-length basis on which the other party will provide such service.
-29-
Section 14.3 Employment Taxes Withholding Reporting Responsibility . ConAgra and Lamb Weston hereby agree to follow the standard procedure for United States employment Tax withholding as provided in Section 4 of Rev. Proc. 2004-53, I.R.B. 2004-34. ConAgra will withhold and remit all employment taxes for the last payroll date preceding the Distribution Date with respect to all current and former employees of ConAgra (or a member of the ConAgra Group) and Lamb Weston (or a member of the LW Group) who receive wages on such payroll date.
Section 14.4 Data Privacy . The parties agree that any applicable data privacy Laws and any other obligations of the ConAgra Group and the LW Group to maintain the confidentiality of any employee information or information held by any benefit plans in accordance with applicable Law will govern the disclosure of employee information among the parties under this Employee Matters Agreement. The ConAgra Group and the LW Group will ensure that they each have in place appropriate technical and organizational security measures to protect the personal data of the ConAgra Employees, Former ConAgra Employees, LW Employees and Former LW Business Employees.
Section 14.5 Third-Party Beneficiaries . Nothing contained in this Employee Matters Agreement will be construed to create any third-party beneficiary rights in any Person, including without limitation any ConAgra Employees, Former ConAgra Employees, LW Employees and Former LW Business Employees (including any dependent or beneficiary thereof) nor will this Employee Matters Agreement be deemed to amend any benefit plan of ConAgra, Lamb Weston, or their Affiliates or to prohibit ConAgra, Lamb Weston or their respective Affiliates from amending or terminating any benefit plan.
Section 14.6 Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are, under this Employee Matters Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution will not be taken or occur except to the extent specifically agreed by the parties.
Section 14.7 Incorporation of Separation Agreement Provisions . The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions will apply as if fully set forth herein (references in this Section 14.7 to an Article or Section will mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein by reference will be references to the Separation Agreement): Section 3.01 (relating to Further Assurances; Efforts to Obtain Consents); Section 3.03 (relating to Access to Information; Cooperation); Section 3.04 (relating to Confidentiality); Sections 3.06 and 3.08 (relating to Privileged Matters and Joint Defense, respectively); Article IV (relating to Indemnification; Limitation of Liability); Article V (relating to Dispute Resolution); and Article VI (relating to Miscellaneous). For the avoidance of doubt, this Agreement does not relate to or cover the LW Joint Ventures (including with respect to the current or former employees, directors or other service providers of the LW Joint Ventures).
-30-
Section 14.8 No Representation or Warranty . Each of ConAgra (on behalf of itself and each member of the ConAgra Group) and Lamb Weston (on behalf of itself and each member of the LW Group) understands and agrees that, except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or in any other Transaction Document, no party (including its Affiliates) to this Employee Matters Agreement, the Separation Agreement or any other Transaction Document, makes any representation or warranty with respect to any matter in this Employee Matters Agreement, including, without limitation, any representation or warranty with respect to the legal or Tax status or compliance of any Benefit Plan or Non-U.S. Plan, compensation arrangement or Employment Agreement, and ConAgra disclaims any and all liability with respect thereto. Except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or any other Transaction Document, none of ConAgra, Lamb Weston or any of their respective Subsidiaries (including their respective Affiliates) makes any representation or warranty about and will not have any Liability for the accuracy of or omissions from any information, documents or materials made available in connection with entering into this Employee Matters Agreement, the Separation Agreement or any other Transaction Documents or the transactions contemplated hereby or thereby.
-31-
IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed on the date first written above by their respective duly authorized officers.
CONAGRA FOODS, INC. | ||||
By: |
/s/ Colleen R. Batcheler |
|||
Name: | Colleen R. Batcheler | |||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
LAMB WESTON HOLDINGS, INC. | ||||
By: |
/s/ Thomas P. Werner |
|||
Name: | Thomas P. Werner | |||
Title: | President and Chief Executive Officer |
Schedule 1.1
LW Employee ConAgra Participants
1. John F. Gehring
Schedule 2.5
Collective Bargaining Agreements
As of the Distribution Date, the following Collective Bargaining Agreements apply to the LW Employees or Former LW Business Employees:
1. | Labor Agreement between Lamb-Weston, Inc., American Falls, Idaho and International Brotherhood of Teamsters Local Union No. 983 (January 4, 2016 through January 6, 2019). |
2. | Labor Agreement between ConAgra Foods, Lamb Weston, Pasco, Washington and Teamsters Local Union No. 839 (June 30, 2014 through July 2, 2017). |
3. | Collective Bargaining Agreement between Lamb Weston (and ConAgra Foods), Connell, Washington and International Union of Operating Engineers, Local Union No. 280 (August 8, 2016 through August 12, 2018). |
4. | Collective Bargaining Agreement between ConAgra Foods, Lamb Weston, Quincy, Washington and Teamsters Local Union No. 760 (June 1, 2016 to May 31, 2019). |
5. | Collective Agreement between ConAgra, Limited Lamb-Weston Division, Taber, Alberta, Canada and United Steelworkers, Local Union 1-207 (March 16, 2014 to March 17, 2017). |
6. | Tentative Agreement between ConAgra Foods, Lamb Westin Delhi, Louisiana and UFCW Local No. 455 (June 2, 2013 through June 3, 2017). |
-2-
Schedule 5.3
Annual Cash Incentive Exceptions
1. | Prior to the Distribution Date, John F. Gehring will continue to participate in the ConAgra Foods, Inc. FY17 Management Incentive Plan (the ConAgra MIP). Mr. Gehrings ConAgra MIP award shall be pro-rated based on the number of days employed with ConAgra during FY17 through the Distribution. Mr. Gehrings ConAgra MIP award, if earned, shall be payable by ConAgra at the time other ConAgra MIP awards are paid for other eligible participants. On and after the Distribution Date, Mr. Gehring will be eligible to participate in the Lamb Weston FY17 Management Incentive Plan (the Lamb Weston MIP). Mr. Gehrings Lamb Weston MIP award shall be based on the number of days employed with Lamb Weston on and after the Distribution Date, if earned, will be payable by Lamb Weston, and shall be subject to all other terms of the Lamb Weston MIP. |
-3-
Schedule 5.4
Employment Agreements Retained by ConAgra
1. | Interim Position and Non-Compete Agreement, entered into on September 27, 2016, by and between ConAgra Foods, Inc. and John F. Gehring. |
-4-
Schedule 6.1(b)
ConAgra Welfare Plans
1. | All health and welfare benefits offered under the ConAgra Foods, Inc. Welfare Benefit Wrap Plan. |
-5-
Schedule 7.1(a)
ConAgra Pension Plans
1. | The ConAgra Foods, Inc. Pension Plan for Salaried Employees. |
2. | The ConAgra Foods, Inc. Pension Plan for Hourly Rate Production Employees. |
-6-
Schedule 8.1(a)
ConAgra 401(k) Plans
1. | The ConAgra Foods Retirement Income Savings Plan. |
2. | The ConAgra Foods Retirement Income Savings Plan for Hourly Rated Production Employees. |
-7-
Schedule 9.1(a)
ConAgra NQDC Plans
1. | The ConAgra Foods, Inc. Amended and Restated Voluntary Deferred Compensation Plan. |
2. | The ConAgra Foods, Inc. Directors Deferred Compensation Plan. |
3. | The ConAgra Foods, Inc. Nonqualified Pension Plan |
-8-
Schedule 9.1(b)
NQDC Plan Transfer Exceptions
1. | The liabilities associated with (and any assets set aside to fund the obligations under) John F. Gehrings accounts and accrued benefits under the ConAgra Foods, Inc. Amended and Restated Non-Qualified CRISP Plan, the ConAgra Foods, Inc. Amended and Restated Voluntary Deferred Compensation Plan, and the ConAgra Foods, Inc. Nonqualified Pension Plan will not be transferred to Lamb Weston or any nonqualified deferred compensation plan of Lamb Weston. |
-9-
Exhibit 10.3
TRANSITION SERVICES AGREEMENT
BETWEEN
CONAGRA FOODS, INC.
AND
LAMB WESTON HOLDINGS, INC.
Dated November 8, 2016
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT dated November 8, 2016 (this Agreement ), is between ConAgra Foods, Inc., a Delaware corporation ( ConAgra ), and Lamb Weston Holdings, Inc., a Delaware corporation ( Lamb Weston ). ConAgra and Lamb Weston are sometimes referred to herein individually as a Party , and collectively as the Parties .
RECITALS
A. Lamb Weston and ConAgra are Parties to that certain Separation and Distribution Agreement dated as of even date herewith (the Separation Agreement ).
B. Pursuant to the Separation Agreement, the Parties agreed to separate ConAgra into two companies (1) Lamb Weston which will own and conduct, directly and indirectly, the LW Business; and (2) ConAgra, which will continue to own and conduct, directly and indirectly, the Retained Business (the Separation ).
C. In connection with the transactions contemplated by the Separation Agreement and in order to ensure a smooth transition following the Separation, each Party desires that the other Party provide, or cause its Affiliates or contractors to provide, certain transition services.
D. It is the intent of the Parties that the Services be provided at cost, and therefore, the Fees set forth on Annex B were calculated to reflect costs.
In consideration of the forgoing and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . Unless otherwise defined herein, each capitalized term will have the meaning specified for such term in the Separation Agreement. As used in this Agreement:
Additional Service has the meaning set forth in Section 2.2 .
Agreement has the meaning set forth in the Preamble.
Authorized Representative means, for each Party, any of the individuals listed on Annex A under the name of such Party.
Availed Party has the meaning set forth in Section 5.2(a) .
ConAgra has the meaning set forth in the Preamble.
Eligible Services has the meaning set forth in Section 6.2(a) .
Extendable Service has the meaning set forth in Section 6.1(b) .
Fees means the fees for a particular Service as set forth on Annex B .
Force Majeure Events has the meaning set forth in Section 3.5(b) .
Invoice has the meaning set forth in Section 4.3(a) .
Lamb Weston has the meaning set forth in the Preamble.
Objection Notice has the meaning set forth in Section 4.4 .
Partial Termination has the meaning set forth in the Section 6.2(a) .
Party has the meaning set forth in the Preamble.
Payment Due Date has the meaning set forth in Section 4.3(b) .
Safety and Security Policies has the meaning set forth in Section 5.2(a) .
Separation has the meaning set forth in the Recitals.
Separation Agreement has the meaning set forth in the Recitals.
Service Provider means ConAgra or any of its Subsidiaries providing a Service hereunder.
Service Recipient means Lamb Weston or any of its Subsidiaries receiving a Service hereunder.
Service Recipient Data means all of the data and information owned and provided solely by the Service Recipient, or created by the Service Provider solely on behalf, or for the benefit, of the Service Recipient (including any such data and information created by the Service Provider or the Service Recipient using the Service Providers computer systems or software) in relation to the provision of the Services.
Service Term means the term for a particular Service as set forth on Annex B .
Services means the Services generally described on Annex B and any other Service provided by ConAgra or any of its Subsidiaries pursuant to this Agreement.
Systems has the meaning set forth in Section 5.2(a) .
Term has the meaning set forth in Section 6.1(a) .
-2-
ARTICLE II
PERFORMANCE AND SERVICES
Section 2.1 General .
(a) During the Term, and subject to the terms and conditions of this Agreement, ConAgra will provide, or cause to be provided, the Services to Lamb Weston and its Subsidiaries. The applicable Fee for each Service will be the specified Fee for such Service set forth on Annex B , and the applicable Service Term for each Service will be the specified Service Term for such Service set forth on Annex B . Notwithstanding anything to the contrary contained herein or on any Annex, ConAgra will have no obligation under this Agreement to: (i) operate the LW Business or any portion thereof (it being acknowledged and agreed by ConAgra and Lamb Weston that providing the Services will not be deemed to be operating the LW Business or any portion thereof); (ii) advance funds or extend credit to Lamb Weston; (iii) hire new employees for the purpose of providing the Services; (iv) provide Services to any Person other than members of the LW Group; or (v) implement systems, processes, technologies, plans or initiatives developed, acquired or utilized by ConAgra whether before or after the Distribution Date.
(b) Notwithstanding anything to the contrary in this Agreement, neither ConAgra nor Lamb Weston (nor any of their respective Subsidiaries) will be required to perform Services hereunder or take any actions relating thereto that conflict with or violate any applicable Law, contract, license, sublicense, authorization, certification or permit.
Section 2.2 Additional Services . If Lamb Weston reasonably determines that additional transition services (not listed on Annex B ) of the type previously provided by the ConAgra Group to the LW Business are necessary to conduct the LW Business, and Lamb Weston or its Subsidiaries are not able to provide such services to the LW Business or such services are not commercially available from third party providers, then Lamb Weston may provide written notice thereof to ConAgra. Upon receipt of such notice by ConAgra, if ConAgra is willing, in its sole discretion, to provide such additional service during the Term, the Parties will negotiate in good faith an amendment to Annex B setting forth the additional service (each such service an Additional Service ), the terms and conditions for the provision of such Additional Service and the Fees payable by Lamb Weston for such Additional Service, such Fees to be determined on an arms-length basis with the intent that they reflect costs.
Section 2.3 Service Requests . Any requests by a Party to the other Party regarding the Services or any modification or alteration to the provision of the Services must be made by an Authorized Representative (it being understood that the receiving Party will not be obligated to agree to any modification or alteration requested thereby). Notwithstanding anything to the contrary hereunder, each Party may avail itself of the remedies set forth in Section 6.3 without fulfilling the notice requirements of this Section 2.3 .
-3-
Section 2.4 Access . Subject to Section 5.2 , Lamb Weston, at the reasonable request of ConAgra, will make available on a timely basis to ConAgra all information reasonably requested by ConAgra to enable it to provide the Services. Lamb Weston will give ConAgra and its Affiliates, employees, agents and representatives, as reasonably requested by ConAgra, reasonable access, during regular business hours and at such other times as are reasonably required, to the premises of the LW Business for the purposes of providing the Services.
ARTICLE III
SERVICE QUALITY; INDEPENDENT CONTRACTOR
Section 3.1 Service Quality .
(a) The Service Provider will perform the Services in a manner and quality that is substantially consistent with the Partys past practice (including as to quantity) in performing the Services for the LW Business, and in any event in compliance with any terms or service levels set forth on the applicable Annex. The Service Recipient will use the Services in substantially the same manner and on substantially the same scale as they were used by such Party and its Affiliates in the past practice of the LW Business, prior to the Distribution Date.
(b) Each Party acknowledges and agrees that certain of the Services to be provided under this Agreement have been, and will continue to be provided (in accordance with this Agreement and the Annexes hereto) to the LW Business by third parties designated by the Service Provider. To the extent so provided, the Party responsible for providing such Services will use Commercially Reasonable Efforts to (i) cause such third parties to provide such Services under this Agreement and/or (ii) enable the Party seeking the benefit of such Services and its Subsidiaries to avail itself of such Services; provided , however , that if any such third party is unable or unwilling to provide any such Services, the Parties agree to use their Commercially Reasonable Efforts to determine the manner, if any, in which such Services can best be provided (it being acknowledged and agreed that any costs or expenses to be incurred in connection with obtaining a third party to provide any such Services will be paid by the Party to which such Services are provided; provided that the Service Provider will use Commercially Reasonable Efforts to communicate the costs or expenses expected to be incurred in advance of incurring such costs or expenses).
Section 3.2 Independent Contractor; Assets .
(a) The Service Provider is an independent contractor. All employees and representatives of the Service Provider and any of its Subsidiaries involved in providing Services will be under the exclusive direction, control and supervision of the Service Provider or its Subsidiaries (or their subcontractors) providing such Services, and not of the Service Recipient. The Service Provider or its Subsidiaries (or their subcontractors) providing the Services will be solely responsible for compensation of its employees, and for all withholding, employment or payroll taxes, unemployment insurance, workers compensation, and any other insurance and fringe benefits with respect to such
-4-
employees. The Service Provider or its Subsidiaries (or their subcontractors) providing the Services will have the exclusive right to hire and fire any of its employees in accordance with applicable Law. The Service Recipient will have no right to direct and control any of the employees or representatives of the Party or its Subsidiaries (or their subcontractors) providing such Services.
(b) All procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by a Party, any of its Subsidiaries or any third party service provider in connection with the provision of the Services hereunder will remain the property of such Party, its Subsidiaries or such service providers and, except as otherwise provided herein, will at all times be under the sole direction and control of such Party, its Subsidiaries or such third party service provider. No license under any patents, know-how, trade secrets, copyrights or other rights is granted by this Agreement or any disclosure in connection with this Agreement by either Party.
Section 3.3 Uses of Services . The Service Provider will be required to provide the Services only to the Service Recipient and the Service Recipients Subsidiaries in connection with the Service Recipients operation of the Business. The Service Recipient may not resell any Services to any Person whatsoever or permit the use of such Services by any Person other than in connection with the operation of the Business in the ordinary course of business.
Section 3.4 Transition of Responsibilities . Lamb Weston agrees to use Commercially Reasonable Efforts to reduce or eliminate its and its Subsidiaries dependence on each Service as soon as is reasonably practicable. Each Party agrees to cooperate with the other Party to facilitate the smooth transition of the Services being provided to the Service Recipient by the Service Provider.
Section 3.5 Disclaimer of Warranties: Force Majeure .
(a) Except as expressly set forth in this Agreement: (i) Lamb Weston acknowledges and agrees (on behalf of itself and any other Service Recipient) that ConAgra makes no warranties of any kind with respect to the Services to be provided hereunder; and (ii) ConAgra hereby expressly disclaims all warranties with respect to the Services to be provided hereunder, as further set forth immediately below.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT WILL BE PROVIDED AS-IS, WHERE-IS, WITH ALL FAULTS, AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, TITLE OR ANY OTHER WARRANTY WHATSOEVER.
(b) Notwithstanding anything to the contrary contained in this Agreement, neither Party will be liable for any interruption, delay or failure to perform any obligation under this Agreement (but specifically excluding any inability or failure to pay for
-5-
Services rendered hereunder) when such interruption, delay or failure results from causes beyond such Partys reasonable control, including any Law or act of any Governmental Authority, riot, terrorism, insurrection or other hostilities, embargo, fuel or energy shortage, equipment breakdowns, power failure, pandemic, epidemic, fire, flood, earthquake or act of God, strikes, lockouts, labor shortages, failure of a third party to satisfy its contractual obligations, or any other similar cause ( Force Majeure Events ); provided , however , that the affected Party promptly notifies the other Party, in writing, upon learning of the occurrence of the Force Majeure Event. Subject to compliance with the foregoing, a Partys obligations hereunder will be postponed for such time as its performance is suspended or delayed on account of the Force Majeure Event and, upon the cessation of the Force Majeure Event, such Party will use Commercially Reasonable Efforts to resume promptly its performance hereunder.
ARTICLE IV
FEES; PAYMENT
Section 4.1 Fees . The Service Recipient will pay the Service Provider the Fees for the Services provided by such Service Provider under this Agreement. The Fees for the Services are set forth on Annex B .
Section 4.2 Taxes . To the extent required or permitted by applicable Law, there will be added to any Fees due under this Agreement, and Lamb Weston agrees to pay to the Service Provider, amounts equal to any taxes, however designated or levied, based upon such Fees, or upon this Agreement or the Services provided under this Agreement, or their use, including state and local privilege or excise taxes based on gross revenue and any taxes or amounts in lieu thereof paid or payable by the Service Provider hereunder. In the event taxes are not added to an invoice from the Service Provider hereunder, the Service Recipient is responsible to remit to the appropriate tax jurisdiction any additional amounts due including taxes, interest and penalties. The Parties will cooperate with each other to minimize any of these taxes to the extent reasonable. If additional amounts are determined to be due on the Services provided hereunder as a result of an audit by a tax jurisdiction, Lamb Weston agrees to reimburse the Service Provider for the additional amounts due including taxes, interest and penalties. Lamb Weston will have the right to contest the assessment with the tax jurisdiction at its own expense. The Service Provider hereunder will be responsible for penalties or interest solely attributable to its failure to remit invoiced taxes. The Parties further agree that, notwithstanding the foregoing, neither Party will be required to pay any franchise taxes, taxes based on the income of the other Party or personal property taxes on property owned or leased by a Party and used by such Party to provide Services. Notwithstanding anything else in this Agreement to the contrary, the obligations of this Section 4.2 will remain in effect until the expiration of the relevant statutes of limitation.
Section 4.3 Invoices and Payment .
(a) Unless otherwise specified in Annex B , within 10 days following the end of each fiscal month of Service Provider, the Service Provider will submit to the Service
-6-
Recipient for payment a written statement of amounts due under this Agreement for such month (an Invoice ). The Invoice will set forth the Fees and any third party costs or charges that are required to be reimbursed by Service Recipient in connection with the provision of any Services, in the aggregate and itemized, based on the descriptions set forth on Annex B . Each statement will specify the nature of any amounts due for any Fees as set forth on Annex B and will contain reasonably satisfactory documentation in support of such amounts as specified therein and such other supporting detail as the Service Recipient may reasonably require to validate such amounts due.
(b) Unless otherwise specified in Annex B , Lamb Weston will pay all amounts due pursuant to an Invoice no later than 14 days after the date of the Invoice (the Payment Due Date ). All timely payments under this Agreement will be made without early payment discount.
(c) Subject to Section 4.4 , if Lamb Weston fails to pay the full amount of any invoice by the Payment Due Date, such failure will be considered a material default under this Agreement. The remedies provided to each Party by this Section 4.3(c) and by Section 6.3 will be cumulative with respect to any other applicable provisions of this Agreement. Payments made after the Payment Due Date will bear interest at the rates set forth in Annex B for the applicable Services.
Section 4.4 Payment Disputes . The Service Recipient may object to any amounts for any Service invoiced to it at any time before, at the time of, or after payment is made, provided such objection is made in writing ( Objection Notice ) to the Service Provider prior to the Payment Due Date. Any dispute under this Section 4.4 will be resolved in accordance with the provisions of Section 7.8 and Article V of the Separation Agreement. The Service Recipient will pay interest, which will begin to accrue beginning on the date that is 60 days following receipt of the Service Recipients Objection Notice, at an annual rate equal to the Prime Rate plus 2.0% (compounded monthly) on any amounts it is required to pay to the Service Provider upon resolution of the dispute if the dispute is resolved in the Service Providers favor.
ARTICLE V
CONFIDENTIALITY
Section 5.1 Confidentiality . Each Party agrees that the specific terms and conditions of this Agreement and any information, Service Recipient Data and Materials conveyed or otherwise received by or on behalf of a Party in conjunction herewith are confidential and are subject to the terms of the confidentiality provisions set forth in Section 3.04 of the Separation Agreement.
Section 5.2 Security .
(a) If either Party (including its Affiliates and their employees, authorized agents and subcontractors) is given access to the other Partys computer systems or software (collectively, Systems ), premises, equipment, facilities or data in connection with the Transition Services, the Party given access (the Availed Party ) will comply
-7-
with (and will cause its Affiliates, and their employees, authorized agents and subcontractors to comply with) all of the other Partys policies and procedures in relation to the use and access of the other Partys Systems, premises, equipment, facilities or data (collectively, Safety and Security Policies ), and will not tamper with, compromise or circumvent any safety, security or audit measures employed by such other Party. The Availed Party will access and use only those Systems, premises, equipment, facilities and data of the other Party for which it has been granted the right to access and use.
(b) Each Party will use Commercially Reasonable Efforts to ensure that only those of its personnel who are specifically authorized to have access to the Systems, premises, equipment, facilities and data of the other Party gain such access, and use Commercially Reasonable Efforts to prevent unauthorized access, use, destruction, alteration or loss of such Systems, premises, equipment, facilities or data (including, in each case, any information contained therein), including notifying its personnel of the restrictions set forth in this Agreement and of the Safety and Security Policies.
(c) If, at any time, the Availed Party determines that any of its personnel has sought to circumvent, or has circumvented, the Safety and Security Policies, that any unauthorized Availed Party personnel has accessed the Systems, premises, equipment, facilities or data, or that any of its personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of, or damage to, premises, facilities, equipment, data, information or software of the other Party, the Availed Party will promptly terminate any such persons access to the Systems, premises, equipment, facilities or data and promptly notify the other Party. In addition, such other Party will have the right to deny personnel of the Availed Party access to its Systems, premises, equipment, facilities or data upon notice to the Availed Party in the event that the other Party reasonably believes that such personnel have engaged in any of the activities set forth above in this Section 5.2(c) or otherwise pose a security concern. The Availed Party will use Commercially Reasonable Efforts to cooperate with the other Party in investigating any apparent unauthorized access to such other Partys Systems, premises, equipment, facilities or data.
(d) If any Systems, premises, equipment or facilities of a Party are damaged (ordinary wear and tear excepted) due to the conduct of the Availed Party or any of its Affiliates, or their employees, authorized agents or subcontractors, the Availed Party will be liable to the other Party for all costs associated with such damage, to the extent such costs exceed any available insurance proceeds.
ARTICLE VI
TERMINATION
Section 6.1 Term .
(a) The term of this Agreement (the Term ) will commence on the Distribution Date and end on the earliest to occur of (i) the date on which the provision of all Services have terminated pursuant to Annex B (inclusive of any term extension agreed to by the Parties for any Extendable Service pursuant to Section 6.1(b) ), (ii) the date on which the provision of all Services has been terminated by the Parties pursuant to Section 6.2 , (iii) the date this Agreement is terminated pursuant to Section 6.3 and (iv) the date that is 18 months after the Distribution Date.
-8-
(b) Annex B identifies those Services that are eligible for an extension of their respective Service Term as provided in this Section 6.1(b) (each such Service, an Extendable Service ). To the extent reasonably necessary to (i) continue the transition of any Extendable Service from ConAgra or its Affiliates to Lamb Weston, its Affiliates or other providers and (ii) the continued operation of Lamb Westons business in connection therewith, in each case, as reasonably agreed by Lamb Weston and ConAgra, Lamb Weston may elect, by delivering written notice to ConAgra no later than 45 days prior to the end of the then in effect term for such Extendable Service, to extend any such Extendable Service (and, as necessary, the term of this Agreement with respect to such Service) by a period of up to six months (or such shorter extension period as provided in Annex B for such Extendable Service); provided , however , that Lamb Weston may only extend each such Extendable Service one time; provided further , however , that any extension of the Service Term for such Extendable Service is subject to receiving any necessary consents from third party vendors to such extension. To the extent the Service Term of any Extendable Service is extended hereunder, Service Recipient will be responsible for any incremental costs related to enabling such extension.
Section 6.2 Partial Termination .
(a) Annex B identifies those Services that are eligible for termination prior to the expiration of the Service Term ( Eligible Services ). The Service Recipient may, upon providing to the Service Provider the notice specified in Annex B and satisfying any such other requirements specified in Annex B with respect to any such Eligible Service, terminate any Eligible Services that, prior to the expiration of the Service Term, are no longer needed from the Service Provider, in which case this Agreement will terminate as to such Eligible Services (a Partial Termination ); provided , that such termination shall not relieve the Service Recipient from any obligations arising under this Agreement prior to the termination of such Service(s) or its obligations with regard to those Services it continues to receive. The Parties will mutually agree as to the effective date of any Partial Termination.
(b) In the event of any termination prior to the scheduled expiration of the Service Term or of any Partial Termination hereunder, with respect to any terminated Services in which the Fee for such terminated Services is charged as a flat monthly rate, if termination occurs other than the end of the month, there will be no proration of the monthly rate. To the extent any amounts due or advances made hereunder related to costs or expenses that have been or will be incurred and that cannot be recovered by the Service Provider, such amounts due or advances made will not be prorated or reduced and the Service Provider will not be required to refund to the Service Recipient any prorated amount for such costs or expenses; and the Service Recipient will reimburse the Service Provider for (i) Service Recipients proportional share of any third party costs or charges that are required to be paid in connection with the provision of any Services and that cannot be terminated and (ii) any third party cancellation or similar charges incurred as a result of the Service Recipients early termination.
-9-
Section 6.3 Termination of Entire Agreement . Subject to the provisions of Section 6.5 , a Party will have the right to terminate this Agreement or effect a Partial Termination effective upon delivery of written notice to the other Party if the other Party:
(a) makes an assignment for the benefit of creditors, or becomes bankrupt or insolvent, or is petitioned into bankruptcy, or takes advantage (with respect to its own property and business) of any state, federal or foreign bankruptcy or insolvency act, or if a receiver or receiver/manager is appointed for all or any substantial part of its property and business and such receiver or receiver/manager remains undischarged for a period of 30 days; or
(b) materially defaults in the performance of any of its covenants or obligations contained in this Agreement (or, in the case of a Partial Termination, with respect to the Services being terminated) and such default is not remedied to the non-defaulting Partys reasonable satisfaction within 45 days after receipt of written notice by the defaulting Party informing such Party of such default, or if such default is not capable of being cured within 45 days, if the defaulting Party has not promptly begun to cure the default within such 45-day period and thereafter proceeded with all diligence to cure the same.
Section 6.4 Procedures on Termination . Following any termination of this Agreement or Partial Termination, each Party will cooperate with the other Party as reasonably necessary to avoid disruption of the ordinary course of the other Partys and its Subsidiaries businesses. Termination will not affect any right to payment for Services provided prior to termination.
Section 6.5 Effect of Termination . Section 4.1 and Section 4.2 (in each case, with respect to Fees and Taxes attributable to periods prior to termination), Section 3.2 , Section 4.3 , Section 4.4 , Section 6.4 , this Section 6.5 , ARTICLE I , ARTICLE V , ARTICLE VII and ARTICLE VIII will survive any termination of this Agreement. In the event of a Partial Termination, this Agreement will remain in full force and effect with respect to the Services which have not been terminated by the Parties as provided herein. For the avoidance of doubt, the termination of this Agreement with respect to some, but not all, Services identified on Annex B, will not be a termination of this Agreement.
ARTICLE VII
INDEMNIFICATION AND DISPUTE RESOLUTION
Section 7.1 Limitation of Liability .
(a) No Party nor any of such Partys Affiliates will be liable, whether in contract, tort (including negligence and strict liability) or otherwise, for any special, indirect, punitive, incidental or consequential damages whatsoever that in any way arise out of, relate to, or are a consequence of, its performance or nonperformance
-10-
hereunder, or the provision of or failure to provide any Service hereunder, including loss of profits, diminution in value, business interruptions and claims of customers, whether or not such damages are foreseeable or any Party has been advised of the possibility or likelihood of such damages.
(b) Except for Damages arising out of or related to the gross negligence, willful misconduct or bad faith of the Service Provider, in no event will the Service Providers aggregate liability arising under or in connection with this Agreement (or the provision of Services hereunder) exceed the Fees paid or payable to the Service Provider from the Service Recipient pursuant to this Agreement in respect of the Service from which such Damages flows.
(c) Each Party will use Commercially Reasonable Efforts to mitigate the Damages for which the other is responsible hereunder.
Section 7.2 Indemnification by Lamb Weston . Lamb Weston will indemnify, defend and hold harmless each of the ConAgra Indemnified Parties for any Damages attributable to any third party claims asserted against them to the extent arising from or relating to: (i) any material breach of this Agreement by Lamb Weston or (ii) the provision of the Services by ConAgra, the other members of the ConAgra Group or its or their employees, suppliers or contractors, except to the extent that such third party claims for Damages are finally determined by a court of competent jurisdiction to have arisen out of the material breach of this Agreement, gross negligence, willful misconduct or bad faith of ConAgra, the other members of the ConAgra Group or its or their employees, suppliers or contractors in providing the Services.
Section 7.3 Indemnification by ConAgra . ConAgra will indemnify, defend and hold harmless each of the LW Indemnified Parties for any Damages attributable to any third party claims asserted against them to the extent arising from or relating to: (i) any material breach of this Agreement by ConAgra or (ii) any gross negligence, willful misconduct or bad faith by ConAgra, the other members of the ConAgra Group, or its or their employees, suppliers or contractors, in the provision of the Services by ConAgra, the other members of the ConAgra Group or its or their employees, suppliers or contractors pursuant to this Agreement.
Section 7.4 Exclusive Remedy . Except for equitable relief and rights pursuant to Section 4.2 , Section 4.3(b) or ARTICLE V , the indemnification provisions of this ARTICLE VII will be the exclusive remedy for breach of this Agreement.
Section 7.5 Risk Allocation . Each Party agrees that the Fees charged under this Agreement reflect the allocation of risk between the Parties, including the disclaimer of warranties in Section 3.5(a) and the limitations on liability in Section 7.1 . Modifying the allocation of risk from what is stated here would affect the Fees that are charged for the Services, and in consideration of those Fees, each Party agrees to the stated allocation of risk.
-11-
Section 7.6 Indemnification Procedures . All claims for indemnification pursuant to Section 5.2(d) or this ARTICLE VII will be made in accordance with the provisions set forth in Article IV of the Separation Agreement. Notwithstanding anything to the contrary hereunder, neither Party may assert against the other Party or submit to arbitration or legal proceedings any cause of action, dispute or claim for indemnification which accrued more than two years after the later of (a) the occurrence of the act or event giving rise to the underlying cause of action, dispute or claim and (b) the date on which such act or event was, or should have been, in the exercise of reasonable due diligence, discovered by the Party asserting the cause of action, dispute or claim.
Section 7.7 Express Negligence . THE INDEMNITY, RELEASES AND LIMITATIONS OF LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLE II AND THIS ARTICLE VII ) ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.
Section 7.8 Dispute Resolution . Except for claims arising under ARTICLE V , any Dispute arising out of or relating to this Agreement will be resolved as provided in Article V of the Separation Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments and Waivers .
(a) This Agreement may be amended and any provision of this Agreement may be waived; provided , however , that any such amendment or waiver, as the case may be, is in writing and signed, in the case of an amendment, by the Parties or, in the case of a waiver, by the Party against whom the waiver is to be effective. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.
(b) No delay or failure in exercising any right, power or remedy hereunder will affect or operate as a waiver thereof; nor will any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that any Party would otherwise have.
Section 8.2 Notices . All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to have been duly given (a) upon transmission, if sent by email with confirmation of receipt, (b) when delivered, if delivered personally to the intended recipient, and (c) one Business Day following sending by overnight delivery via an international courier service and, in each case, addressed to a Party at the following address for such Party:
If to ConAgra:
ConAgra Foods, Inc.
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Attention: Colleen Batcheler
Email: colleen.batcheler@conagra.com
-12-
if to Lamb Weston:
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk Spytek
Email: eryk.spytek@conagra.com
or to such other address(es) as may be furnished in writing by any such Party to the other Party in accordance with the provisions of this Section 8.2 .
Section 8.3 Entire Agreement . This Agreement, including the Annexes hereto and the sections of the Separation Agreement referenced herein, constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements and understandings of the Parties of any nature, whether oral or written, with respect to such subject matter.
Section 8.4 No Third-Party Beneficiaries . Except to the extent otherwise provided in ARTICLE VII , this Agreement is solely for the benefit of the Parties and does not confer on third parties any remedy, claim, reimbursement, claim of action or other right in addition to those existing without reference to this Agreement.
Section 8.5 Governing Law . The validity, interpretation and enforcement of this Agreement will be governed by the Laws of the State of Delaware, without regard to the conflict of Laws provisions thereof that would cause the Laws of another state to apply.
Section 8.6 Assignment . No Party may assign its rights or delegate its duties under this Agreement without the written consent of the other Party, except that a Party may assign its rights or delegate its duties under this Agreement to a member of its Group, provided that (a) such Person agrees in writing to be bound by the terms and conditions contained in this Agreement and (b) such assignment or delegation will not relieve any Party of its indemnification obligations or other obligations under this Agreement. Any attempted assignment or delegation in contravention of the foregoing will be void.
Section 8.7 Severability . The Parties agree that (a) the provisions of this Agreement will be severable in the event that for any reason whatsoever any of the provisions
-13-
hereof are invalid, void or otherwise unenforceable, (b) any such invalid, void or otherwise unenforceable provisions will be replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (c) the remaining provisions will remain valid and enforceable to the fullest extent permitted by applicable Law.
Section 8.8 Counterparts . This Agreement may be executed in multiple counterparts (any one of which need not contain the signatures of more than one Party), each of which will be deemed to be an original but all of which taken together will constitute one and the same agreement. This Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party, the other Party will re-execute original forms thereof and deliver them to the requesting Party.
Section 8.9 Rules of Construction . The descriptive headings herein are inserted for convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement or Annexes will include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs will include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. References in this Agreement to any document, instrument or agreement (including this Agreement) includes and incorporates all exhibits, disclosure letters, schedules and other attachments thereto. Unless the context otherwise requires, any references to an Annex, Section or Article will be to an Annex, Section or Article to or of this Agreement. The use of the words include or including in this Agreement or the Schedules will be deemed to be followed by the words without limitation. The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days mean calendar days unless specified as Business Days. References to statutes will include all regulations promulgated thereunder, and references to statutes or regulations will be construed to include all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation as of the date hereof. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement or any other Transaction Document or any Ancillary Agreement, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion, the Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
-14-
Section 8.10 Performance . The Parties agree that irreparable damage would occur if any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement without proof of actual damages, this being in addition to any other remedy to which any Party is entitled at Law or in equity. Each Party further agrees that no other Party or any other Person will be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 8.10 , and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument and will not contest the appropriateness of specific performance as a remedy.
[ Signatures on Following Page ]
-15-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.
CONAGRA FOODS, INC. | ||
By: | /s/ Colleen R. Batcheler | |
Name: | Colleen R. Batcheler | |
Title: | Executive Vice President, General Counsel and Corporate Secretary | |
LAMB WESTON HOLDINGS, INC. | ||
By: | /s/ Thomas P. Werner | |
Name: | Thomas P. Werner | |
Title: | President and Chief Executive Officer |
Annex A
AUTHORIZED REPRESENTATIVES
[See Attached.]
TSA-Annex A
|
Authorized Representatives
Function
ConAgra
Lamb Weston
TSA Lead
Jim Blakemore
John MacArthur
IT
Michelle Miller / Amit Khot
Bill Cox
HR (HRES/Payroll)
Aubrey Froelich
Linda Baird
Finance & Accounting
Brad Costanzo
Brandon Koehler
Mexico Finance
Tanya Amador
Brandon Koehler
Operations
Tom Culross
Tony Campbell
Supply Chain/Procurement
Bob Hill
Sue Duffy
Marketing
Cynthia Arnold
Danny Bawcom
R&I and Quality
Deann Akins-Lewanthal
Chris Rhynalds
Treasury
Pam Malmos
Scott Schneider
Tax
Ken Groetsema
Mark Wynn
GBS
Jodi Maciejewski
Brandon Koehler
Real Estate & Facilities
John Lewandowski
Scott Schneider
Steering/Escalation Board
Bill Hahn, Dan Jones
LW SLT
Annex B
SERVICES AND FEES
[See Attached.]
TSA Annex B | ||||
Transition Services Agreement Schedule of Services | ||||
Table of Contents |
1.0 Information Technology (Given the 16 month term, IT services are not automatically extendable under TSA Section 6.1b ) |
3 | |||
1.1 Infrastructure Services |
3 | |||
1.1.1 Help Desk |
3 | |||
1.1.2 Operations Support |
5 | |||
1.1.3 Data Center Services / Server Administration |
7 | |||
1.1.4 Network Management |
8 | |||
1.1.5 Client Computing |
9 | |||
1.2 Security Operations |
11 | |||
1.3 Application Support (LW Gold Application List is included as Appendix 1) |
12 | |||
1.4 IT Services |
14 | |||
1.6 Data Center Floor Space and Power |
15 | |||
1.7 Information Technology Transition & Set-up Support |
16 | |||
2.0 Global Business Services (GBS) |
17 | |||
2.1 Accounts Payable * |
17 | |||
2.2 Data Management Organization * |
17 | |||
2.3 Global Business Services COE |
18 | |||
3.0 Human Resources Support (not extendable) |
19 | |||
3.1 Benefits Administration Support (US / Canada / Puerto Rico) |
19 | |||
3.2 Payroll, Payroll Tax and Timekeeping (US, PR and Canada 1 ) |
20 | |||
3.3 People Data Management and Other HR Admin Services |
21 | |||
3.4 International Payroll & Benefits Administration |
23 | |||
4.0 Supply Chain |
24 | |||
4.1 Enterprise Procurement |
24 | |||
5.0 Operations |
24 | |||
5.1 Environment, Health, Safety and Security |
24 | |||
7.0 Marketing Support |
27 | |||
8.0 Corporate Controllers Group |
28 | |||
9.0 Treasury Services (Treasury, Fleet, Credit, Insurance and Real Estate) |
30 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
10.0 Corporate Tax |
32 | |||
10.1 Sales & Use Tax |
32 | |||
10.2 1099s |
32 | |||
10.3 Unclaimed Property |
33 | |||
10.4 Q2 Provision |
33 | |||
11.0 Facilities and Real Estate |
33 | |||
12.0 TSA Program Management |
34 | |||
12.1 Appendix 1: LW Gold Application List |
35 | |||
12.3 Appendix 3: IT Labor Rate Card |
49 | |||
12.4 Appendix 4: IT Incident Management/Service Request Targets and SLAs - insert InfoSys SLA / service level matrix |
49 | |||
12.5 Appendix 5: TSA Governance |
52 |
Page 2 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 3 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||
End User Access Administration Provide continued access and use of shared and dedicated applications listed in the Gold Application List. Process LW/Spinco user access requests for applications and network components. Provide user account maintenance and support including: Creation/modification/deletion of user accounts for both shared and dedicated applications in use by the Business as of the Distribution Date. Provide services required for creation/modification/deletion of shared drives and folders as well as the creation/modification/deletion of groups accessing those shared drives and folders. |
|
See IT
header |
|
Until
Feb 28, 2018 |
Page 4 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
1.1.2 Operations Support |
||||||||||||||||
Shared applications and infrastructure [See Gold Application List] Provide Data Center operations in support of CAG/Parent shared systems including SAP operations . Provide Operations level 1 support on automated and user created incidents for shared infrastructure and shared applications consistent with existing processes and documentation. Provide server level monitoring to ensure performance and availability of shared infrastructure in support of shared applications.
Dedicated applications and infrastructure [See Gold Application List] Provide Data Center operations in support of LW/Spinco dedicated systems Provide Operations level 1 support on automated and user created incidents for dedicated infrastructure and dedicated applications consistent with existing processes and documentation. Provide server level monitoring consistent with existing practices existing for the six (6) month period prior to the Distribution Date to ensure performance and availability of dedicated infrastructure.
Incident Management Escalation Process
Shared applications and infrastructure Follow the existing incident management escalation procedures consistent with escalation procedures for the six (6) month period prior to Distribution Date. LW/Spinco resources will be engaged as necessary for any applications that impact LW/Spinco business functions.
Dedicated applications and infrastructure CAG/Parent will follow the existing incident management escalation procedures consistent with escalation procedures for the six (6) month period prior to the Distribution Date. LW/Spinco resources will be responsible for following the CAG/Parent incident management processes |
|
See IT
header |
|
|
Until
Feb 28, 2018 |
|
30 days |
Page 5 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||
1.1.2 (cont.) |
Backups and Disaster Recovery
Provide disaster recovery services consistent with current practices existing for the six (6) month period prior to the Distribution Date. Provide file and data restoration within the data center shared systems (listed in Gold Application List). Perform routine backups based on defined SLAs of all transaction data in a secured offsite location Assist in restoration of files and data within CAG/Parent data center for systems listed in the LW Gold Application List upon request of the LW/Spinco.
Change Management
Shared applications and infrastructure Follow existing change management procedures (including change controls) and notify LW/Spinco designated team of any planned production changes.
Dedicated applications and infrastructure LW/Spinco to follow CAG/Parents existing change management procedures (including change controls) and notify CAG/Parent designated team of any planned production changes. |
See IT
header |
Page 6 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 7 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||
1.1.4 Network Management | ||||||||||||||
WAN Provide site connectivity for all existing site circuits connected to the CAG/Parent network Provide connectivity to CAG/Parents data centers to access agreed upon applications (dedicated and shared applications) Provide internet access to each location in accordance of the CAG/Parents electronic communication policy. Provide network monitoring leveraging existing monitoring tools consistent with monitoring provided for the six (6) month period prior to the Distribution Date. Provide telecommunications support for all employees (phone extension, voicemail, etc.) residing at CAG/Parent facilities during the transition period CAG/Parent is responsible for Domain Name Services (DNS) and IP address management Maintain, monitor and manage wide area network data and/or voice circuits and VPNs to and from all existing LW/Spinco locations existing as of the six (6) month period prior to the Distribution Date. Maintain, monitor and manage all shared Data Center network equipment that exists as of the Distribution Date, including, but not limited to, hubs/switches, IP routers, load balancers, circuit demarcation points, cables, and device configurations in support of current network traffic levels of the LW/Spinco. LW/Spinco to maintain, monitor and manage all dedicated network equipment, including, but not limited to, hubs/switches, IP routers, load balancers, circuit demarcation points, cables, and device configurations physically located at dedicated LW/Spinco locations. Provide continued support of remote access for LW/Spinco vendors who were CAG/Parent vendors existing as of the Distribution Date (Excludes providing support for remote access for new LW/Spinco vendors).
LAN In LW/Spinco facilities, LW/Spincoto coordinate activities with third-party service providers where required to provide support for network maintenance services. LW/Spinco to provide connectivity to applicable IT network hosts (desktops, laptops, and printers). |
See IT
header |
Until Feb 28, 2018 |
Page 8 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
1.1.4 (cont.) |
LAN (cont.) CAG/Parent to provide connectivity to systems as transition is made to LW/Spinco Domain. This access would allow VPN or Citrix remote access to applications. LW/Spinco will provide Level 2 and Level 3 support services for all site equipment including routers, switches, and security devices which are located in existing LW/Spinco locations.
DMZ Provide secure, remote access (via VPN) to the CAG/Parent network under the existing CAG/Parent Electronic Communication Policy |
|||||||||||||||
1.1.5 Client Computing | ||||||||||||||||
Directory Services Provide support and maintain the shared Active Directory environment Provide user authentication and password management for the LW/Spincos core business systems and logical network LW/Spinco will support and maintain any new Domains.
Image Creation and Maintenance Create and maintain all laptop/PC images LW/Spinco will execute services for device provisioning in LW/Spinco locations per the existing CAG/Parents process.
Home Drives/Messaging /Print/Mobile Create / modify / delete shared drives, folders, and printers as normal business Provide support and maintenance for user email and Jabber consistent with practices for the six (6) month period prior to the Distribution Date Provide Exchange mailbox administration including: adds, modifications, and deletes Provide approved secure web and client access to email users Provide email retention services consistent with CAG/Parent practices for the six (6) month period prior to the Distribution Date Provide support of mobile device management (InTune) LW/Spinco to provide support for mobile devices. |
|
See IT
header |
|
|
Until Feb 28, 2018 |
|
Page 9 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
PC Patching Patching (security and application) all Desktops/PCs attached to the CAG/Parent network. LW/Spinco is responsible for creating and coordinating with the CAG/Parent any dedicated application patches that are required
Desktop Support Provide desktop support using the CAG/Parent standard PC image. CAG/Parent will provide at cost any devices for new LW/Spinco employees that will execute any LW/Spinco applications (dedicated or shared) in accordance with CAG/Parent standard requirements. Cost of equipment will be the responsibility of the LW/Spinco. Any new purchased devices or machines will adhere to CAG/Parent standard image and guideline Any new devices for LW/Spinco will be paid for by LW/Spinco and deployed with CAG image by CAG desktop support team |
Page 10 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
1.2 Security Operations |
||||||||||||||||
1.2.1 Security Operations |
||||||||||||||||
Monitor systems and device logs, network traffic, intrusion detection systems and the client computing security tools to detect any unusual usage patterns, third-party attacks or unauthorized access and promptly report to the LW/Spinco any security incidents involving IT system integrity, confidentiality issues or unauthorized data access. CAG/Parent to monitor, investigate, and promptly report to LW/Spinco any end user reported security incidents involving IT system integrity, confidentiality issues or unauthorized data access Provide physical security to the Companys equipment at the CAG/Parent datacenters. Field equipment security is the responsibility of LW/Spinco. CAG/Parent to provide Anti-virus protection on server and PC assets, and SPAM monitoring services for the LW/Spincos email Provide e-discovery and legal hold services consistent with services provided for the six (6) month period prior to the Distribution Date. Provide security access via existing employee roll-on forms and processes as well as execute employee terminations as requested through existing HR process and SLAs (e.g. Non-Employee contractor status) |
|
See IT
header |
|
Until Feb 28, 2018 |
Page 11 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 12 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
1.3.1 (Cont.) |
Application Support (Continued)
Dedicated Applications Any modifications or upgrades, code changes, break/fix, significant bug fixes, or enhancements will be made by the LW/Spinco. LW/Spinco maintains all existing inbound/outbound interfaces in support of LW/Spinco business processes involving dedicated applications listed in Gold Application List. LW/Spinco will provide maintenance and support services for dedicated applications listed in Gold Application List. If LW/Spinco requires CAG/Parent support services for dedicated applications listed in Gold Application List, those services can be requested and if CAG/Parent is able to provide them they will be billed at a rate consistent with Appendix 3, Rate Table. |
Page 13 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
1.4 IT Services | ||||||||||||||||
1.4.1 |
IT Supplier Management | |||||||||||||||
Manage application and infrastructure vendor relationships for shared applications and infrastructure, as they exist for the six (6) month period prior to the Distribution Date per the existing CAG/Parent vendor management process Prior to expiration, CAG/Parent will inform LW/Spinco of any contractual or time sensitive expiration of agreements Coordinate with 3rd party vendors contracted or retained by CAG/Parent to provide support and resolve issues for shared applications and infrastructure If CAG/Parent Suppliers do not extend software usage rights or transfer rights beyond what is in CAG/Parents suppliers contracts, LW/Spinco will be responsible to secure their own licenses and / or agree to pay CAG/Parent for any incremental costs associated with extended usage rights and / or transfer rights to LW/Spinco. LW/Spinco must adhere to CAG/Parent suppliers software license agreement terms and conditions. In the event of any non-compliance by LW/Spinco that results in increased fees or penalties to CAG/Parent, LW/Spinco will be responsible for the costs. |
|
See IT
header |
|
Until Feb 28, 2018 | ||||||||||||
1.4.2 |
TSA IT Billing Support | |||||||||||||||
CAG/Parent will bill all IT related expenses and provide line item detail of all billable expenses to LW/Spinco on a monthly basis LW/Spinco will notify CAG/Parent plans for application or infrastructure contract exits and planned TSA reductions |
|
See IT
header |
|
Until Feb 28, 2018 |
Page 14 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 15 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 16 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
2.0 Global Business Services (GBS) | ||||||||||
2.1 Accounts Payable * | ||||||||||
2.1.1 |
Travel Card Processing
For PeopleSoft-supported (Workday after 1/1/17) Lamb Weston employees based on ConAgra Concur configuration and ConAgra T&E policy Reviewing and processing T&E expense reports Support providing data for monthly processing out-of-pocket reimbursements Conducting sample audits T&E reports Performing T&E Concur maintenance Assist employees with Bank account discrepancies Cancel Bank account for terminated employees Track receipt of amounts and reports due from employees T&E Monitor terminated employee final expense reports |
$2,200 | 12 months |
Quarterly
Transition Review |
Daily T&E report support and monthly audits |
|||||
2.2 Data Management Organization * | ||||||||||
2.2.1 |
Day to Day Support of Data * (extendable until 2/28/18)
Daily Support of Data Operations Process the creation and maintenance of vendor and indirect material master data records Process Remedy tickets for vendor and indirect material requests Support cVend and cMat workflow processes and tools Maintain roles within cVend and cMat to ensure workflow tasks can be processed Troubleshoot master data issues as needed |
$6,500 | 12 Months |
Quarterly
Transition Review |
Create and maintain the following items daily:
Vendor master data Indirect Material master data
Daily reconciliation of remedy queues |
Page 17 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
2.2.2 |
1WorldSync Contract Pass-through of Lamb Westons portion of the 1WorldSync contract remaining in calendar 2016; continuation into 2017 as needed |
$5,600 /
month |
12 Months | 30 days | ||||||
2.2.3 |
Data Management Transition Project Support (if applicable) Support project plan and Lamb Weston resources Support project tasks, and raise issues and expedite when applicable |
Hourly rate
dependent on skill level needed ($75/hr) |
12 Months |
Quarterly
Transition Review |
TBD. General per hour charges will range $55 to $75 per hour. | |||||
2.3 Global Business Services COE |
||||||||||
2.3.1 |
COE Support for Financial Planning &Analysis Services * (extendable through 2/28/18)
Salary Planning Tool Maintenance Maintenance of SG&A Reporting tables |
$75/hr | 12 Months |
Quarterly
Transition Review |
Prepare and populate salary planning tool with updated census data and enterprise assumptions; maintain SG&A reporting versions and tables |
Page 18 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
3.0 Human Resources Support (not extendable) | ||||||||||||||||
3.1 Benefits Administration Support (US / Canada / Puerto Rico) | ||||||||||||||||
Through 12/31/2016: Eligibility to continue participation in ConAgra/Parents Health and Welfare programs as currently enrolled. Health and Welfare programs are defined as Medical, Dental, FSA, Dental, Vision, Prescription, Employee Assistance, Castlight, StayWell, Dependent Care FSA Plans, Retiree Medical Wellness (e.g. SimplyWell) participation as it exists in 2016 Eligibility to continue participation in AD&D, Insurance, STD/LTD subject to approval by Benefits carriers, including confirmation by Life and LTD benefits carrier that these items remain fully insured for existing employees as well as coverage status for new hires through 12/31/16 Eligibility for continued participation in CRISP/401k (up to 12 months) Continuation of 2016 Voluntary Deferred Compensation and Directors Deferred Compensation programs including enrollment for 2017 plan year Support 2017 Benefits Open Enrollment consistent with existing ConAgra process and approach Claims processing and settlement |
|
$37,500
per month plus pass through of allocable enterprise program costs (30%) and direct claims costs. Such claims may trail up to one year. |
|
|
Through
12/31/16 |
|
|
30 days written
notice
Except for
|
|
Consistent with service levels provided to the business in the six months prior to spin | ||||||
From 1/1/2017 through 12 months from Distribution Date: Continuation of Benefits Administration within Workday until tenant split: Assumes separation of contracts, billing and settlement procedures are in place with benefits providers under new vendor agreements direct with LW Eligibility for continued participation in CRISP/401k Support 401k plan-to-plan transfer at termination of TSA Processing and settlement of trailing claims incurred between date of spin and 12/31/16. Complex claims may trail one year or longer. |
|
$15,000
per month plus pass through of allocable enterprise program costs (30%) LW to process direct claims costs. |
|
|
Up to 12
months from Distribution Date |
|
Page 19 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 20 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
Unemployment Administration current practices and procedures using existing 3 rd party Payroll processing support for CAG Voluntary Deferred Compensation and Directors Deferred Compensation programs (through 12/31/16) Payroll processing support for LW Voluntary Deferred Compensation and Directors Deferred Compensation programs (beginning 1/1/17) Scope of the Payroll, Payroll Tax and timekeeping service initially includes US, Puerto Rico and Canada (8 Sales employees). On January 1, 2017, the scope will increase to include LW Canadian operations as part of the Workday system implementation.) |
||||||||||||||||
3.2.2 |
Timekeeping (IT/Kronos interdependency) US: continue time and attendance services through Kronos and payroll system (PeopleSoft until 12/31/16 / Workday beginning 1/1/17) Canada: establish time and attendance services utilizing Kronos beginning 1/1/17. IT and HR project to be activated pre-spin |
See above 3.2.1 | Process time and attendance for US and CAN (one plant - Taber) weekly/biweekly | |||||||||||||
3.3 People Data Management and Other HR Admin Services | ||||||||||||||||
3.3.1 |
People Data Management and other HR Admin Updating, maintaining employee data on the HRIS or system of record including changes of status etc. aligning with current practices and procedures Tracking and reporting of Contingent workforce data, including compliance status checks and system access compliance Processing and managing the transfer of staff from one service area, business line or facility to another Facilitate car mileage for payroll processing where applicable, consistent with existing practices [This process is managed by Treasury/Dae DiCenzo today] Generate required reports to government and federal agencies. For example, fair hiring practice reports or government mandated training classes Lead and coordinate the user testing of Workday HRIS/HR Application system until LW tenant split occurs I9 administration through LW tenant split (or sooner, if a separate LW I9 system is established (after 1/1/2017)) ACA administration for calendar year 2016 |
|
Included in
census based charge for 3.2, Payroll |
|
12 months |
|
30 days written
notice
Except
for
|
|
Support HR administration for transactions daily
Provide Level 1 HR system support (Payroll, HR and Benefits) daily |
Page 21 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
3.3.2 |
Security Access Administration: Employee to Contractor conversion for continued systems access * (extendable through 2/28/18) Conversion and administration of employee records in HRES/Workday to maintain system access with CAG/Parent systems for the full duration of the TSA |
$10,000
per month after payroll termination |
Through
February 28, 2018, consistent with IT duration |
NA
required for the full TSA duration unless all services are terminated |
Convert and maintain user IDs and systems security access after LW/Spincos independent HRIS conversion | |||||
3.3.2.5 |
TSA/Transition Training : requires sufficient headcount / people resources on board no later than 3/1/17 to begin transitional work (e.g. Benefits Administration, HRIS) |
$80 per
hour plus materials and travel |
See above
3.3.1 |
|||||||
3.3.3 |
Learning and Development Manage existing Alchemy instance and HRIS linkage Continue plant safety learning and development programs (see IT TSA for associated IT costs) [after split, LW will need a new interface from Alchemy] |
$3,000 /
month for
|
12
months (dependent on Workday tenant split) |
30 days | Scope includes existing services only. Can be independently terminated if WD interface is deemed unnecessary | |||||
3.3.4 |
Additional Services - Success Factors: Access to Success Factors data through 1/1/17 (end of CAG SF contract) Talent Management and Advanced Comp capabilities are included in the scope of Workday project. (hence the tenant split date 10/17) |
$2,500 /
month |
Through
1/31/17 |
NA | ||||||
3.3.5 |
Additional Services Relocation: Administration of any in-process or new LW Spinco relocations to the extent of charges incurred in calendar 2016. Knowledge/information transfer to facilitate transition of Relocation Administration to LW under a new, separate Sirva contract. |
Pass
through of direct vendor fees . |
Through
12/31/16 |
NA | ||||||
3.3.6 |
Additional Services Project Work (time and materials) Additional requests for mutually agreed services outside above scope of services (e.g. data interfaces) To be defined: Project plan related to tenant split, costs of WD tenant split carried by LW post spin |
$100 / hr
project work 1 plus pass through of direct costs |
See above
3.3.1 |
Page 22 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 23 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 24 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
5.1.2 |
On-line compliance support * Safety Data Sheet storage Site Hawk (SDS) likely done by Distribution Date; included as part of IT TSA Management of DOT regulated vehicles (tractor / trailer drivers) (as permitted by law) |
|||||||||
5.1.3 |
Other * Sustainable Development Reporting Tool SDRT (in SAP) Lockout Pro - no application cost; duplicate from CAG and transfer to new LW servers |
|||||||||
5.1.4 |
Training Alchemy System plus subscription as a pass through |
$75 / hr
1
plus subscription pass through |
6 months | |||||||
5.1.5 |
Security Supplier Audits to support C-TPAT |
$90 / hr
plus travel |
TBD | TBD | ||||||
5.1.6 |
Department of Homeland Security Chemical audit process |
$90 / hr
plus travel |
TBD | TBD | ||||||
6.0 Research and Development Workflow Support | ||||||||||
6.1 |
Food Safety Auditing * Internal Facility Audits |
Hourly
rate plus travel |
3 months | 30 days |
David Melton CAG provider of LW current and historical audit Data. Chris R.& Todd Badgley LW Points. Train for 1 or two Audit shadows: Training from David Melton to new LW manager Food Protection Audit. (confirmed) |
Page 25 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
6.2 |
Product Development Access to Subject Matter Experts * Microbiological consulting for Foods Safety issues |
Hourly
rate based on position |
6 months | 30 days |
DeAnn Akins-Lewenthal CAG contact. Chris R. Todd Badgley LW. External consultive industry benchmarking, Participate in one onboarding discussion with New Principal Microbiologist LW (confirmed) |
|||||
6.3 |
Packaging * Access to Packaging Dynamics lab Access to Packaging Subject Matter Experts |
Hourly
rate based on position |
6 months | 30 days | Limited use with advance notice. Do not estimate more 4 service requests, Eric Sinz CAG contact, Kim Williams LW point. (confirmed) | |||||
6.4 |
Supplier Quality- Domestic * Consultation support for establishing new LW function Training / procedural awareness of new hire for LW |
Hourly
rate based on position plus pass- through of travel expenses |
6 months | 30 days |
Penny Mack CAG and New Manager Food Protection, Supplier compliance for LW Current Contacts Chris R and Todd Badgley. Supplier Risk Ranking data and process as well as all supplier quality practices reference documentation. Training only no new audits to be done by CAG for LW |
|||||
6.5 |
Supplier Quality International * Consultation support for establishing new LW function Information Sharing on all external International provider companies Access to SAI for global services for BRC/GFSI audits |
Hourly
rate based on position plus pass- through of travel expenses |
12 months | 30 days |
Work with Joseph Elrefaie Chris Fosse to be informed, Chris Rhynalds and Horst Ellendt For LW (Work in process) |
Page 26 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
6.6 |
Consumer Affairs Support Retail, GBU, MBU and Foodservice * Resources to maintain call center and escalation process Astute reporting and data extracts LW specific 800# - assigned |
$2,500 /
month |
7 months | 30 days |
Work with Leslie Skybo CAG contact, Horst Ellendt LW and Jim Neavill (Work in process) |
|||||
6.7 |
Retail heating (cooking) validation studies for packaging development * |
Hourly
rate based on position |
6 months | 30 days |
20 products to validate Lea Anne Dea =CAG provider Ghislaine Joly LW contact (Confirmed) |
|||||
6.8 |
Sample Manager Access / Microbiological * Support for Sample Manager program IT Systems and Microbiological technical support. |
Hourly
Rate based
|
6 months | 30 days |
Greg Shuett IT system support Kari Sweeney business application support Dawn Vaadeland LW IT transitional support. Todd Badgley LW Point until new Principal microbiologist hired. (confirmed) |
|||||
6.9 |
Foreign Material Analysis Retail * (extendable up to 3 months) CAG forensic analysis for Retail FM Complaints |
Hourly
Rate |
3 months
Only until
|
30 days |
Eric Brown CAG provider Jeff Nelson LW point (FM Lab) Russell Jones Retail product Quality LW (confirmed) |
|||||
7.0 Marketing Support | ||||||||||
7.1 |
Coupon Clearinghouse * Pending vendor consent, continued support of coupon processing and redemption for a run-out period (to be determined based on activity levels) |
$500 per
month plus coupon redemption costs |
12 months | 30 days | Consistent with the six (6) month period up to and including the Distribution Date and interdependent with vendor contract assignment negotiation |
Page 27 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
8.0 Corporate Controllers Group |
||||||||||
8.1 |
Financial Accounting Services * (extendable through 2/28/18) Managing period-end close schedule and processes in the SAP ledger system including journal entry processing and account reconciliations as specified. General Ledger maintenance including updating chart of accounts, maintaining currency rates, translation tables, and accounting periods, and mapping and loads to ASI and BPC. Currency revaluation/translation processing and posting, as applicable Provide data in support of transition to new general ledger systems, as required. Monthly accounting transactions (e.g., Concur accruals, IR no GR Report Processes (GRIR), Cash Settlement Processes) Reconciliation of all cash accounts support TBD TSA billing, weekly remittance administration and reconciliation |
$21,600 | 12 months | TBD in transition planning (e.g. closing schedule and fiscal period alignment) | ||||||
8.2 |
Fixed Assets Management * (extendable through 2/28/18) Complete Fixed Asset system maintenance Capitalize, retire, transfer of assets in FA system Set up project number (p-value) based on approved Capital Investment Request (CIR). Provide access to Fixed Asset and Capital Management related reporting Verify monthly depreciation interfaces with ASI Provide Tax with PP&E-related information and prepare tax package for yearend tax return Set-up assets for new company (Question on this regarding the implications to existing processing in SAP in particular) New company to provide authorized capital transfer, impairment, divestment (CTID) request form to CCG for processing New company to send project completion notice to CCG Capitalize and categorize assets for new company New company to provided information from periodic physical inventory of capital assets New company to provide idle asset listing to CCG quarterly Provide new company with data extracts required for conversion to new systems, as needed. |
$2,700 | 12 months |
Page 28 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
8.3 |
Property Tax, Insurance & Loss Support Prepare real estate/personal property tax packages for Corporate Tax Approve and code invoices/payment requests related to real estate and personal property returns Determine and accrue real and personal property taxes |
$2,700 | 12 months | |||||||
8.4 |
Finance-related payroll support interlinked with PeopleSoft/Workday / Payroll service 3.2.1 Execution of existing financial accounting processes associated with payroll processing Generate weekly payroll funding wire invoice and supporting documentation |
$5,400 | 12 months | |||||||
8.5.1 |
International Finance Support - CCG Financial Reporting Support for International Regulatory Filings Access to and transfer of historical data Transactional accounting support consistent with historical scope and practices Scope includes Netherlands, Hong Kong, Australia, Columbia, Panama, Puerto Rico and Mauritius Pass-through of country-relevant TMF Global direct charges |
$2,700 plus
pass- through of direct costs (TMF) |
3 months | |||||||
8.5.2 |
Ad hoc CCG International Finance Support Ad hoc support as mutually agreed after 8.5.1 terminates |
$85 / hr |
Month 4-6
after spin |
|||||||
8.6 |
Additional financial services or ad hoc projects to be negotiated on a flat rate or hourly rate basis, based on availability of resources. | 12 months | ||||||||
8.7 |
Corporate FP&A Support | $85 / hr | 12 months | |||||||
8.8 |
International Finance Support - Mexico BPCS Transactional support including AR, AP Inventory accounting, reserve management and reconciliations Execute period close Administer cash remit and reconciliations Due To / Due From reconciliation related to Mexico transactions |
$15,400 | 12 months | 30 days | ||||||
8.9 |
Internal Audit Hosting Q2 FY17 SOX certification room (not extendable) |
Pass-
through direct costs |
One time | NA |
Page 29 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
9.0 Treasury Services (Treasury, Fleet, Credit, Insurance and Real Estate) | ||||||||||
9.1 |
Cash Management Provide the following data for Cash Management processes: Bank Relationship Management: monthly bank fees sent from bank on account analysis statements Bank Accounts: maintain bank accounts listing, signers and documentation via. Excel spreadsheet Cash Positioning and Forecasting: bank balance data by legal entity in U.S., Canada and Mexico only, prior day and intraday bank balances where applicable, Transaction level detail by transaction type (e.g., investments, confirmed/unconfirmed trades, etc.) Provide support/resources for the following Cash Management processes Daily cash positioning Cash flow forecasting physical cash in bank accounts for U.S., Canada and Mexico only Transaction confirmation / settlement Manage / track interest and principal repayments Opening and closing of bank accounts Manage bank portals Cash flow forecasting Manage I/C loans, LE funding Execute external treasury payments (ACHs, wires) |
$2,250
plus pass- through of direct 3 rd party costs |
3 months | 30 days | ||||||
9.2 |
Treasury Systems: SAP Treasury Cash Management and bank portals: Scope of services include: Treasury support for initial set-up and testing (as well as ongoing testing based on SAP system change requirements or service packs) of separate SAP cash management role, LW Co Code specific TRM0, bank websites, training of new LW Treasury staff, the dual control aspect for execution of an ACH/Wire/FX transaction through the SAP Treasury module or banking websites, as well as monitoring and troubleshooting the daily BAI II file & ACH/Wire bank confirm levels 1, 2 &/or 3 to ensure bank account activity is imported into the general ledger. |
$110 per
hour |
12
months |
30 days |
Page 30 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||||
Wire Vendors & Rep Line Setup: Provide cVend business process support in setting up new AP wire vendors as well as modification of existing wires, deleting or adding new repetitive wires using BP and OT81 and daily monitoring of bank files and confirmations.) |
||||||||||||||||
9.3 |
Interim Treasurer Support Provide one existing employee to serve in an interim leadership role for SpinCo Treasury Services in order to provide SpinCo with additional time to find a qualified person to fill the position of SpinCo Treasurer. Employee takes all direction solely from SpinCo management in provision of Treasury Services. Employee has duties and responsibilities solely with respect to the LW Business and for members of the LW Group. Employee has no duties or responsibilities with respect to the Consumer Foods Business or for any member of the ConAgra Group. Charges for this service are based on pass-through of the existing employees direct costs including salary, pro-rata share of incentives, benefits, employer taxes, and reasonable travel. |
|
Pass
through of employees direct costs including salary, incentives, benefits, claims and travel |
|
3 months | NA | ||||||||||
9.3 |
Light Fleet Vehicle Program: Manage company light fleet vehicle program with Wheels, Inc. Scope of services include CAG Treasury support for initial set-up and testing of two new client IDs (U.S. ~369 vehicles & Canada ~15 vehicles), transferring existing vehicles on the Wheels program prior to close into the new LW program after Spin close, managing relationship with Wheels, Inc. to ensure all assigned drivers and farm/plant locations with pool vehicles receive updated titles & registration, new insurance and fuel cards etc., while maintaining the daily approvals and monitoring of vehicle accidents, maintenance & fuel use. Provide Maintenance Service agreement data Provide support resources to review and approve Maintenance Services Agreement |
|
$2,600 /
month plus pass- through of direct 3 rd party costs |
|
3 months | 30 days |
Page 31 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||||||
9.4 |
Credit Services: Provide support/resources for the Credit Check process Assist in workflow of credit apps and phone training as needed. Scope of services include training LW collections group to implement a best in class credit and risk mitigation department. Transition of the credit responsibilities to LW where they have the tools, recommended procedures, and training to absorb these additional responsibilities. |
$110 /
hour |
3 month | NA | ||||||||||
9.5 |
Insurance Assist in claims activity Transition business continuity plans and processes |
$110 /
hour |
3 month | NA | ||||||||||
9.6 |
Risk Assist in Risk Management functions (systems functionality, not management decisions) Assist with systems maintenance Assist in first quarterly reporting flows |
$110 /
hour |
3 month | NA | ||||||||||
10.0 Corporate Tax | ||||||||||||||
10.1 Sales & Use Tax | ||||||||||||||
10.1.1 |
State and Local Sales/Use Tax Return Support Providing Vertex access (In Appendix 1, LW IT Gold Application list) |
Charged
in IT |
||||||||||||
10.2 1099s |
||||||||||||||
10.2.1 |
1099 Forms Preparation of 1099 forms for calendar 2016 |
TBD | TBD | TBD |
Page 32 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 33 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
ID |
Description of Service (Extendable Services as defined in the
TSA
|
Cost (per
month exc.noted) |
Duration |
Required Notice
for Early Term i nation |
Service Levels |
|||||
11.2 |
Real Estate & Facilities: Provide support/resources to assist in the approval or negotiation of additional build out and leases. Assist in completion of build out projects in Kennewick and Eagle, Continuation of McMunnis lease payment processing if needed |
$110 /
hour plus pass- through of direct costs and travel |
6 months | NA | ||||||
12.0 TSA Program Management | ||||||||||
12.1 |
Program Management and Project Planning * (extension required to coincide with end date of longest duration service) Program Management resources to manage transition projects and resource coordination with LW/Spincos transition team Steering governance |
$10,000
/ month |
12
months |
NA | PMO support for TSA Functions (IT, HR, SC, Finance and overall TSA) |
Page 34 |
TSA Annex B Appendices | ||||||||||||||
Transition Services Agreement Schedule of Services |
12.1 Appendix 1: LW Gold Application List
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application -Infrastructure | Carbon Black Endpoint Protection | TSA | None | |||||
Application | Lockout Pro Enterprise | TSA | None | |||||
Application | Line Events Data System (LEDS) | TSA | None | Pass Thru | ||||
Application | AMAG Badge Security System | TSA | None | |||||
Application | Kronos Workforce Central v 7 | TSA | Logically separate | |||||
Application | Kronos Workforce Central v5.1.22.808 | TSA | None | Pass Thru | ||||
Application | Kronos Enterprise - v5.0.5 (Clocks) | TSA | None | |||||
Application | Workday (628k/annually) | TSA | None | |||||
Application | Intelex | TSA | None | |||||
Application-Infrastructure | BMC Control-M 7.0 | TSA | None | Fixed | ||||
Application-Infrastructure | Incident Management/Remedy Service Now | TSA | None | |||||
Application-Infrastructure | BMC Patrol 7.6 | TSA | None | |||||
Application-Infrastructure | BMC Analytics 4.0 | TSA | None | |||||
Application | IBM EDI VAN replacement of GIS (Gentran Integration Suite) | TSA | None | |||||
Application | ExtendAg/Gradestar | Independent | None | |||||
Application | Decernis | Independent | None |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 36 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application-Infrastructure | WinZip 14.5 | Independent | None | |||||
Infrastructure | SMS 3rd Party Network Support | Independent | None | |||||
Infrastructure | All Data Line & Internet Charges - AT&T | TSA | None | |||||
Infrastructure | Cerium | TSA | None | |||||
Application | LW Sales Discovery System (SDS) | Independent | None | |||||
Application | 1 EDI source | Independent | None | |||||
Application | Conga | Independent | None | |||||
Application | BMI | Independent | None | |||||
Infrastructure | High Speed Scanner | Independent | None | |||||
Application | Maximo 7 - v7.1.18 | Independent | None | |||||
Application | Maximo 4.1.1 | Independent | None | |||||
Application | Minitab | TSA | None | |||||
Application | SAS | Independent | None | |||||
Application | Amphire / ITrade | Independent | None | |||||
Application | Mercer Pension | TSA | None | |||||
Application | SiteHawk MSDS Solution | TSA |
Separate
Contract/License |
Fixed | ||||
Application | BPCS (Intl - Mexico) | TSA | None | |||||
Application | Descartes | Independent | None | |||||
Application-Infrastructure | Xcel | Independent | None | |||||
Application-Infrastructure | VSE | Independent | None | |||||
Application-Infrastructure | Syncsort | Independent | None | |||||
Application | Sample Manager v 10.0 | TSA | None | Fixed | ||||
Application | PFM (Professional Flight Management) | Independent | Extract Data |
Page 37 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Page 38 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | Managed Service - Application | TSA | None | Fixed | ||||
Infrastructure | Managed Service - Infrastructure | TSA | None | |||||
Infrastructure | Managed Service - Security | TSA | None | |||||
Application-Infrastructure | Corel Video Studio Pro | TSA | None | |||||
Application | Microsoft Dynamics AX - App | TSA | None | |||||
Application-Infrastructure | SharePoint 2007 | TSA | None | |||||
Application-Infrastructure | SharePoint 2010 | TSA | None | |||||
Application-Infrastructure | Software - Office 365 | TSA | None | |||||
Infrastructure | LDAP/Active Directory | TSA | None | |||||
Application-Infrastructure | Cafe Portal | TSA | Follow Up | |||||
Application | SAP - Financial Accounting (FI) v6.0 EHP6 | TSA | Logically separate | Fixed | ||||
Application | ACL | Remove | None | |||||
Application | ADP | Independent | None | |||||
Application | Guardian Electronic I9 | Independent | None | |||||
Application | DTM3 - Alarm Lock | Independent | None | |||||
Application | Lamb-Weston ASI | Independent | None | |||||
Application | Sapphire v4.3 | Remove | Extract Data | |||||
Application-Infrastructure | TMON | Independent | None | |||||
Application | Avanti | Independent | None | |||||
Application-Infrastructure | SMS Launcher | Independent | None | |||||
Application-Infrastructure | BlueBeam PDF Revu | Independent | None | |||||
Application | Lockout Pro | Independent | None |
Page 39 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | Chesapeake Unclaimed Property Compliance System | Remove | None | |||||
Application | Infofinder | Remove | Extract Data | |||||
Application | SAP - BW - Business Warehouse | TSA | Logically separate | |||||
Application | My Recipe - SuccessFactors | TSA | None | Fixed | ||||
Application | SAP - ALM | TSA | None | |||||
Application | Attendance | Independent | none | |||||
Application | Bill of Materials | Independent | None | |||||
Application | Budgeting - Account Management System (AMS) | Independent | Testing Required | |||||
Application | Employee Engagement Tracking | Independent | None | |||||
Application | Employee Kiosk | Independent | None | |||||
Application | Grower Accounting | Independent | None | |||||
Application | Grower Portal | Independent | None | |||||
Application | Local HRMS/Payroll | Independent | None | |||||
Application | LW Earth | Independent | None | |||||
Application | Manifest Application Suite | Independent | None | |||||
Application | Overtime Signup | Independent | None | |||||
Application | Pack Plan | Independent | None | |||||
Application | Park Rapids Grade Load | Independent | None | |||||
Application | Park Rapids Grower Accounting | Independent | None | |||||
Application | Park Rapids Scale Tickets | Independent | None | |||||
Application | Quality Assurance Application Suite | Independent | None | |||||
Application | Raw Grading (Management) | Independent | None | |||||
Application | Shift Reporting (OEE) | Independent | None | |||||
Application | Taber Grading | Independent | None | |||||
Application | Taber Grower Accounting | Independent | None |
Page 40 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | Training Tracking | Independent | None | |||||
Application | Unit Cost | Independent | None | |||||
Application | USDA Grading | Independent | None | |||||
Application | SAP - AP/Treasury | TSA | Logically separate | |||||
Application | CIR - Workflow Internally Developed | Remove | Extract Data | |||||
Application | Agrep / grep | Independent | None | |||||
Application | SAP - BOBJ Crystal Reports XI R2 | TSA | Logically separate | |||||
Application | SAP - BOBJ Webi 4.0 | TSA | Logically separate | |||||
Infrastructure | Continuant | Remove | None | |||||
Application | Corp Tax | Remove | None | |||||
Application-Infrastructure | Dell\Quest - Foglight/Spotlight - Performance Analysis for SQL | Independent | None | |||||
Application | DS Collaborate - 7.6 | Independent | None | |||||
Application | DSFM - Demand Solutions Forecast Management - 9.7 | Independent | None | |||||
Application | DSRP - Demand Solutions Requirements Planning - 9.7 | Independent | None | |||||
Application | Demand Solutions Forecast Management (DSFM) and Demand Solutions Replenishment (DSRP) - v 12 | Independent | None | |||||
Application | Enwisen OffBoarding - v1.0 | Remove | None | |||||
Application | Enwisen OnBoarding - v4.5 | Remove | None | |||||
Application | Enwisen Total Rewards Statement - v4.0 | Remove | None | |||||
Application | Visual Importer | Independent | None | |||||
Application | Processor Link - Fidelis | Independent | None | |||||
Application | SAP - Business Planning & Consolidation (BPC) v 7.5 | TSA | Logically separate | |||||
Application | Idera - SQL Admin Toolset | Independent | None | |||||
Application | SAP - CPM | TSA | Logically separate |
Page 41 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | SAP - Data Services | TSA | Logically separate | |||||
Application | SAP - Linkup (Local Check Printing) | TSA | Logically separate | |||||
Application | SAP - MRS Multi Resource Scheduling (MRS) | TSA | None | |||||
Application | SAP - Project Systems/Fixed Assets | TSA | Logically Separate | |||||
Application-Infrastructure | Snag IT | Independent | None | |||||
Application | Secure File Transfer (IPSwitch ws_ftp 12 Professional) | Independent | None | |||||
Application | Edge Chemical Dispensor | Independent | None | |||||
Application | Witness Simulation Software | Independent | None | |||||
Application | LW Colos | Independent | None | |||||
Application | Markem Coders | Independent | None | |||||
Application | SAP - SolMan - Solution Manager | TSA | None | |||||
Application | Visual FoxPro | Independent | None | |||||
Application-Infrastructure | Microsoft Project | Independent | None | |||||
Application-Infrastructure | Microsoft Visio 2010 | Independent | None | |||||
Application-Infrastructure | Microsoft Visual SourceSafe 2005 | Independent | None | |||||
Application | SAP - TREX - NetWeaver Search and Classification | TSA | None | |||||
Application | Managed Service - BPCS (Intl - Mexico) | TSA | None | |||||
Application-Infrastructure | Software - Office 2010 | Independent | None | |||||
Application-Infrastructure | Software - Office 2013 | Independent | None | |||||
Infrastructure |
CONTRACTED LABOR-LW Mainframe Support (InfoSys) |
TSA | None | |||||
Application-Infrastructure | SQL Server Management Studio | Independent | None |
Page 42 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application-Infrastructure | SSAS - SQL Server Analysis Services 2005, 2008, 2012, 2014 | Independent | None | |||||
Application-Infrastructure | SSIS - SQL Server Integration Services 2008 | Independent | None | |||||
Application-Infrastructure | SSRS - SQL Server Reporting Services 2008 | Independent | None | |||||
Application-Infrastructure | Windows SharePoint Services 3.0 | Independent | None | |||||
Application-Infrastructure | Yammer | Remove | Remove LW users | |||||
Infrastructure | Microsoft Azure (Lamb-China) - included in MS EA | Independent | None | |||||
Infrastructure | Microsoft Reporting Services (SSRS) 2008 | Independent | None | |||||
Infrastructure | Network Cost for Infrastructure as a Service (IaaS) | Independent | None | |||||
Application | NetDocuments | Remove | None | |||||
Application | Phoenix Fuel | Independent | None | |||||
Application | Pentaware (PentaSuite) | Independent | None | |||||
Application | Ariba eProcurement | Remove | None | |||||
Application | Ariba eSourcing - SaaS | Remove | None | |||||
Application | SAP - BOBJ Dashboards 4.0 | Remove | Logically separate | |||||
Application | SAP - Xcelsius | Remove | Logically separate | |||||
Application | ScheduleSoft-Lamb Weston | Independent | None | |||||
Application | Send Word Now | Remove | None | |||||
Application | Portfolio Management (Accolade) | Remove | Extract Data | |||||
Application-Infrastructure | Hyena | Remove | None | |||||
Application | SYSTRAN | Independent | None | |||||
Application | Tibersoft | Independent | None | |||||
Application | TimeTrak 10 - timekeeping & scheduling | Independent | None |
Page 43 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | TopsPro | Independent | None | |||||
Application | Tugboat/SOS | Independent | None | |||||
Application | Dairy Comp | Independent | None | |||||
Application | MEI - LW | Independent | None | |||||
Application | Vertex Returns | Remove | None | |||||
Application | Vertex Sales Tax Calculator | Remove | None | |||||
Application-Infrastructure | VMWare Horizon Client | Remove | None | |||||
Application | WinShuttle | Remove | None | |||||
Application | XiBuy | Remove | None | |||||
Application | Teammate | Remove | None | |||||
Application | Zeus for Windows | Independent | None | |||||
Application | CONTRACTED LABOR-Future SAP Ecosystem Support | Independent | None | |||||
Application | SAP - ECC Carve Out - SLO | Independent | None | |||||
Infrastructure | Cloud Services | Independent | None | |||||
Infrastructure | Storage Compute On Prem for Future SAP Ecosystem | Independent | None | |||||
Infrastructure | Cloud Support for ERP - dup | Independent | None | |||||
Application | CONTRACTED LABOR-ASI Staff Aug/SME Legacy Support (T) | Independent | None | |||||
Application | CONTRACTED LABOR-LW Legacy Manufacturing Support (Bill) | Independent | None | |||||
Application | CONTRACTED LABOR-LW Production Support (Bill) | Independent | None | |||||
Application-Infrastructure | Security Implementation | Independent | None | |||||
Infrastructure | Help Desk - Tier Point Outsourced | Independent | None | |||||
Infrastructure | Network/Route/Switch/FireWall | Independent | None | |||||
Infrastructure | EUC (AppV, SCCM) | Independent | None |
Page 44 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Infrastructure | CONTRACTED LABOR-LW Mainframe Support (TCS) | Independent | None | |||||
Infrastructure | Backup Solution | Independent | None | |||||
Infrastructure | Storage Compute On Prem | Independent | None | |||||
Infrastructure | Email/O365 | Independent | None | |||||
Infrastructure | CONTRACTED LABOR-LW Mainframe Support (Sirius) | Independent | None | |||||
Infrastructure | BPCS AS400 (Intl - Mexico) | Independent | None | |||||
Infrastructure | Servers (File/Print) (Intl-Mexico) | Independent | None | |||||
Infrastructure | AS400 Robot (Intl-Mexico) | Independent | None | |||||
Application | cVend\cMat | TSA | None | |||||
Application-Infrastructure | Solera DeepSee (Blue Coat SAP Appliance) | TSA | None | |||||
Application | Convey | TSA | None | Fixed | ||||
Application | Enwisen - Answersource | TSA | None | Fixed | ||||
Application | Workplace | TSA | None | |||||
Application | Kronos 5.2 HTML | TSA | None | |||||
Application | PeopleSoft HR | TSA | None | Fixed | ||||
Application | SimplyWell | TSA | None | |||||
Application-Infrastructure | Dameware Mini Remote | TSA | None | |||||
Application | Vertex Sales Indirect Tax O Series | TSA | None | Fixed | ||||
Application | Vertex Rate Locator 6.0.5.6.1 | TSA | None | |||||
Application | Visier | TSA | None | |||||
Application | GLSU (General Ledger Spreadsheet Uploader) 4.1 | TSA | Logically separate | Fixed | ||||
Application | Quest Stat | Independent | None | |||||
Application | HR: Payroll - PayMatch Maintenance | Independent | None | |||||
Application | PTMS (Property Tax Management System) | Independent | None |
Page 45 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | Certification (aka AssureNet or CAE) 2.1.0 | TSA | Logically separate | |||||
Application-Infrastructure | AppSense | TSA | None | |||||
Application | Astute ePowerCenter | TSA | Follow Up | Fixed | ||||
Application-Infrastructure | Jabber | TSA | None | |||||
Application | Concur | TSA | None | Fixed | ||||
Application-Infrastructure | Damballa Failsafe | TSA | None | |||||
Application | e.CaseTrack | TSA | None | Fixed | ||||
Application-Infrastructure | Cisco Stealthwatch (Lancope Network Monitoring) | TSA | None | |||||
Application-Infrastructure | Cyber-Ark 9 | TSA | None | |||||
Application-Infrastructure | FireEye HX (Mandiant host monitoring tools) | TSA | None | |||||
Application-Infrastructure | Firemon | TSA | None | |||||
Infrastructure | Web Proxying (Bluecoat) 5.4 | TSA | None | |||||
Infrastructure | Firewalls - Palo Alto VSX R67 | TSA | None | |||||
Application-Infrastructure | IBM QRadar | TSA | None | |||||
Application-Infrastructure | WebEx Audio | TSA | None | |||||
Infrastructure | Vendor Remote Access - RAP & Juniper for Vendor QID access | TSA | None | |||||
Application-Infrastructure | GigaMon Network Taps | TSA | None | |||||
Infrastructure | Riverbed HW Maintenance | TSA | None | |||||
Application-Infrastructure | Forensics Software | TSA | None |
Page 46 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application-Infrastructure | FireEye NX | TSA | None | |||||
Application-Infrastructure | Nessus Vulnerability | TSA | None | |||||
Application-Infrastructure | Resilient | TSA | None | |||||
Infrastructure | Load Balancers 2.14.04DL | TSA | None | |||||
Application | SAP - Global Trade Services (GTS) | TSA | None | Fixed | ||||
Infrastructure | Cisco SmartNet - AV 9.3 | TSA | None | |||||
Infrastructure | Tangoes Telecom Expense Management (TEM) service | TSA | None | |||||
Application | Lease Analysis | Independent | None | |||||
Application | EDIX (Intl - Mexico) | TSA | None | Fixed | ||||
Application | AutoCAD Plant Design Suite Ultimate | Independent | None | |||||
Application | AutoDesk NavisWorks Freedom | Independent | None | |||||
Application-Infrastructure | Solarwinds | TSA | None | |||||
Application-Infrastructure | WebEx | TSA | None | |||||
Application-Infrastructure | Adobe Products | Independent | None | |||||
Infrastructure | AV/AVI (simple meeting rooms) | TSA | None | |||||
Application-Infrastructure | Cisco_Security_ELA | TSA | None | |||||
Infrastructure | Dell Software EA | TSA | None | |||||
Infrastructure | DR Mainframe (Hardware Support) | TSA | None | |||||
Infrastructure | Mainframe (Hardware Support) | TSA | None | |||||
Infrastructure | e911 | TSA | None | |||||
Infrastructure | Intrado e911 Server | TSA | None | |||||
Infrastructure | Cell Phones and Cell Cards - Verizon / Sprint / AT&T/ US Cellular | TSA | None |
Page 47 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
LW Gold Application List | ||||||||
RATIONALIZATION | ||||||||
Application Category |
Application Description |
Day 1 Status | Day 1 Work | TSA LW Fixed/Pass Thru | ||||
Application | AutoDesk Sketchbook Designer | Independent | None | |||||
Infrastructure | Telephony - 800, Audi Conf., LD, Local Charges Consolidated | TSA | None | |||||
Application | DWG TrueView | Independent | None | |||||
Infrastructure | Citrix | TSA | None | |||||
Infrastructure | Backup systems and Data Domains Symantec and EMC | TSA | None | |||||
Infrastructure | VMWare EA 5.5 | TSA | None | |||||
Infrastructure | Microsoft Enterprise Agreement (added 3/3/2016) | TSA | None | |||||
Infrastructure | Stratix contract - RF Device Motorola MC9190 (RF devices/Motorola) | TSA | None | |||||
Infrastructure | APC ISX Manager | TSA | None | |||||
Infrastructure | All Data Line & Internet Charges - Level 3 | Independent | None | |||||
Infrastructure | Cisco Call Manager Licenses | TSA | None | |||||
Application | MarkView | TSA |
Logically
separate |
Fixed | ||||
Application | Supplier Express | TSA | None | Fixed | ||||
Application | Synactive - ALM GuiXT | TSA | None | Fixed | ||||
Application-Infrastructure | Trend OfficeScan | TSA | None | |||||
Application | APR spend clarity tool | TSA | None | Fixed |
The parties agree that this list comprising Appendix 1, while lengthy, may not be 100% complete or accurate. As such, references to this Appendix 1 are understood to include all shared applications in use by the Business as of the six (6) month period up to and including the Distribution Date, whether or not specifically identified in this Appendix1.
* | To also include shared applications used by employees in support of LW/Spinco business operations but not referenced in Appendix 1. |
Page 48 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
12.3 Appendix 3: IT Labor Rate Card
Resource |
Rate | |||
Internal Resource |
$TBD / hr | |||
External Resource Onshore |
$TBD / hr | |||
External Resource Offshore |
$TBD / hr |
12.4 Appendix 4: IT Incident Management/Service Request Targets and SLAs - insert InfoSys SLA / service level matrix
The following is a list of service targets and SLAs that are implemented to aid in managing and monitoring incidents and service requests. The service targets drive the number and type of notifications sent to support groups and management when an incident is active. All Break fix / Production Support incidents must be logged in CAG/Parents central incident management tool.
How do service targets and SLAs work?
There are two main types of service targets: Response and Restoration.
| Response measures how fast an incident is accepted/acknowledged by the support group to which it is assigned. The response service target starts calculating when an incident is first assigned to a support group and stops calculating when the incident is assigned to an individual and the status is changed to In Progress. |
| Restoration how fast an incident is resolved by the support group. The restoration service target starts calculating when an incident is first assigned to a support group and stops when the incident is resolved. |
Service targets and SLAs are based on the priority and service type of an incident and generate certain notifications to keep support groups and the Service Desk informed on how an issue is progressing. There are three service types used in Incident Management: User Service Request, User Service Restoration, and Infrastructure Event.
| User Service Restoration - These are break/fix issues initiated by a user |
| Infrastructure Event - These are break/fix issues that are generated by a technical system such as Patrol or Control-M. |
| User Service Request - These are requests for something new such as having new software loaded on a computer or requesting a cell phone. |
The service type assigned to an incident is identified in the service type field located on the classification tab when viewing an incident in Remedy.
Page 49 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
The User Service Request and Infrastructure Event service types generate two service targets; one for response and one for restoration. The User Service Request service type generates one service target for response. Each target has its own goal which is displayed in the SLM tab. The goal is based on the priority of the incident which is outlined in detail below.
What Communications do Service Targets and SLAs Drive?
Service targets drive several communications in the form of pages and email depending on the priority. The specifics for each target are outlined in detail below.
Priority Weight Matrix
Priority is based on a selection of impact and urgency. The CAG/Parent determines and has the final determination of the severity of the incident, i.e. Critical/High/Medium/Low. The below weight matrix is administered behind the scenes in Remedy to enable the 5 base service targets:
Impact |
||||||||||||
Priority Weight |
Excessive/Widespread |
Significant/Large |
Moderate/Limited |
Minor/Localized |
||||||||
Matrix |
100 |
9 |
7 |
1 |
||||||||
Urgency |
Critical | 100 | Critical | High | High | High | ||||||
High | 50 | Critical | High | High | High | |||||||
Medium | 10 | Critical | Medium | Medium | Medium | |||||||
Low | 0 | Critical | Low | Low | Low |
Service Level Matrix
The Acknowledgement Response Time SLA represents the contractual commitment. Acknowledgement Response Time Expectations and the Service Restoration Expectations are considered a measure of user satisfaction. While these measures are not defined as measurable SLAs, the standard of performance is to be consistent with the six months up to and including the Spin.
Assigned Priority Level |
Acknowledgement Response Time SLA |
Service Restoration Expectations |
Priority Definition |
|||
Critical |
100% within 20 minutes 24x7 |
2 hours 24x7 | Significant operational business impact is already realized and immediate resolution is required to minimize effect of the incident | |||
High |
100% within 40 minutes 24x7 |
4 hours 24x7 | Business impact is imminent within 1-2 hours and expeditious resolution is required to avoid affecting business operations |
Page 50 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
Assigned Priority Level |
Acknowledgement Response Time SLA |
Service Restoration Expectations |
Priority Definition |
|||
Medium |
100% within 4 hours 24x7 |
8 hours 24x7 | Business impact is probable within 2-8 hours | |||
Low |
100% within 4 hours (M-F, 8-5pm) |
24 hours (M-F, 8-5pm) | Significant impact is unlikely to result within the next 8-24 hours. The issue should be addressed during normal business hours | |||
Service Requests |
100% within 8 hours (M-F, 8-5pm) |
90% completed successfully by mutually agreed upon date |
Page 51 |
TSA Annex B | ||||||||||||||
Transition Services Agreement Schedule of Services |
12.5 Appendix 5: TSA Governance
Services defined in this TSA shall be governed by a joint LW/Spinco and CAG/Parent Program Management Office. The TSA Board will be led by designated LW/Spinco and CAG/Parent resources that will collaboratively facilitate the governance process.
The TSA Governance Board will:
| Meet regularly (Biweekly initially) |
| Review scorecard of agreed upon metrics through the duration of the TSA |
| Serve as a point of escalation regarding services outlined in the schedule of services |
| Review TSA exit plans |
| Jointly review, approve and prioritize work requests |
| Resolve resource constraints in support approved work |
Parties will define in Transition Planning escalation protocols to ensure material issues are visible and satisfactorily resolved in a timely manner in accordance with service level agreements.
Page 52 |
Exhibit 10.4
TRADEMARK LICENSE AGREEMENT
This Trademark License Agreement (this Agreement ), dated November 8, 2016 (the Effective Date ), is by and between ConAgra Foods RDM, Inc. ( Licensor ), a Delaware corporation, and ConAgra Foods Lamb Weston, Inc., a Delaware corporation ( Licensee ). In this Agreement, Licensor and Licensee are each referred to as a Party and together as the Parties .
RECITALS
1. Licensor is a wholly owned subsidiary of ConAgra Foods, Inc. ( ConAgra ). ConAgra is engaged, directly and indirectly through certain of its subsidiaries, in the LW Business (as such term is defined in the Separation Agreement).
2. Licensor owns goodwill and trademarks including the Licensed Marks (as later defined herein) that are used in both the LW Business and in other businesses in which Licensor is engaged.
3. Licensee is currently a wholly owned subsidiary of ConAgra, and will, following the completion of the LW Transfer (as such term is defined in the Separation Agreement), become a wholly owned subsidiary of Lamb Weston Holdings, Inc., a Delaware corporation ( SpinCo ).
4. SpinCo and ConAgra are Parties to that certain Separation and Distribution Agreement, dated as of the Effective Date (the Separation Agreement ), pursuant to which, SpinCo and ConAgra have agreed to separate ConAgras business into two separate publicly traded companies: (1) ConAgra, which will continue to own and conduct, directly and indirectly, the Retained Business (as such term is defined in the Separation Agreement) and (2) SpinCo, which will own and conduct, directly and indirectly, the LW Business.
5. In connection with the Separation Agreement and related transactions, Licensor wishes to grant Licensee, and Licensee wishes to receive, a license to use the Licensed Marks for use in the LW Business on the terms and conditions set forth herein in exchange for common stock of Licensee.
In consideration of the foregoing and of the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms have the meaning given them in this Article 1. Other capitalized terms have the meanings given them elsewhere in this Agreement.
1.1 Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. For purposes of this definition, control (including, with correlative meanings,
the terms controlling, controlled by and under common control with) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by agreement or otherwise.
1.2 Alexia Marks means the trademarks identified as Alexia Marks in Schedule A attached hereto and the foreign language translations and foreign character equivalents of such trademarks.
1.3 Complementary Marks means the trademarks identified as Complementary Marks in Schedule B attached hereto and the foreign language translations and foreign character equivalents of such trademarks.
1.4 Discontinued Licensed Products means bread, onion rings, mozzarella sticks, and breaded mushrooms using the Licensed Marks.
1.5 IP Allegation means any allegation or claim by any third party that any of the Licensed Marks is invalid or infringes, dilutes or violates the rights of any third party.
1.6 Licensed Marks means the Alexia Marks and Complementary Marks.
1.7 Licensed Products means frozen food products made from potatoes or sweet potatoes, such as french fries, oven fries, waffle fries, crinkle-cut fries, roasted fries, roasted potatoes, potato puffs, chopped and formed potatoes, and hashed browns. Licensed Products also includes frozen potato and vegetable products that are at least 50% potatoes by weight sold by or on behalf of Licensee using the Licensed Marks.
1.8 Marketing Materials means all advertising and marketing materials, including packaging, tags, labels, advertising, marketing, promotions, displays, display fixtures, instructions, technical sheets, user guides, data sheets, warranties, websites and other materials of any and all types, in any format or media, associated with the Licensed Products.
1.9 Material Breach shall have the meaning ascribed in Section 6.3.
1.10 Material Incident means any one of the following: (a) a series of significant quality problems related to the same root cause, demonstrating a potential failure of Licensees quality control system, (b) an unsatisfactory audit conducted by Licensor or its designee, or (c) the loss of a quality certification.
1.11 New Registrations shall have the meaning ascribed in Section 3.4(b).
1.12 Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or other entity or organization or any federal, state, local, provincial, foreign or international court, tribunal, judicial or arbitral body, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority or any national securities exchange.
2
1.13 Promotional Items means items bearing any of the Licensed Marks which are sold or given away in connection with the promotion of Licensed Products or of Licensees corporate identity generally (e.g., pens, mugs, clothing, and comparable items).
1.14 Subsidiary of any Person means another Person (other than a natural Person), of which such Person owns directly or indirectly (a) an aggregate amount of the voting securities, other voting ownership or voting partnership interests to elect a majority of the Board of Directors or other governing body or (b) if there are no such voting interests, 51% or more of the equity interests therein.
1.15 Supplier means a Person that manufactures or packages Licensed Products for the Licensee under a written agreement with the Licensee.
1.16 Term shall have the meaning ascribed in Section 6.1.
1.17 Unauthorized Use means any actual, potential, or threatened infringement, misappropriation, act of unfair competition, or other harmful or wrongful activities by any Person with respect to any of the Licensed Marks.
ARTICLE 2
LICENSE
2.1 Scope of License .
(a) Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, royalty free, revocable right and license to use the Alexia Marks throughout the world during the Term for Licensed Products and on Promotional Items and Marketing Materials related to Licensed Products. Licensor also grants Licensee the limited right to sublicense the Alexia Marks in accordance with the terms of Section 2.4.
(b) Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, royalty free, revocable right and license to use the Complementary Marks throughout the world during the Term for Licensed Products and on Promotional Items and Marketing Materials related to Licensed Products, which Licensed Products also bear one or more of the Alexia Marks. Licensor also grants Licensee the limited right to sublicense the Complementary Marks in accordance with the terms of Section 2.4.
(c) Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, royalty free, revocable right and license to use the Licensed Marks throughout the world for Discontinued Licensed Products and on Promotional Items and Marketing Materials related to Discontinued Licensed Products. The license provided for in this Section 2.1(c) expires six months after
3
the Effective Date for all of the Discontinued Licensed Products other than the onion rings. The license provided for in this Section 2.1(c) related to onion rings expires 12 months after the Effective Date. Licensee will have no right to use the Licensed Marks on the Discontinued Licensed Products after that time.
2.2 Exclusivity . For the avoidance of doubt, Licensor shall not use the Licensed Marks in connection with Licensed Products, but Licensor retains the right to use the Licensed Marks on food products other than Licensed Products, including but not limited to frozen vegetables.
2.3 Use of Licensed Marks in Domain Names and URLs and on Social Media Sites . Licensee has no right to use the Licensed Marks in association with a domain name or URL except as expressly agreed in writing by Licensor. To the extent that Licensee wishes to promote its use of the Licensed Marks through Licensors website or social media sites, Licensee shall make such requests in accordance with Section 4.2 and Licensee shall pay Licensor a fair market value fee for Licensors services related to implementing such requests, including for updating Licensors website or social media sites.
2.4 Right to Sublicense .
(a) Licensee shall not sublicense its rights under this Agreement or grant any third party the right to use the Licensed Marks except as expressly provided in this Section 2.4. No purported sublicense or grant of rights in violation of the preceding sentence will be effective. Licensee shall ensure that any sublicensee (permitted or not) complies with the obligations required to be imposed by the provisions of this Section 2.4. The rights granted by Licensee in an authorized sublicense shall be no greater than those granted to Licensee in this Agreement and described in Sections 2.4(b) and 2.4(c). Each sublicense will terminate upon termination of this Agreement.
(b) Licensee may sublicense to an Affiliate or Supplier the right to use the Licensed Marks for Licensed Products and on Marketing Materials and Promotional Items related to Licensed Products. Such sublicense will not include any right to further sublicense and will not be effective until such Affiliate or Supplier agrees in writing that it is subject to the terms and conditions of this Agreement.
(c) Licensee may grant permission to its distributors and sales representatives to use the Licensed Marks in a limited manner incidental to the promotion and sale of Licensed Products, provided that Licensee enters into a written agreement with such distributors and sales representatives that: (i) permit them to use the Licensed Marks only in a pre-approved manner; (ii) prohibits them from sublicensing or granting any rights in the Licensed Marks; and (iii) reserves all ownership rights in the Licensed Marks to Licensor.
2.5 Consideration for the License . In consideration for Licensors grant of the right and license to use the Licensed Marks as provided herein, Licensee shall issue to Licensor 0.6512 shares of common stock of Licensee (the Licensee Shares ), such
4
that, following the issuance of the Licensee Shares, Licensor shall own, free and clear of all liens, 0.6512 shares of common stock of Licensee, which represent all of the issued and outstanding shares of Licensee.
2.6 Tax Treatment . The Parties intend that, for U.S. federal income tax purposes, the transactions described in this Article 2 be governed by Section 351(a) of the Internal Revenue Code of 1986, as amended.
ARTICLE 3
OWNERSHIP, REGISTRATION AND ENFORCEMENT OF THE LICENSED MARKS
3.1 Ownership of Licensed Marks . Licensee agrees that Licensor is the sole and exclusive owner of all right, title, and interest in and to the Licensed Marks and all the goodwill associated therewith. Licensee further agrees that its use of the Licensed Marks, including all goodwill and any additional value in the Licensed Marks created by such usage of the Licensed Marks, shall inure solely to the benefit of Licensor. Nothing in this Agreement is to be construed as granting to Licensee or retaining by Licensee any right, title or interest in or to the Licensed Marks, other than Licensees rights to use the Licensed Marks in accordance with this Agreement. Licensee also agrees that the Licensed Marks are valid and enforceable. Licensee agrees not to challenge the Licensed Marks, or assist any other Person in doing so. Licensor will maintain the Licensed Marks and pay all fees associated with maintenance of the Licensed Marks. Licensee shall not, at any time during or after the Term, dispute or contest, directly or indirectly, Licensors exclusive right and title to the Licensed Marks or the validity thereof.
3.2 Use by Licensee . Use by Licensee of the Licensed Marks shall qualify as valid use by the Licensor. Licensee shall cooperate in taking any actions reasonably requested by Licensor to establish the use of the Licensed Marks by Licensee and its sublicensees, including signing any document, application, filing or agreement, or providing usage specimens reasonably necessary therefor.
3.3 Modification of Licensed Marks . Licensee shall not alter or modify the Licensed Marks in any way. Licensee agrees that it cannot and will not register, or use, any colorable imitation of any of the Licensed Marks or any mark substantially identical or deceptively or confusingly similar thereto.
3.4 Registration and Maintenance of Trademark Rights .
(a) Generally . Licensor shall be responsible for performing all searches, prosecution or other procurement, registration, and maintenance of the Licensed Marks. Licensor is the sole Party entitled to procure and register the Licensed Marks, including any Licensed Marks added to this Agreement by amendment, and is the sole and exclusive owner thereof; provided, however, that if Licensor fails to maintain in force a registration of a Licensed Mark in use by Licensee or to diligently prosecute an application filed for registration of a new Licensed
5
Mark, Licensee may take reasonable actions at its sole cost and expense to maintain in force a registration for such Licensed Mark or to prosecute the application filed for the new Licensed Mark, and Licensor shall reasonably cooperate with Licensee in connection therewith. If Licensor is not using a Licensed Mark for at least one year and Licensee is using such Licensed Mark during that period, Licensee shall reimburse Licensor for Licensors reasonable costs and fees, including attorneys fees, associated with Licensors searches, prosecution or other procurement, and maintenance of such Licensed Mark during such time that Licensor did not use and continues not to use the Licensed Mark.
(b) New Registrations . If a Licensed Mark is not registered or the subject of a pending application in a country in which Licensee is using or intends to use such Licensed Mark, Licensee may request that Licensor pursue trademark registration by giving written notice to Licensor specifying the Licensed Mark, the country or countries in which registration is sought, and the Licensed Product(s) for which Licensee is using or proposes to use the Licensed Mark. Licensor shall conduct a trademark search and provide a copy of any resulting search report to Licensee. Following its review of such search report, Licensee may request that Licensor apply for registration of the Licensed Mark in one or more of the countries for the Licensed Product(s) identified in the request, and if, based on the trademark search or other information that it shares with Licensee, Licensor does not reasonably perceive a significant risk associated with use or registration of the Licensed Mark, Licensor shall use commercially reasonable efforts to pursue registration ( New Registrations ).
(c) Costs . Licensee shall be responsible for and shall reimburse Licensor for all costs and expenses incurred by Licensor in searching, prosecuting or otherwise procuring, registering and maintaining the New Registrations.
3.5 Protection and Enforcement .
(a) Notice and Consultation . If Licensee becomes aware of any Unauthorized Use with respect to any of the Licensed Marks, Licensee shall promptly notify Licensor in writing and provide relevant information in its possession relating to such Unauthorized Use, and the Parties shall cooperate and consult in good faith regarding appropriate action to address the Unauthorized Use, consistent with the provisions of this Section 3.5.
(b) Routine Preliminary Enforcement . Notwithstanding any other provision of this Section 3.5, to address any Unauthorized Use that Licensee reasonably believes is impairing or are likely to impair Licensees rights with respect to the Licensed Marks, Licensee may pursue administrative proceedings under the ICANN Uniform Domain Name Dispute Resolution Policy, undertake customs enforcement actions, and send communications or notices (e.g., cease and desist letters) to Persons, if Licensee reasonably believes that such action could not reasonably be expected to provide a basis for declaratory judgment jurisdiction. Licensee is not required to obtain the consent of Licensor prior to taking such action but shall keep Licensor promptly informed of the status and results of such action.
6
(c) Enforcement by Licensor . Licensor may take such action as it deems appropriate to protect its rights in the Licensed Marks. Licensor shall consult in good faith with Licensee prior to entering into any settlement, consent judgment, or other voluntary final disposition of any action or proceeding that Licensor reasonably believes would materially impair the rights granted to Licensee under this Agreement. If Licensor commences an action or proceeding arising from Unauthorized Use (a Licensor Action ), Licensor will have the right to control and conduct all negotiations, proceedings, defense and settlement relating to such Licensor Action. The costs associated with and any damages awarded or settlement proceeds recovered in connection with a Licensor Action will be the sole responsibility and property of Licensor. At Licensors expense, Licensee shall provide all assistance reasonably requested by Licensor with respect to such Licensor Action. Licensor may join Licensee as a party to such Licensor Action if, in Licensors reasonable judgment, joining Licensee would be beneficial to the outcome of the Licensor Action.
(d) Enforcement by Licensee . If an Unauthorized Use involves use of the Licensed Marks in connection with products the same as or readily substitutable for the Licensed Products, and if such Unauthorized Use persists and Licensor does not commence an action or proceeding under Section 3.5(c) within a reasonable time, Licensee shall have the right to undertake an action or proceeding to address such Unauthorized Use after consulting in good faith with Licensor regarding Licensees intended undertaking. Licensee promptly shall advise Licensor of Licensees intention to institute any such action or proceeding, and shall provide Licensor an opportunity to voluntarily join in such action or proceeding at Licensors expense. If Licensor voluntarily joins in any such action or proceeding, any damages awarded or settlement proceeds recovered shall be allocated between the Parties as specifically provided in the applicable award or settlement, or if not so allocated, then by the Parties in good faith after each Partys out of pocket expenses are satisfied from the proceeds of the award or settlement (pro-rata if there are insufficient funds). If Licensor chooses not to voluntarily join in any such action or proceeding, then at Licensees expense, Licensor shall provide any assistance reasonably requested by Licensee with respect to such action or proceeding, and Licensor shall not oppose the joinder of Licensor by Licensee as a party to such action or proceeding if required by law or the applicable court, agency or other tribunal. Licensee shall not enter into any settlement, consent judgment, or other voluntary final disposition of any such action or proceeding without written approval of Licensor, which shall not be unreasonably conditioned, withheld or delayed.
3.6 Defense and Settlement of IP Allegations .
(a) Notice and Consultation . If Licensee becomes aware of any IP Allegation with respect to any of the Licensed Marks, or if either Party becomes aware of any IP Allegation with respect to any of the Licensed Marks relating to the Licensed Products, then that Party shall promptly notify the other in writing and provide relevant information in its possession relating to such IP Allegation, and the Parties shall cooperate and consult in good faith regarding appropriate action to address the IP Allegation.
7
(b) Resolution by Licensor . Licensor will have exclusive control over the resolution of any IP Allegation, including all negotiations, proceedings, defense and settlement, and specifically including the right to agree to an injunction against further use of any Licensed Mark, provided that no such settlement, consent judgment, or other voluntary final disposition will require any payment by Licensee without Licensees prior written consent. When possible under the circumstances, before agreeing to a settlement, consent judgment, or other voluntary final disposition, Licensor shall advise Licensee regarding any part of such proposed disposition which affects or may reasonably be expected to affect Licensees use of any Licensed Mark, and shall consider in good faith any alternative terms proposed by Licensee to preserve Licensees right to continue to use the Licensed Marks pursuant to this Agreement without interruption.
(c) Resolution by Licensee . If Licensor does not take reasonable action to resolve an IP Allegation within a reasonable period of time following written notice by Licensee: (i) Licensee may assume control over the resolution of such IP Allegation and (ii) Licensee may, among other options, agree to an injunction against further use of any Licensed Mark by Licensee or any of its Affiliates or sublicensees and otherwise settle such IP Allegation with respect to Licensee and its Affiliates and sublicensees, provided that such settlement, consent judgment or voluntary final disposition does not bind or apply to Licensor in any manner without Licensors prior written consent.
(d) Assistance . Subject to the foregoing, each Party shall provide such assistance as the other Party may reasonably request in connection with the defense or settlement of any IP Allegation.
3.7 Management of the Licensed Marks . In furtherance of the protection and preservation of the Licensed Marks, Licensee agrees to cooperate and provide reasonable assistance with the administrative activities involving the Licensed Marks and to comply with all reasonable requests by Licensor to review and evaluate the portfolio of Licensed Marks, including reviews of the current and planned use or abandonment of the Licensed Marks.
3.8 Recordation of Agreement . The Parties recognize that in some countries, it may be necessary or desirable to record or register this Agreement, a registered user agreement or other documentation associated with the licenses granted in this Agreement. If Licensor determines that such filing is necessary or desirable, the Parties shall cooperate with respect to the preparation and filing thereof.
8
ARTICLE 4
QUALITY ASSURANCE
4.1 Quality of Licensed Products .
(a) Licensee shall use the Licensed Marks only in connection with high-quality products and services that comply with all applicable laws and regulations in the jurisdictions in which the Licensed Products are advertised, marketed, manufactured, sold, or distributed. Licensee covenants and warrants that the Licensed Products in connection with which the Licensed Marks are used shall be of at least the quality of similar products sold by Licensor and its Affiliates under the Licensed Marks before the Effective Date.
(b) In connection with the manufacture, packaging, storage, shipment, promotion, distribution, and sale of the Licensed Products, Licensee shall (i) comply with all applicable laws and regulations, (ii) conform to food industry best practices, (iii) not exceed local work hours except for appropriately compensated overtime, (iv) prohibit the use of and not, directly or indirectly, use child labor ( i.e. , a worker of less than 16 years of age or younger than the compulsory age to be in school), (v) not knowingly use prison or forced labor or purchase materials from a Person that uses prison, forced, or child labor, and (vi) not take any other action that would similarly tarnish or otherwise harm the goodwill or reputation of Licensor or the Licensed Marks.
(c) Sampling and Testing . Licensee, its sublicensees and Affiliates must maintain a testing and sampling program for the Licensed Products manufactured or stored at their facilities, sufficient to determine whether Licensed Products meet the requirements of this ARTICLE 4. Licensee must maintain records of its sampling and testing for at least five years.
(d) Samples . Upon request from Licensor, Licensee must provide Licensor with a reasonable number of samples of the Licensed Products for testing and evaluation.
4.2 Use Of The Licensed Marks On Promotional Items and Marketing Materials Related To Licensed Products . Licensee shall use the Licensed Marks on Promotional Items and Marketing Materials only as approved by the Licensor. Licensor hereby approves all forms of Promotional Items and Marketing Materials related to the Licensed Products as used by Licensor before the Effective Date. Before using any of the Licensed Marks on new Promotional Items or Marketing Materials, Licensee shall provide Licensor with written notice of its intention to do so and three samples of the proposed new Promotional Items or Marketing Materials for Licensors approval. Licensor will provide written notice of its disapproval of such new Promotional Items or Marketing Materials within thirty days, or, if no such written disapproval is received by Licensee within that time, the new Promotional Items or Marketing Materials will be deemed approved.
4.3 Monitoring .
(a) Consumer Inquiries . Licensee shall provide information on packages of each Licensed Product to enable consumers to contact Licensee regarding the quality of such Licensed Products. Licensee shall monitor consumer inquiries regarding the Licensed Products bearing the Licensed Marks and provide notice to Licensor of consistent complaints or issues related to quality of such Licensed Products.
9
(b) Recalls . Licensee shall notify Licensor within twenty-four hours of becoming aware of any facts or circumstances that Licensee reasonably believes may require recall of any Licensed Products bearing any of the Licensed Marks and shall keep Licensor timely apprised of: any internal or external investigation of such facts or circumstances, communications with applicable regulatory agencies, and the progress of any recall efforts.
(c) Reporting . Licensee shall submit reports at least quarterly to Licensor in the form agreed to by the Parties from time to time, sufficient for Licensor to confirm the consistent quality of Licensed Products bearing the Licensed Marks.
4.4 Quality-Control Audits . Licensor or its authorized designee may conduct semi-annual quality-control audits to inspect plants, facilities, products or services bearing or associated with the Licensed Marks. In addition, Licensor or its authorized designee may conduct such quality control audits at any time as the result of a Material Incident or introduction of a new sublicensee or facility associated with production, packaging or distribution of Licensed Products bearing the Licensed Marks. A written notice of audit shall be made at least five business days prior to the commencement of the audit. Any audit shall be conducted during regular business hours and in a manner designed to minimize disruption to Licensees normal business activities.
4.5 Independent Inspections . With respect to facilities at which Licensed Products, or ingredients therefor, are manufactured or stored, Licensee agrees to provide Licensor with copies of any and all inspection reports, site visit reports, or the like, generated by Persons other than Licensee personnel. This includes reports generated by any governmental agency.
4.6 Non-Compliance .
(a) Licensee shall promptly notify Licensor of the occurrence of a Material Incident.
(b) If Licensee or any of its Affiliates or permitted sublicensees is not in compliance with the obligations of Section 4.1, or if a Material Incident has occurred (either, a Quality Issue ), Licensor may give Licensee written notice of non-compliance setting forth a description of the nature of the Quality Issue and a requested action for curing the Quality Issue (a Notice of Non-Compliance ). Upon Licensees receipt of a Notice of Non-Compliance, Licensee shall promptly correct the Quality Issue identified therein by enacting the cure mechanisms described in Section 4.7.
4.7 Cure of Non-Compliance .
(a) Cure Plan . Licensee shall act in good faith, using commercially reasonable efforts to cure or otherwise resolve all Quality Issues as soon as practicable. If the Quality Issue identified in a Notice of Non-Compliance cannot reasonably be cured or otherwise resolved within 10 days, Licensee shall submit
10
to Licensor a written plan to correct the Quality Issues ( Cure Plan ) within 10 days following receipt of the Notice of Non-Compliance. Licensee shall include a Cure Plan in any notification it makes to Licensor of a Material Incident.
(b) Initial Cure Period . After Licensee submits its Cure Plan to Licensor, the Parties shall each appoint a representative to promptly review and discuss in good faith the proposed Cure Plan. When Licensor, in its sole discretion, has approved the Cure Plan, Licensee shall have thirty days or such longer period as approved by Licensor on a case-by-case basis, in its sole discretion, in which to cure the Quality Issues.
(c) Failure to Cure; Reinstatement . If the Quality Issues have not been cured within the time period provided for in the Cure Plan, then such Quality Issues shall be deemed to be uncured ( Uncured Quality Issues ). Licensee shall cease use of the Licensed Marks on, or in connection with, any Licensed Products that are the subject of the Uncured Quality Issues as soon as reasonably practicable but no later than ninety days following the date on which such Quality Issues are determined to be Uncured Quality Issues. During such time, Licensee may not create, manufacture, produce, distribute or otherwise use any Marketing Materials or Promotional Items bearing any Licensed Marks in connection with Licensed Products that are associated with the Uncured Quality Issues.
(d) Continuing Efforts to Cure . Unless the Agreement has terminated as provided in ARTICLE 6, Licensee may continue its efforts toward completing the cure following a failure described in Section 4.7(c), and if the Quality Issues are cured to the reasonable satisfaction of Licensor, then Licensees rights to use the Licensed Marks shall be reinstated from that date forward.
4.8 Sublicensees . For the avoidance of doubt, the obligations of Licensee and the rights of Licensor under this ARTICLE 4 apply equally with respect to any sublicensee of Licensee. Nothing in this ARTICLE 4 shall be deemed to expand the rights of Licensee herein, to limit Licensees obligations hereunder, or to preclude Licensor from pursuing any other rights or remedies.
ARTICLE 5
ASSIGNMENT
5.1 By Licensor . This Agreement shall be freely assignable by Licensor.
5.2 By Licensee . Licensee shall not assign this Agreement or any of Licensees rights or obligations under this Agreement without the express written permission of Licensor, except that Licensee may assign this Agreement to a purchaser of all of the assets of the LW Business. No purported assignment in violation of the preceding sentence will be effective. No assignment will be effective until the assignee agrees in writing to be bound by the terms and conditions of this Agreement.
11
ARTICLE 6
TERM AND TERMINATION
6.1 Term . The Term of this Agreement shall begin on the Effective Date and shall continue perpetually, unless this Agreement is earlier terminated as set forth as provided in this ARTICLE 6 (the Term ).
6.2 Termination By Licensee . Licensee may terminate this Agreement by giving written notice to Licensor effective on the date of such written notice or on a specified date no later than six months following the date of the notice. Licensee shall cease all use of the Licensed Marks by the date of termination indicated in the notice.
6.3 Termination By Licensor For Material Breach . Licensor may terminate this Agreement upon a Material Breach of this Agreement by Licensee if such Material Breach remains uncured or otherwise unresolved for a period of 30 days following Licensees receipt of written notice from Licensor describing the breach. A Material Breach means any of the following:
(a) Licensees failure to comply with any of its obligations under ARTICLE 4 (Quality Assurance) or failure to comply with its obligation to remedy breaches that are not Material Breaches, as required by Section 6.5.
(b) Licensees conduct that Licensor reasonably believes will adversely impact or has adversely impacted the Licensed Marks, the goodwill associated with the Licensed Marks, or the reputation of Licensor;
(c) Licensees use of any Licensed Marks on any product or service other than the Licensed Products or Licensees use of any marks of Licensor other than the Licensed Marks; or
(d) Licensees purported assignment, sublicense or grant of rights in breach of the prohibitions set forth in Section 2.4.
6.4 Upon Licensee Ceasing Use of the Licensed Marks . Licensor may terminate this Agreement immediately upon written notice if Licensee ceases substantially all use of all Licensed Marks or publicly announces its intention to do so. Licensor may not exercise this right if Licensee has previously given a notice under Section 6.2 that specifies an effective date of termination later than the date of the announced intended cessation of use.
6.5 Other Breach . Other than a breach of ARTICLE 4 (Quality Assurance), a Party may provide the other Party with written notice alleging that the receiving Party has breached an obligation under this Agreement. The written notice must set forth with particularity a description of the purported breach and requested actions to remedy the breach. The Party accused of breach in such notice will have 60 days from the date of the notice to cure the breach.
12
6.6 Effect of Termination .
(a) Reversion Rights . Upon the effective date of termination, all of Licensees rights in this Agreement shall immediately revert to Licensor. Licensee and its sublicensees shall promptly cease all use of the Licensed Marks and any marks substantially or confusingly similar variations thereof by the time periods indicated in this Section 6.6 or, in the case of termination by Licensee under Section 6.2, by the date indicated in Licensees notice. For so long as Licensee and its sublicensees continue to use the Licensed Marks, whether or not permitted, they shall comply with all provisions of this Agreement applicable to that use, including but not limited to ARTICLE 4 (Quality Assurance).
(b) Time Periods . Upon termination under Section 6.3, Licensee shall, and shall cause all sublicensees to: (i) as soon as reasonably practical, but no later than 30 days following the effective date of termination, cease producing or manufacturing Licensed Products, Marketing Materials, and Promotional Items using or bearing any of the Licensed Marks; (ii) as soon as reasonably practical, commence the actions described in paragraph 6.6(c) for domain names; and (iii) as soon as reasonably practical, but no later than 90 days following the effective date of the termination, cease all use of the Licensed Marks, including using, selling or otherwise distributing Licensed Products, Marketing Materials, Promotional Items or any other item bearing or using any of the Licensed Marks, regardless of when produced or manufactured.
(c) Upon termination of this Agreement for any reason, Licensee shall take all necessary steps to transfer promptly to Licensor the registrations for all domain names containing the Licensed Marks or marks confusingly similar thereto registered to Licensee or within its power, possession or control.
ARTICLE 7
INDEMNIFICATION
7.1 By Licensee . Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates and its and their successors, legal representatives or assigns, and their respective officers, agents, employees and representatives (collectively, Licensor Indemnitees ), from and against all damages, liabilities, losses, costs and expenses of any and every nature or kind whatsoever, (including reasonable attorneys fees and disbursements and all amounts paid in investigation, defense or settlement of the foregoing) (collectively, Damages ) that any of the Licensor Indemnitees may incur as a result of third-party actions, proceedings, or claims arising out of or in consequence of: (a) the formulation, manufacture, production, packaging, transportation, storage, performance, marketing, merchandising, promotion, advertisement, distribution, or sale of any product, material, or service by or on behalf of Licensee, its Affiliates or its sublicensees that bear, use, or are associated with the Licensed Marks, including, without limitation, any Licensed Product, under any theory of including without limitation product liability, tort, or otherwise; (b) any breach of this Agreement by Licensee; (c) use of the Licensed Marks by Licensee or its Affiliates or their employees, agents, or sublicensees in a manner that infringes the rights of any third party; and (d) any failure by Licensee or its Affiliates or their employees, agents, or sublicensees to comply with applicable law in connection with this Agreement.
13
7.2 By Licensor . Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates and its and their successors, legal representatives or assigns, and their respective officers, agents, employees and representatives (collectively Licensee Indemnitees ), from and against all Damages that any of the Licensee Indemnitees may incur as a result of third-party actions, proceedings, or claims to the extent arising out of or in consequence of: (a) the formulation, manufacture, production, packaging, transportation, storage, performance, marketing, merchandising, promotion, advertisement, distribution or sale of any product, material or service by or on behalf of Licensor, its Affiliates or its licensees (other than Licensee or its Affiliates or their sublicensees) that bear or use the Licensed Marks, including, without limitation under any theory of product liability, tort, or otherwise; (b) any breach of this Agreement by Licensor; (c) use of the Licensed Marks by Licensor or its Affiliates or their employees, agents, or sublicensees in a manner that infringes the rights of any third party; and (d) any failure by Licensor or its Affiliates or their employees, agents or sublicensees to comply with applicable law in connection with this Agreement.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties . Each Party represents and warrants that:
(a) the Party has the full legal right, title, interest, power, and authority to enter into this Agreement and to perform its legal obligations hereunder, and has taken all necessary action to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;
(b) this Agreement has been duly executed and delivered on behalf of the Party and constitutes a legal, valid, binding obligation, enforceable against the Party in accordance with its terms; and
(c) to the best of the Partys knowledge and belief, the execution and delivery of this Agreement and the performance of the Partys obligations hereunder do not conflict with or violate any requirement of applicable laws or regulations and do not conflict with, or constitute a default under, any contractual obligation of the Party.
ARTICLE 9
DISCLAIMER OF WARRANTIES
9.1 Disclaimer . NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE LICENSES GRANTED IN THIS AGREEMENT TO LICENSEE ARE GRANTED ON AN AS IS BASIS WITH NO REPRESENTATIONS OR
14
WARRANTIES OF ANY KIND, AND LICENSOR, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY EXCLUDES AND DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE LICENSES AND LICENSED MARKS, INCLUDING THOSE REGARDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ENFORCEABILITY, AND NON-INFRINGEMENT, AND ANY WARRANTIES IMPLIED BY ANY COURSE OF DEALING OR TRADE USAGE.
ARTICLE 10
CONFIDENTIALITY
10.1 Certain terms and conditions of this Agreement and the information disclosed by or on behalf of one Party to the other Party in connection with the performance of this Agreement constitute Confidential Information .
10.2 Each Party:
(a) shall hold, and shall cause its Affiliates and the officers, directors, employees and agents of any of them to hold, all Confidential Information of the other Party in strict confidence, exercising at least the same degree of care that it applies to its own business sensitive and proprietary information; and
(b) shall not disclose, and shall cause its Affiliates and the officers, directors, employees and agents of any of them to not disclose, the other Partys Confidential Information to any other Person, except as expressly permitted in this ARTICLE 10.
10.3 The obligations of the foregoing Section 10.2 will not apply:
(a) to the extent that disclosure is compelled by subpoena or other compulsory disclosure notice from a governmental authority or, in the opinion of the receiving Partys counsel, by other requirements of law, but only after compliance with Section 10.4;
(b) to the extent the receiving Party can show that the Confidential Information was (a) in the public domain through no fault of such Party, its Affiliates, or any of the officers, directors, employees or agents of any of them; (b) later lawfully acquired from other sources by such Party, which sources are not themselves bound by a confidentiality obligation; or (c) independently generated without reference to any proprietary or confidential information of the disclosing Party; or
(c) to the receiving Partys directors, officers, employees, agents, accountants, counsel and other advisors and representatives who (a) need to know such information for legitimate business purposes, and (b) have been advised of the confidentiality obligations in this ARTICLE 10.
15
10.4 If a Party receives a subpoena or other compulsory disclosure notice from a governmental authority requesting disclosure of Confidential Information that is subject to the confidentiality provisions of this Article, such Party shall promptly provide to the other Party a copy of the notice and an opportunity to seek reasonable protective arrangements. If such appropriate protective arrangements are not obtained, the Party that is required to disclose such information shall furnish, or cause to be furnished, only that portion of such Confidential Information that is legally required to be disclosed and shall use reasonable efforts to ensure that confidential treatment is accorded such information.
ARTICLE 11
GENERAL TERMS
11.1 Performance . Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations to be performed by any Subsidiary of such Party under this Agreement.
11.2 Counterparts . This Agreement may be executed in multiple counterparts (any one of which need not contain the signatures of more than one Party), each of which will be deemed to be an original but all of which taken together will constitute one and the same agreement. This Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party, the other Party will re-execute original forms thereof and deliver them to the requesting Party.
11.3 Entire Agreement . This Agreement, including its Schedules, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior negotiations, agreements, and understandings of the Parties of any nature, whether oral or written, with respect to such subject matter.
11.4 Force Majeure . If any Person is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, walkout, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, equipment failure, any Law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any legal or regulatory authority, riot, civil commotion, war, rebellion, act of terrorism, nuclear or other accident, explosion, casualty, pandemic, or act of God, or act, omission or delay in acting by any governmental authority, in each case, that is beyond the reasonable control and without the fault of such Party (it being understood and agreed by the Parties that any events for which a reasonable provider of similar services or a reasonable user of similar services would have adequate contingencies to avoid such events shall not, under any circumstances, be considered beyond the reasonable control of a Person), then upon notice from one Party to the other Party, the affected provisions and/or other requirements of this Agreement shall be suspended
16
during the period of such disability and, unless otherwise set forth herein to the contrary, the affected Party shall have no liability to the other Party in connection therewith. The affected Party shall use Commercially Reasonable Efforts (as defined in the Separation Agreement) to promptly remove such disability as soon as possible; provided, however, that nothing in this Section 11.4 will be construed to require the settlement of any strike, walkout, lockout or other labor dispute on terms which, in the reasonable judgment of the affected Party, are contrary to its interest. It is understood that the settlement of a strike, walkout, lockout or other labor dispute will be entirely within the discretion of affected Party. Upon becoming aware of a disability causing a delay in performance or preventing performance of any obligations under this Agreement, the affected Party shall promptly notify the other Party in writing of the existence of such disability and the anticipated duration of the disability.
11.5 Severability . The Parties agree that (a) the provisions of this Agreement will be severable in the event that for any reason whatsoever any of the provisions hereof are invalid, void or otherwise unenforcable, (b) any such invalid, void or otherwise unenforceable provisions will be replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (c) the remaining provisions will remain valid and enforceable to the fullest extent permitted by applicable law.
11.6 No Third Party Beneficiaries . Except as otherwise provided in ARTICLE 7 (Indemnification), this Agreement is solely for the benefit of the Parties and their respective successors and permitted assigns and does not confer on third parties any remedy, claim, reimbursement, claim of action or other right in addition to those existing without reference to this Agreement.
11.7 Amendments and Waivers .
(a) This Agreement may be amended and any provision of this Agreement may be waived; provided, however, that any such amendment or waiver, as the case may be, is in writing and signed, in the case of an amendment, by the Parties or, in the case of a waiver, by the Party against whom the waiver is to be effective. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.
(b) No delay or failure in exercising any right, power or remedy hereunder will affect or operate as a waiver thereof, nor will any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or any other right, power or remedy.
17
11.8 Construction . The descriptive headings herein are inserted for convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. References in this Agreement to any document, instrument or agreement (including this Agreement) includes and incorporates all exhibits, disclosure letters, schedules and other attachments thereto. Unless the context otherwise requires, any references to a Section or Article will be to a Section or Article of this Agreement. The use of the words include or including in this Agreement will be deemed to be followed by the words without limitation. The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days means calendar days unless specified as business days. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such consent in its sole and absolute discretion, the parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
11.9 No Agency . This Agreement is not be deemed or construed to create any partnership, joint venture, principal/agent or any other agency relationship between the Parties.
11.10 Successors and Assigns . This Agreement will be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. The successors and permitted assigns of a Party will include any permitted assignee as well as the successors in interest to such permitted assignee, whether by merger or liquidation, including successive mergers or liquidations, or otherwise.
11.11 Survival . The terms and conditions set forth in Section 6.6 (Effect of Termination), ARTICLE 7 (Indemnification), ARTICLE 9 (Disclaimer of Warranties), ARTICLE 10 (Confidentiality), and ARTICLE 11 (General Terms), including the related definitions set forth in ARTICLE 1, and any other provisions which by their nature are intended to survive termination, shall survive any termination of this Agreement.
11.12 Governing Law and Jurisdiction . This Agreement will be governed by and construed and enforced in accordance with the substantive laws of the State of Delaware, without regard to the conflicts of laws provisions that would cause the laws of another state to apply. Except as expressly contemplated by another provision of this Agreement, the Parties irrevocably consent and submit to the exclusive jurisdiction of federal and state courts located in the State of Delaware.
18
11.13 Notices .
(a) All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to have been duly given (i) upon transmission, if sent by email with confirmation of receipt, (ii) when delivered, if delivered personally to the intended recipient, and (iii) one business day following sending by overnight delivery via an international courier service and, in each case, addressed to a Party at the following address for such Party:
If to Licensor:
ConAgra Foods RDM, Inc.
c/o ConAgra Foods, Inc.
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Attention: Colleen Batcheler
Email: colleen.batcheler@conagra.com
If to Licensee:
ConAgra Foods Lamb Weston, Inc.
c/o Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk J. Spytek
Email: eryk.spytek@conagra.com
(b) A Party may change its address for notice by written notice given in accordance with the foregoing provisions. Notwithstanding the manner of delivery, whether or not in compliance with the foregoing provisions, any notice, demand or other communication actually received by a Party shall be deemed delivered when so received.
[ Signature Page Follows ]
19
IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed this Agreement.
CONAGRA FOODS RDM, INC. | ||
By: | /s/ Carey L. Bartell | |
Name: | Carey L. Bartell | |
Title: | President |
CONAGRA FOODS LAMB WESTON, INC. | ||
By: | /s/ Eryk J. Spytek | |
Name: | Eryk J. Spytek | |
Title: | Vice President & Secretary |
Schedule A
ALEXIA MARKS
[See Attached.]
Schedule A
Alexia Marks
COUNTRY |
REFERENCE # |
FILED |
APP # | REG DT |
REG # |
STATUS |
CLASSES | |||||||||||||||
ALEXIA |
||||||||||||||||||||||
AUSTRALIA |
500628.3841 | 06/22/2012 | 1497950 | 6/22/2012 | 1497950 | REGISTERED | 29, 30 | |||||||||||||||
OWNER: | CONAGARA FOODS LAMB WESTON, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | frozen appetizers consisting primarily of cheese, mushrooms, onions and potatoes; frozen processed vegetables; frozen side dishes consisting primarily of vegetables | |||||||||||||||||||||
30 | breads | |||||||||||||||||||||
BRAZIL |
500628.ALEXIA-BR | PROPOSED | 29, 30 | |||||||||||||||||||
OWNER: | CONAGRA FOODS RDM, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | entire class heading, specifically frozen appetizers consisting primarily of cheese, mushrooms, onions and potatoes; frozen processed vegetables; frozen side dishes consisting primarily of vegetables | |||||||||||||||||||||
30 | entire class heading, specifically breads | |||||||||||||||||||||
CANADA |
500628.240 | 5/7/2002 | 1,140,100 | 10/4/2005 | TMA649,567 | REGISTERED | N/A | |||||||||||||||
OWNER: | CONAGRA FOODS, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
N/A | potato products, namely French fried potatoes and processed potatoes; potato, grain, vegetable and legume based snack foods; potato product, namely French fried potatoes and processed potatoes. | |||||||||||||||||||||
CHINA |
500628.3172 | 3/25/2010 | 8149557 | 4/21/2011 | 8149557 | REGISTERED | 29 | |||||||||||||||
OWNER: | CONAGRA FOODS LAMB WESTON, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | 1. Frozen processed potatoes; 2. Deep frozen vegetables; 3. Cooked vegetables; 4. Dried vegetables; 5. Dehydrated vegetables; 6. Potato crisps; 7. Potato fritters; 8. Potato Flakes; 9. Preserved vegetables; 10. Vegetable-based snack food. | REGISTERED | 30 | |||||||||||||||||||
CHINA |
500628.3175 | 8/18/2010 | 8584424 | 9/7/2011 | 8584424 | REGISTERED | 30 | |||||||||||||||
OWNER: | CONAGRA FOODS LAMB WESTON, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
30 | breads and rolls | |||||||||||||||||||||
DOMINICAN REPUBLIC |
500628.3162 | 12/7/2011 | 2011-29315 | 3/19/2012 | 193819 | REGISTERED | 29 | |||||||||||||||
OWNER: | ConAgra Foods RDM, Inc. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | meat, fish, poultry and game; meat extracts; preserved, frozen, dried and cooked fruits and vegetables; jellies, jams, compotes; eggs, milk and milk products; edible oils and fats; specially potato products, namely, French fried potatoes and potato products. | |||||||||||||||||||||
EUROPEAN UNION (C |
500628.1056 | 5/7/2002 | 2687937 | 5/1/2002 | 2687937 | REGISTERED | 29 | |||||||||||||||
OWNER: | CONAGRA FOODS LAMB WESTON, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | potato products including French fried potatoes, instant potatoes and processed potatoes; potato-based snack foods and chips, grain-based snack foods and chips, vegetable-based snack foods and chips and legume based snack foods and chips | |||||||||||||||||||||
EUROPEAN UNION (C |
500628.3880 |
2/8/2013 |
011559226 | 2/8/2013 |
011559226 |
REGISTERED |
29, 30 | |||||||||||||||
OWNER: | CONAGRA FOODS LAMB WESTON, INC. | |||||||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||||||
29 | frozen processed vegetables; frozen, prepared or packaged side dishes consisting primarily of vegetables; frozen appetizers, namely, processed mushrooms, onion rings, frozen vegetables, and cheese sticks. | |||||||||||||||||||||
30 | breads, rolls and biscuits. |
Page 1
Schedule A
Page 2
Schedule A
COUNTRY |
REFERENCE # |
FILED |
APP # | REG DT |
REG # |
STATUS |
CLASSES | |||||||||||
ALEXIA OVEN BLENDS |
||||||||||||||||||
CANADA |
500628.245 | 4/19/2004 | 1214208 | 5/31/2006 | TMA665325 | REGISTERED | N/A | |||||||||||
OWNER: | CONAGRA FOODS, INC. | |||||||||||||||||
CLASS | DESCRIPTION | |||||||||||||||||
N/A | frozen French fried potatoes |
Page 3
Schedule B
COMPLEMENTARY MARKS
[See Attached.]
Schedule B
Complementary Marks
Exhibit 10.5
EXECUTION VERSION
Published CUSIP Number: 51326UAA1
CREDIT AGREEMENT
Dated as of November 9, 2016
among
LAMB WESTON HOLDINGS, INC.,
as the Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER,
as Guarantors,
BANK OF AMERICA, N.A.,
as Administrative Agent,
GOLDMAN SACHS BANK USA
JPMORGAN CHASE BANK, N.A.
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,
NORTHWEST FARM CREDIT SERVICES, PCA
COOPERATIEVE RABOBANK U.A., NEW YORK BRANCH
MIZUHO BANK, LTD.
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agents,
BANK OF AMERICA, N.A.,
GOLDMAN SACHS BANK USA
JPMORGAN CHASE BANK, N.A.
and
WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS |
1 | |||||||
1.01 |
Defined Terms. |
1 | ||||||
1.02 |
Other Interpretive Provisions. |
39 | ||||||
1.03 |
Accounting Terms. |
40 | ||||||
1.04 |
Rounding. |
40 | ||||||
1.05 |
Times of Day. |
40 | ||||||
1.06 |
Letter of Credit Amounts. |
41 | ||||||
1.07 |
Exchange Rates; Currency Equivalents. |
41 | ||||||
1.08 |
Additional Alternative Currencies. |
41 | ||||||
1.09 |
Change of Currency. |
42 | ||||||
1.10 |
Limited Condition Acquisitions. |
43 | ||||||
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS | 44 | |||||||
2.01 |
Revolving Loans and Term Loans. |
44 | ||||||
2.02 |
Borrowings, Conversions and Continuations of Loans. |
47 | ||||||
2.03 |
Letters of Credit. |
49 | ||||||
2.04 |
Swing Line Loans. |
58 | ||||||
2.05 |
Prepayments. |
60 | ||||||
2.06 |
Termination or Reduction of Revolving Commitments. |
63 | ||||||
2.07 |
Repayment of Loans. |
63 | ||||||
2.08 |
Interest. |
64 | ||||||
2.09 |
Fees. |
64 | ||||||
2.10 |
Computation of Interest and Fees. |
65 | ||||||
2.11 |
Evidence of Debt. |
66 | ||||||
2.12 |
Payments Generally; Administrative Agents Clawback. |
66 | ||||||
2.13 |
Sharing of Payments by Lenders. |
68 | ||||||
2.14 |
Cash Collateral. |
69 | ||||||
2.15 |
Defaulting Lenders. |
70 | ||||||
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY | 72 | |||||||
3.01 |
Taxes. |
72 | ||||||
3.02 |
Illegality. |
77 | ||||||
3.03 |
Inability to Determine Rates. |
77 | ||||||
3.04 |
Increased Costs; Reserves on Eurocurrency Rate Loans. |
78 | ||||||
3.05 |
Compensation for Losses. |
80 | ||||||
3.06 |
Mitigation Obligations; Replacement of Lenders. |
80 | ||||||
3.07 |
Survival. |
81 | ||||||
ARTICLE IV GUARANTY | 81 | |||||||
4.01 |
The Guaranty. |
81 | ||||||
4.02 |
Obligations Unconditional. |
81 | ||||||
4.03 |
Reinstatement. |
82 | ||||||
4.04 |
Certain Additional Waivers. |
83 | ||||||
4.05 |
Remedies. |
83 | ||||||
4.06 |
Rights of Contribution. |
83 | ||||||
4.07 |
Guarantee of Payment; Continuing Guarantee. |
84 | ||||||
4.08 |
Keepwell. |
84 |
i
ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS |
84 | |||||||
5.01 |
Conditions of Initial Credit Extension. |
84 | ||||||
5.02 |
Conditions to all Credit Extensions. |
87 | ||||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES | 88 | |||||||
6.01 |
Organization; Powers. |
88 | ||||||
6.02 |
Authorization; Enforceability. |
88 | ||||||
6.03 |
Governmental Approvals; No Conflicts. |
88 | ||||||
6.04 |
Financial Condition; No Material Adverse Change. |
88 | ||||||
6.05 |
Properties. |
89 | ||||||
6.06 |
Litigation and Environmental Matters. |
89 | ||||||
6.07 |
Compliance with Laws. |
89 | ||||||
6.08 |
Investment Company Status. |
89 | ||||||
6.09 |
Taxes. |
90 | ||||||
6.10 |
ERISA. |
90 | ||||||
6.11 |
Disclosure. |
90 | ||||||
6.12 |
Solvency. |
90 | ||||||
6.13 |
Security Interests in Collateral. |
90 | ||||||
6.14 |
Labor Disputes. |
91 | ||||||
6.15 |
No Default. |
91 | ||||||
6.16 |
Federal Reserve Regulations. |
91 | ||||||
6.17 |
OFAC; Anti-Corruption Laws. |
91 | ||||||
6.18 |
Insurance. |
91 | ||||||
6.19 |
EEA Financial Institutions. |
92 | ||||||
ARTICLE VII AFFIRMATIVE COVENANTS | 92 | |||||||
7.01 |
Financial Statements and Other Information. |
92 | ||||||
7.02 |
Notices of Material Events. |
94 | ||||||
7.03 |
Existence; Conduct of Business. |
94 | ||||||
7.04 |
Payment of Obligations. |
95 | ||||||
7.05 |
Maintenance of Properties. |
95 | ||||||
7.06 |
Books and Records; Inspection Rights. |
95 | ||||||
7.07 |
Compliance with Laws. |
95 | ||||||
7.08 |
Use of Proceeds. |
95 | ||||||
7.09 |
Insurance. |
96 | ||||||
7.10 |
Subsidiary Guarantors; Pledges; Collateral; Further Assurances. |
96 | ||||||
7.11 |
Farm Credit Equities and Security. |
97 | ||||||
7.12 |
Post-Closing. |
98 | ||||||
ARTICLE VIII NEGATIVE COVENANTS | 98 | |||||||
8.01 |
Indebtedness. |
98 | ||||||
8.02 |
Liens. |
101 | ||||||
8.03 |
Fundamental Changes. |
104 | ||||||
8.04 |
Investments, Loans, Advances and Acquisitions. |
105 | ||||||
8.05 |
Asset Sales. |
107 | ||||||
8.06 |
Sale and Leaseback Transactions. |
108 | ||||||
8.07 |
Restricted Payments. |
108 | ||||||
8.08 |
Transactions with Affiliates. |
110 | ||||||
8.09 |
Restrictive Agreements. |
110 |
ii
8.10 |
Prepayments of Specified Indebtedness and Amendments to Specified Indebtedness and Organizational Documents. |
112 | ||||||
8.11 |
Financial Covenants. |
113 | ||||||
8.12 |
Sanctions; Anti-Corruption Laws. |
114 | ||||||
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES | 114 | |||||||
9.01 |
Events of Default. |
114 | ||||||
9.02 |
Remedies Upon Event of Default. |
116 | ||||||
9.03 |
Application of Funds. |
117 | ||||||
ARTICLE X ADMINISTRATIVE AGENT | 118 | |||||||
10.01 |
Appointment and Authority. |
118 | ||||||
10.02 |
Rights as a Lender. |
118 | ||||||
10.03 |
Exculpatory Provisions. |
118 | ||||||
10.04 |
Reliance by Administrative Agent. |
119 | ||||||
10.05 |
Delegation of Duties. |
120 | ||||||
10.06 |
Resignation of Administrative Agent. |
120 | ||||||
10.07 |
Non-Reliance on Administrative Agent and Other Lenders. |
122 | ||||||
10.08 |
No Other Duties; Etc. |
122 | ||||||
10.09 |
Administrative Agent May File Proofs of Claim; Credit Bidding. |
122 | ||||||
10.10 |
Collateral and Guaranty Matters. |
123 | ||||||
10.11 |
Secured Cash Management Agreements and Secured Hedge Agreements. |
124 | ||||||
ARTICLE XI MISCELLANEOUS | 125 | |||||||
11.01 |
Amendments, Etc. |
125 | ||||||
11.02 |
Notices; Effectiveness; Electronic Communications. |
126 | ||||||
11.03 |
No Waiver; Cumulative Remedies; Enforcement. |
129 | ||||||
11.04 |
Expenses; Indemnity; Damage Waiver. |
129 | ||||||
11.05 |
Payments Set Aside. |
131 | ||||||
11.06 |
Successors and Assigns. |
132 | ||||||
11.07 |
Treatment of Certain Information; Confidentiality. |
137 | ||||||
11.08 |
Rights of Setoff. |
138 | ||||||
11.09 |
Interest Rate Limitation. |
139 | ||||||
11.10 |
Counterparts; Integration; Effectiveness. |
139 | ||||||
11.11 |
Survival of Representations and Warranties. |
139 | ||||||
11.12 |
Severability. |
139 | ||||||
11.13 |
Replacement of Lenders. |
140 | ||||||
11.14 |
Governing Law; Jurisdiction; Etc. |
141 | ||||||
11.15 |
Waiver of Jury Trial. |
142 | ||||||
11.16 |
No Advisory or Fiduciary Responsibility. |
142 | ||||||
11.17 |
Electronic Execution of Assignments and Certain Other Documents. |
142 | ||||||
11.18 |
USA PATRIOT Act Notice. |
143 | ||||||
11.19 |
Judgment Currency. |
143 | ||||||
11.20 |
Release of Collateral and Guaranty Obligations. |
143 | ||||||
11.21 |
Entire Agreement. |
144 | ||||||
11.22 |
Acknowledgement and Consent to Bail-In of EEA Financial Institutions. |
144 | ||||||
11.23 |
Waiver of Borrower Rights. |
145 |
iii
SCHEDULES | ||
2.01 | Commitments and Applicable Percentages | |
6.01 | Subsidiaries | |
6.18 | Insurance | |
7.12 | Post-Closing | |
8.01 | Indebtedness Existing on the Closing Date | |
8.02 | Liens Existing on the Closing Date | |
8.04 | Investments Existing on the Closing Date | |
8.09 | Restrictive Agreements Existing on the Closing Date | |
11.02 | Certain Addresses for Notices | |
11.06(e) | Voting Participants | |
EXHIBITS | ||
A-1 | Form of Loan Notice | |
A-2 | Form of Swing Line Loan Notice | |
A-3 | Form of Letter of Credit Report | |
A-4 | Form of Additional L/C Issuer Notice | |
B | Form of Note | |
C | Forms of U.S. Tax Compliance Certificates | |
D | Form of Compliance Certificate | |
E | Form of Joinder Agreement | |
F | Form of Assignment and Assumption | |
G-1 | Form of Permitted Pari Passu Intercreditor Agreement | |
G-2 | Form of Junior Priority Intercreditor Agreement | |
H | Form of Voting Participant Notification |
iv
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of November 9, 2016 among LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ), the Guarantors (defined herein), the Lenders and L/C Issuers (each as defined herein) and BANK OF AMERICA, N.A., as Administrative Agent and Swing Line Lender.
The Borrower has requested that the Lenders provide credit facilities for the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms .
As used in this Agreement, the following terms shall have the meanings set forth below:
Additional Credit Extension Amendment means any amendment to this Agreement and, if applicable, the other Loan Documents establishing any Incremental Term Loan Commitment, Extended Term Loan, Extended Revolving Commitment or additional Revolving Commitment of any Class entered into by the Loan Parties and the Administrative Agent pursuant to Section 2.1 (which shall not require the consent of any Lender other than each Lender providing a Commitment or Loan thereunder and, in the case of a Revolving Commitment, each L/C Issuer and the Swing Line Lender).
Additional L/C Issuer Notice means a notice in substantially the form of Exhibit A-4 .
Administrative Agent means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
Administrative Agent Fee Letter means the fee letter agreement, dated September 23, 2016 among the Borrower, the Administrative Agent and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Administrative Agents Office means, with respect to any currency, the Administrative Agents address and, as appropriate, account as set forth on Schedule 11.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
Administrative Questionnaire means an Administrative Questionnaire in a form approved (such approval not to be unreasonably withheld, conditioned or delayed) by the Administrative Agent.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Agents means the Administrative Agent, the Arrangers, the Co-Syndication Agents and the Co-Documentation Agents.
Aggregate Revolving A Commitments means the Revolving A Commitments of all the Revolving A Lenders. The initial amount of the Aggregate Revolving A Commitments in effect on the Closing Date is $319,148,936.00.
Aggregate Revolving B Commitments means the Revolving B Commitments of all the Revolving B Lenders. The initial amount of the Aggregate Revolving B Commitments in effect on the Closing Date is $180,851,064.00.
Agreement means this Credit Agreement.
Agreement Currency has the meaning specified in Section 11.19 .
Alternative Currency means each of Euro, Sterling, Canadian Dollars and each other currency (other than Dollars) that is approved in accordance with Section 1.08 .
Alternative Currency Equivalent means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as reasonably determined in good faith by the Administrative Agent or the applicable L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.
Applicable Percentage means with respect to any Lender at any time, (a) with respect to such Lenders Revolving A Commitment at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving A Commitments represented by such Lenders Revolving A Commitment at such time; provided that if the commitment of each Lender to make Revolving A Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 9.02 or if the Aggregate Revolving A Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments, (b) with respect to such Lenders Revolving B Commitment at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving B Commitments represented by such Lenders Revolving B Commitment at such time; provided that if the commitment of each Lender to make Revolving B Loans has been terminated pursuant to Section 9.02 or if the Aggregate Revolving B Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments; and (c) with respect to such Lenders Term Loans of any Class at any time, the percentage (carried out to the ninth decimal place) of the outstanding principal amount of Term Loan of such Class held by such Lender at such time. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. The Applicable Percentages shall be subject to adjustment as provided in Section 2.15 .
Applicable Rate means, from time to time, the following percentages per annum, based upon the Consolidated Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 7.01(c) :
Pricing Tier |
Consolidated
Net Leverage Ratio |
Commitment
Fees |
Eurocurrency
Rate Loans and Letter of Credit Fees |
Base Rate
Loans |
||||||||||
1 |
³ 4.75:1.00 | 0.40 | % | 2.25 | % | 1.25 | % | |||||||
2 |
< 4.75:1.00
and ³ 4.00:1.00 |
0.35 | % | 2.00 | % | 1.00 | % | |||||||
3 |
< 4.00:1.00
and ³ 3.25:1.00 |
0.30 | % | 1.75 | % | 0.75 | % | |||||||
4 |
³ 3.25:1.00 | 0.25 | % | 1.50 | % | 0.50 | % |
2
Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Net Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.01(c) ; provided , however , that if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders, Pricing Tier 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall continue to apply until the first Business Day immediately following the date a Compliance Certificate is delivered in accordance with Section 7.01(c) , whereupon the Applicable Rate shall be adjusted based upon the calculation of the Consolidated Net Leverage Ratio contained in such Compliance Certificate. The Applicable Rate in effect from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.01(c) for the Fiscal Quarter ending in February 2017 shall be determined based upon Pricing Tier 2.
Applicable Time means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Administrative Agent or the applicable L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.
Approved Fund means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Arrangers means Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporations or any of its subsidiaries investment banking, commercial lending services or related businesses may be transferred following the Closing Date), Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, in each case, in their capacities as joint lead arrangers and joint bookrunners.
Asset Sale means any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of the Borrower or any Restricted Subsidiary, pursuant to Section 8.05(h) .
Assignment and Assumption means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit F or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.
3
Attributable Indebtedness means with respect to any lease arising from a sale and leaseback transaction pursuant to Section 8.06 (i) with respect to any such lease that creates a Capital Lease Obligation, the Capitalized Lease Obligation thereunder and (ii) with respect to any lease that does not result in a Capital Lease, the principal amount of the Capitalized Lease Obligation that would result if such lease was treated as a Capital Lease (assuming an interest rate for such lease equal to the interest rate applicable to Eurocurrency Rate Loans denominated in Dollars with a three month Interest Period commencing on the date such lease is entered into).
Attributed Principal Amount means, on any day, with respect to any Permitted Receivables Financing entered into by the Borrower or any Restricted Subsidiary, the aggregate amount (with respect to any such transaction, the Invested Amount ) paid to, or borrowed by, such Person as of such date under such Permitted Receivables Financing, minus the aggregate amount received by the applicable Receivables Financier and applied to the reduction of the Invested Amount under such Permitted Receivables Financing.
Audited Financial Statements means the audited consolidated balance sheet of the Lamb Weston business of ConAgra for the Fiscal Year ended May 29, 2016, and the related consolidated statements of income or operations and cash flows of the Lamb Weston business of ConAgra for such Fiscal Year, including the notes thereto.
Auto-Extension Letter of Credit has the meaning specified in Section 2.03(b)(iii) .
Availability Period means (a) with respect to the Revolving A Commitments, the period from and including the Closing Date to the earliest of (i) the Revolving A Credit Maturity Date, (ii) the date of termination of the Aggregate Revolving A Commitments pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each Lender to make Revolving A Loans and of the obligation of the L/C Issuers to make L/C Credit Extensions pursuant to Section 9.02 , and (b) with respect to the Revolving B Commitments, the period from and including the Closing Date to the earliest of (i) the Revolving B Credit Maturity Date, (ii) the date of termination of the Aggregate Revolving B Commitments pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each Lender to make Revolving B Loans pursuant to Section 9.02 .
Available Amount means, at any time, an amount equal to the sum, without duplication, of:
(a) 50% of Consolidated Net Income of the Borrower for the period (taken as a single accounting period but excluding any Fiscal Quarter occurring solely during a Collateral Suspension Period) commencing on the first day of the Borrowers first full Fiscal Quarter commencing after the Closing Date and ending on the last day of the most recent Fiscal Quarter for which financial statements of the Borrower have been delivered pursuant to Section 7.01(a) or (b) ; plus
(b) 100% of the net cash proceeds received by the Borrower (other than from a Subsidiary of the Borrower) from the sale of Qualified Equity Interests following the Closing Date and prior to such time to the extent such proceeds have not been utilized as the basis for any other transaction pursuant to Article VIII hereof; plus
(c) 100% of the net cash proceeds received by the Borrower or a Restricted Subsidiary (other than from the Borrower or a Subsidiary of the Borrower) from the issuance or
4
sale of Indebtedness of the Borrower or a Restricted Subsidiary following the Closing Date and prior to such time to the extent such Indebtedness has been converted into Qualified Equity Interests prior to such time; plus
(d) the aggregate amount of cash returns received by the Borrower or any Restricted Subsidiary from any investments made pursuant to Section 8.04(q) prior to such time (including upon the disposition of any such interest); plus
(e) the fair market value of the Borrowers and its Restricted Subsidiaries investments in any Unrestricted Subsidiary at the time it is designated as a Restricted Subsidiary to the extent the investment in such Unrestricted Subsidiary was made pursuant to Section 8.04(q) ; minus
(f) the aggregate amount of (i) investments made pursuant to Section 8.04(q) , (ii) Restricted Payments made pursuant to Section 8.07(i) and (iii) payments made in respect of Specified Indebtedness pursuant to Section 8.10(a)(ii) , in each case, prior to such time.
Bail-In Action means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
Bail-In Legislation means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
Bank of America means Bank of America, N.A. and its successors.
Base Rate means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its prime rate and (c) the Eurocurrency Rate plus 1.0%. The prime rate is a rate set by Bank of America based upon various factors including Bank of Americas costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
Base Rate Loan means a Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in Dollars.
Board of Directors means, with respect to any Person, the board of directors of such Person (or equivalent governing body) or any committee thereof duly authorized to act on behalf of such board of directors (or equivalent governing body).
Borrower has the meaning specified in the introductory paragraph hereto.
Borrower Materials has the meaning specified in Section 7.01 .
Borrower Rights means all statutory or regulatory rights of a borrower to disclosure of effective interest rates, differential interest rates, review of credit decisions, distressed loan restructuring, rights of first refusal, and such other rights and privileges as may be provided by the Agricultural Credit Act of 1987, 12 U.S.C. §§ 2199-2202e, and the implementing regulations of the Farm Credit Administration, 12 C.F.R. § 617.7000, et seq.
5
Borrowing means a borrowing consisting of simultaneous Loans of the same Class, Type and currency and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by the Lenders pursuant to Section 2.01 .
Business Day means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agents Office with respect to Obligations denominated in Dollars is located and (a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day that is also a London Banking Day; (b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day; (c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and (d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.
Canadian Dollars means the lawful currency of Canada.
Capital Lease means any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.
Capital Lease Obligations means the aggregate principal component of capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP.
Cash Collateralize means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the L/C Issuers or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the applicable L/C Issuer shall agree in their reasonable discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the applicable L/C Issuer. Cash Collateral shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
Cash Equivalents means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
6
(b) investments in (1) commercial paper and variable or fixed rate notes issued by (A) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (B) any bank whose short-term commercial paper rating from S&P is at least A-1 or from Moodys is at least P-1 (any such bank described in this clause (b) being an Approved Bank ) (or by the parent company thereof) or (2) any commercial paper or variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 or better by S&P or P-1 or better by Moodys, and in each case maturing within 270 days from the date of acquisition thereof;
(c) investments in certificates of deposit, bankers acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any Approved Bank;
(d) repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (b) above;
(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moodys and (iii) have portfolio assets of at least $5,000,000,000; and
(f) other investments made for cash management purposes in any jurisdiction outside the United States where the Borrower or its Restricted Subsidiaries conduct business that are classified as cash equivalents in accordance with GAAP.
Cash Management Agreement means any agreement to provide treasury or cash management services, including deposit accounts, overnight draft, credit cards, debit cards, p-cards (including purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services and any Designated Chinese Guarantee Obligations.
Cash Management Bank means the Administrative Agent or any Lender (or Affiliate of the Administrative Agent or a Lender) that is a party to a Cash Management Agreement with a Loan Party or any Restricted Subsidiary on the Closing Date or at the time such Cash Management Agreement is entered into (whether such Person thereafter ceases to be the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender).
CFC means a controlled foreign corporation within the meaning of Section 957(a) of the Internal Revenue Code.
CFC Holdco means a Domestic Subsidiary that has no material assets other than the capital stock of one or more Foreign Subsidiaries that are CFCs.
Change in Law means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for
7
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.
Change of Control means the occurrence of any of the following after the Spin-Off: (1) any person or group (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, directly or indirectly, of more than 35% of the voting power of the capital stock of the Borrower, entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis; or (2) a change of control or similar event occurs with respect to the Borrower under the documentation evidencing any Material Indebtedness. Notwithstanding the foregoing, a Person shall not be deemed to have beneficial ownership of capital stock subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement unless such Person has the right to vote or direct the voting of such capital stock.
Class , when used in reference to any Loan, Borrowing, Lender or Commitment, (a) refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving A Loans, Revolving B Loans, Term A Loans or any Class of Loans established after the Closing Date, (b) refers to whether such Commitment is a Revolving A Commitment, Revolving B Commitment, Term A Loan Commitment or any Class of Commitments established after the Closing Date, and (c) refers to whether such Lender is a Revolving A Lender, Revolving B Lender, Term A Lender or any Lender established under any Class of Commitments or Loans established after the Closing Date, as applicable.
Closing Date means the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 11.01 .
Collateral means a collective reference to all property with respect to which Liens in favor of the Administrative Agent, for the benefit of itself and the other holders of the Obligations, is or is purported to be granted pursuant to and in accordance with the terms of the Collateral Documents. In no event shall Collateral include any Excluded Property.
Collateral Documents means a collective reference to the Security Agreement and other security documents as may be executed and delivered by the Borrower or any Guarantor pursuant to the terms of Section 5.01 , Section 7.10 or any of the Loan Documents.
Collateral Reinstatement Date has the meaning specified in Section 7.10(d) .
Collateral Suspension Period means any period (a) starting on the date on which (i) no Default has occurred and is continuing, (ii) the Borrower has an Investment Grade Rating from each of the Rating Agencies and (iii) a Responsible Officer of the Borrower has delivered a certificate to the Administrative Agent stating that the forgoing conditions are satisfied and requesting that a Collateral Suspension Period commence and (b) ending on the date the Borrower ceased to have an Investment Grade Rating from either of the Rating Agencies.
Commitment means, as to each Lender, the Revolving A Commitment of such Lender, the Revolving B Commitment of such Lender, the Term A Loan Commitment of such Lender and/or any Commitment of an additional Class established following the Closing Date of such Lender.
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
8
Compliance Certificate means a certificate substantially in the form of Exhibit D .
ConAgra means Conagra Brands, Inc., a Delaware corporation, f/k/a ConAgra Foods, Inc.
Connection Income Taxes means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
Consolidated EBITDA means, for any period, for the Borrower and its Restricted Subsidiaries on a consolidated basis, an amount equal to:
(a) Consolidated Net Income for such period plus
(b) other than with respect to clause (iv) below, an amount which, in the determination of Consolidated Net Income for such period, has been deducted for, without duplication: (i) Consolidated Interest Expense, (ii) provision for taxes based on income, profits or capital of the Borrower and its Restricted Subsidiaries, including, without limitation, federal, state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations, (iii) depreciation and amortization expense and all other non-cash charges (including impairment charges), expenses or losses (except for any such expense that (x) requires accrual of a reserve for anticipated future cash payments for any period or (y) represents a write-down of current assets), (iv) (1) pro forma costs savings permitted to be reflected in pro forma financial statements prepared in accordance with Regulation S-X of the Securities Exchange Act of 1934 and (2) the amount of pro forma cost savings, operating expense reductions and synergies (collectively, Cost Savings ) that are reasonably expected by the Borrower to result over the next succeeding four Fiscal Quarter period (calculated as though such Cost Savings had been realized on the first day of such period) as a result of, or in connection with, actions (including Permitted Acquisitions or Dispositions outside the ordinary course of business) consummated during such period or expected to be taken within twelve months, provided that (A) such Cost Savings are reasonably identifiable, quantifiable and factually supportable, (B) the aggregate amount of such Cost Savings added pursuant to this clause (iv)(2) during such period shall not exceed an amount equal to 10% of Consolidated EBITDA for such period (calculated without giving effect to any amounts added back pursuant to this clause (iv)(2)) and (C) such pro forma Cost Savings shall only be added back for quarters ending on or prior to the last day of the fourth full Fiscal Quarter following the applicable action, and in each case described in this clause (iv), no Cost Savings shall be added pursuant to this clause (iv) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period, (v) (1) non-recurring, extraordinary or unusual cash charges, expenses or losses not exceeding $25,000,000 in any four Fiscal Quarter period and (2) all charges, expenses or losses in connection with the Transactions that are incurred or accrued prior to the second anniversary of the Closing Date, (vi) any contingent or deferred payments (including earn-out payments, non-compete payments and consulting payments but excluding ongoing royalty payments) made in connection with any Permitted Acquisition, (vii) the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including any write-offs or amortization of fees and expenses related to Permitted Receivables Financings), (viii) losses from foreign exchange translation adjustments or Swap Contracts during such period, (ix) losses associated with discontinued operations (but only after such operations are no longer owned or operated by the Borrower or a Restricted Subsidiary); (x) acquisition integration costs and fees, including cash severance payments made in connection with acquisitions; (xi) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock
9
subscription or stockholders agreement to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Borrower or net cash proceeds of issuance of Equity Interests of the Borrower; (provided that such net cash proceeds shall not increase the Available Amount) and (xii) the fees and expenses paid to third parties during such period that directly arise out of and are incurred in connection with any Permitted Acquisition, investment, asset disposition, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed, and including transaction expenses incurred in connection therewith) or early extinguishment of Indebtedness to the extent such items were subject to capitalization prior to the effectiveness of Financial Accounting Standards Board Statement No. 141R Business Combinations but are required under such statement to be expensed currently, minus
(c) the following to the extent included in the determination of Consolidated Net Income for such period, without duplication: (i) non-cash credits, income or gains, including non-cash gains from foreign exchange translation adjustments or Swap Contracts during such period (but excluding any non-cash credits, income or gains that represent an accrual in the ordinary course), (ii) any extraordinary or unusual income or gains (including amounts received on early terminations of Swap Contracts), (iii) any federal, state, local and foreign income tax credits and (iv) income associated with discontinued operations (but only after such operations are no longer owned or operated by the Borrower or a Restricted Subsidiary);
provided, that, notwithstanding anything to the contrary contained herein (but subject to adjustments on a Pro Forma Basis for events occurring after the Closing Date), (x) Consolidated EBITDA for the portion of the Fiscal Quarter in which the Closing Date occurs for the period prior to the Closing Date shall be calculated in a manner consistent with the methodology used to calculate the deemed Consolidated EBITDA amounts provided below for each of the Fiscal Quarters ending on the date set forth below, and (y) Consolidated EBITDA shall be deemed to be the amount set forth below opposite such Fiscal Quarter:
Fiscal Quarter |
Consolidated EBITDA | |||
Ended February 28, 2016 |
$ | 170,800,000 | ||
Ended May 29, 2016 |
$ | 157,600,000 | ||
Ended August 28, 2016 |
$ | 171,900,000 |
Consolidated Funded Indebtedness means, as of any date of determination with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, without duplication, the sum of: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term (including the Loans) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) all obligations arising under letters of credit (including standby and commercial), but only to the extent consisting of unpaid reimbursement obligations in respect of drawn amounts under letters of credit; (c) all Capitalized Lease Obligations; (d) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments, and trade debt incurred in the ordinary course of business) which would appear as liabilities on a balance sheet in accordance with GAAP; (e) all Disqualified Equity Interests of such Persons; (f) all Guarantees with respect to outstanding Indebtedness of the type specified in clauses (a) through (e) above of another Person; and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity) in which the Borrower or any of its Restricted Subsidiaries is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person.
10
Consolidated Interest Coverage Ratio means, the ratio, determined as of the end of each Fiscal Quarter of the Borrower for the most-recently ended four Fiscal Quarters, of (a) Consolidated EBITDA to (b) Consolidated Interest Expense paid or payable in cash (and, to the extent not otherwise included in Consolidated Interest Expense, the loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing), all calculated for the Borrower and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP.
Consolidated Interest Expense means, for any period, for the Borrower and its Restricted Subsidiaries on a consolidated basis without duplication, the following (in each case as determined in accordance with GAAP): (a) all interest in respect of Consolidated Funded Indebtedness (including the interest component of synthetic leases, account receivables securitization programs, off-balance sheet loans or similar off-balance sheet financing products) accrued during such period (whether or not actually paid during such period) determined after giving effect to any net payments made or received under interest rate Swap Contracts minus (b) the sum of (i) all interest income during such period and (ii) to the extent included in clause (a) above, the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including write-offs or amortization of fees and expenses related to Permitted Receivables Financings), and amounts paid (or plus any amounts received) on early terminations of Swap Contracts plus (c) the loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing.
Consolidated Net Income for any period means the consolidated net income (or loss) attributable to the Borrower for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person that is not a Restricted Subsidiary, except (i) to the extent such income has actually been distributed in cash to the Borrower or any Restricted Subsidiary during such period and (ii) in the case of the Existing Joint Ventures, for other equity of the Borrower and its Restricted Subsidiaries in the earnings of the Existing Joint Ventures in excess of the amount included pursuant to clause (1)(i) so long as the amount included in this clause (1)(ii) for any period does not exceed 6.0% of Consolidated EBITDA for such period;
(2) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;
(3) the cumulative effect of any change in accounting principles; and
(4) gains and losses from dispositions of assets outside the ordinary course of business or upon early retirement of Indebtedness.
Consolidated Net Leverage Ratio means, on any date, the ratio of (a) Consolidated Funded Indebtedness on such date, minus (i) unrestricted cash and Cash Equivalents of Loan Parties (it being agreed that cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Indebtedness or (y) to the extent proceeds of Indebtedness incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Indebtedness shall be considered unrestricted to the extent the related Indebtedness is included in Consolidated Funded Indebtedness) and (ii) to the extent not prohibited from being distributed to a Loan Party pursuant to any Law, Contractual Obligation or Organization Document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Loan Parties (it being agreed that cash or Cash Equivalents segregated or held in escrow to prepay Indebtedness or to
11
consummate an acquisition shall be considered unrestricted) to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter most recently ended prior to such date for which financial statements have been delivered pursuant to Section 7.01(a) or (b) ).
Consolidated Total Assets means the total assets of the Borrower and its Restricted Subsidiaries on a consolidated basis.
Contractual Obligation means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
Credit Extension means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
Debtor Relief Laws means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
Default means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
Default Rate means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided , however , that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.
Defaulting Lender means, subject to Section 2.15(d) , any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lenders reasonable good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, any L/C Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lenders obligation to fund a Loan hereunder and states that such position is based on such Lenders reasonable good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder ( provided that such Lender shall cease to be a
12
Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or a Bail-In Action or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(d) ) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuers, the Swing Line Lender and each other Lender promptly following such determination.
Designated Chinese Guarantee Obligations means any agreement providing for a Guarantee by the Borrower of the obligations of one or more Restricted Subsidiaries of the Borrower organized under the laws of China that is designated in writing by a Responsible Officer of the Borrower to the Administrative Agent as a Designated Chinese Guarantee Obligation; provided that the Borrower shall not permit the aggregate principal amount of Guarantees of Indebtedness constituting Designated Chinese Guarantee Obligations to exceed RMB450,000,000 at any time.
Designated Jurisdiction means any country or territory to the extent that such country or territory itself is the subject of any Sanction.
Designated Non-Cash Consideration means the fair market value (as determined in good faith by the Borrower) of non-cash consideration received by the Borrower or one of its Restricted Subsidiaries in connection with a Disposition that is so designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent, setting forth such valuation, less the amount of cash or Cash Equivalents received by the Borrower or a Restricted Subsidiary (other than from the Borrower or a Restricted Subsidiary) in connection with a subsequent Disposition of such Designated Non-Cash Consideration.
Disposition has the meaning specified in Section 8.05 .
Disqualified Equity Interests means any Equity Interest that, by its terms (or by the terms of any other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments and the termination or expiration of all outstanding Letters of Credit (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests and other than as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are
13
accrued and payable and the termination of the Commitments and the expiration or termination of all outstanding Letters of Credit (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized), or (c) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time of issuance of such Equity Interests, but only with respect to that portion of the Equity Interests that would satisfy clauses (a) through (c) prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time of issuance of such Equity Interests; provided that (x) if such Equity Interests are issued pursuant to a plan for the benefit of employees of the Borrower or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by the Borrower or its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations and (y) if such Equity Interest is held by any future, present or former employee, director, officer, manager, member of management or consultant (or their respective Affiliates or immediate family members) of the Borrower or any of its Subsidiaries, such Equity Interests shall not constitute Disqualified Equity Interests because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.
Dollar and $ mean lawful currency of the United States.
Dollar Equivalent means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the applicable L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.
Domestic Subsidiary means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.
EEA Financial Institution means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
EEA Member Country means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution Authority means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
Eligible Assignee means any Person that meets the requirements to be an assignee under Sections 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii) ).
Environment shall mean ambient air, indoor air, surface water, groundwater, drinking water, land surface, sediments, and subsurface strata and natural resources such as wetlands, flora and fauna.
14
Environmental Laws means all applicable laws (including the common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, to human health and safety, or the management, Release or threatened Release of any Hazardous Material.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the Environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interests means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Internal Revenue Code, is treated as a single employer under Section 414 of the Internal Revenue Code.
ERISA Event means (a) the occurrence of any reportable event, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure of any Plan to satisfy the minimum funding standard (as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
EU Bail-In Legislation Schedule means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
Euro and EUR mean the single currency of the Participating Member States.
15
Eurocurrency Rate means:
(a) | With respect to any Credit Extension: |
(i) denominated in a LIBOR Quoted Currency, the rate per annum equal to the London Interbank Offered Rate ( LIBOR ) or a comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period;
(ii) denominated in Canadian Dollars, the rate per annum equal to the Canadian Dealer Offered Rate ( CDOR ), or a comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at or about 10:00 a.m. (Toronto, Ontario time) two Business Days prior to the commencement of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent) with a term equivalent to such Interest Period;
(iii) with respect to a Credit Extension denominated in any other Non-LIBOR Quoted Currency (other than Canadian Dollars), the rate per annum as designated with respect to such Alternative Currency at the time such Alternative Currency is approved by the Administrative Agent and the Lenders pursuant to Section 1.06 (a); and
(b) | for any rate calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two Business Days prior to such date for U.S. Dollar deposits with a term of one month commencing that day; |
provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection with any rate set forth in this definition, the approved rate shall be applied in a manner consistent with market practice; provided , further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent; and if the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
Eurocurrency Rate Loan means a Loan that bears interest at a rate based on clause (a) of the definition of Eurocurrency Rate. Eurocurrency Rate Loans may be denominated in Dollars or in an Alternative Currency. All Loans denominated in an Alternative Currency must be Eurocurrency Rate Loans.
Event of Default has the meaning specified in Section 9.01 .
Excluded Property has the meaning set forth in the Security Agreement.
Excluded Subsidiary means (i) any Unrestricted Subsidiary, (ii) any Foreign Subsidiary, (iii) any Subsidiary of a Foreign Subsidiary that is a CFC, (iv) any CFC Holdco, (v) any Subsidiary that is not a Wholly-Owned Restricted Subsidiary, (vi) any Subsidiary that is subject to regulation as an insurance company, (vii) any Receivables Financing SPC, (viii) any Subsidiary acquired after the Closing Date that is prohibited by applicable Law or by any contractual obligation existing at the time of such acquisition
16
thereof (so long as such prohibition is not created in contemplation of such acquisition) from guaranteeing the Obligations, or which would require governmental (including regulatory) consent, approval, license or authorization to provide a guaranty and such consent, approval, license or authorization not has been received after such Subsidiarys commercially reasonable efforts to obtain such consent, approval, license or authorization and (ix) not-for-profit Subsidiaries.
Excluded Swap Obligation means, with respect to any Guarantor, any Swap Obligation if, and only to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant under a Loan Document by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Guarantors failure for any reason to constitute an eligible contract participant as defined in the Commodity Exchange Act (determined after giving effect to Section 4.08 and any and all guarantees of such Guarantors Swap Obligations by other Loan Parties and any keepwell, support or other agreement for the benefit of such Guarantor) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Master Agreement governing more than one Swap Contract, such exclusion shall apply to only the portion of such Swap Obligation that is attributable to Swap Contracts for which such Guaranty or security interest is or becomes illegal.
Excluded Taxes means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13 ) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii) , 3.01(a)(iii) or 3.01(c) , amounts with respect to such Taxes were payable either to such Lenders assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipients failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.
Existing Joint Ventures means Lamb-Weston/Meijer v.o.f., Lamb-Weston/RDO Frozen, CAG Hydro, LLC and Lamb Weston BSW, LLC.
Extended Revolving Commitment means any Revolving Commitments established pursuant to Section 2.01(d) in the form of Extended Revolving Commitments.
Extended Revolving Lender means a Lender with an Extended Revolving Commitment .
Extended Revolving Maturity Date means, with respect to any Extended Revolving Commitment, the final maturity date thereof as specified in the applicable Additional Credit Extension Amendment.
Extended Term Lender has the meaning set forth in Section 2.01(e)(1) .
Extended Term Loan means any Term Loans established pursuant to Section 2.01(e)(1) .
17
Extended Term Maturity Date means, with respect to any Extended Term Loan, the final maturity date thereof as specified in the applicable Additional Credit Extension Amendment.
Extension has the meaning set forth in Section 2.01(e)(1) .
Extension Offer has the meaning set forth in Section 2.01(e)(1) .
Farm Credit Equities has the meaning specified in Section 7.11(a) .
Farm Credit Lender means a lending institution organized and existing pursuant to the provisions of the Farm Credit Act of 1971 and under the regulation of the Farm Credit Administration.
FASB ASC means the Accounting Standards Codification of the Financial Accounting Standards Board.
FATCA means Sections 1471 through 1474 of the Internal Revenue Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury regulations or official interpretations thereof and any agreements entered into pursuant to current Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements entered into in connection with the implementation of such current Sections of the Code (or any such amended or successor version described above).
Federal Funds Rate means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
Fee Letter means each of the Administrative Agent Fee Letter and each fee letter dated as of September 23, 2016 by and between the Borrower and any Arranger.
Financial Officer means the chief executive officer, chief financial officer, principal accounting officer, treasurer or controller of the Borrower (or any other officer reasonably acceptable to the Administrative Agent).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Borrower and its Subsidiaries, which period shall be the annual period ending on the last Sunday in May of each year, as may be changed in accordance with Section 8.03(b) .
Foreign Asset Sale has the meaning specified in Section 2.05(b)(iv) .
Foreign Lender means a Lender that is not a U.S. Person. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
Foreign Recovery Event has the meaning specified in Section 2.05(b)(iv) .
18
Foreign Subsidiary means any Subsidiary that is not organized under the laws of any State of the United States or the District of Columbia.
Form 10 means the registration statement on Form 10 of the Borrower, filed with the SEC on July 13, 2016.
FRB means the Board of Governors of the Federal Reserve System of the United States.
Fronting Exposure means, at any time there is a Defaulting Lender, (a) with respect to any L/C Issuer, such Defaulting Lenders Applicable Percentage of the Outstanding Amount of all L/C Obligations other than L/C Obligations in respect of Letters of Credit issued by such L/C Issuer as to which such Defaulting Lenders participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lenders Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lenders participation obligation has been reallocated to other Lenders in accordance with the terms hereof.
Fund means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
GAAP means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied and as in effect from time to time.
Governmental Authority means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting regulatory capital rules or standards (including, without limitation, the Basel Committee on Banking Supervision or any successor or similar authority thereto).
Guarantor Name Change means ConAgra Foods Lamb Weston, Inc.s name change to Lamb Weston, Inc.
Guarantors means, collectively, (a) each Domestic Subsidiary of the Borrower identified as a Guarantor on the signature pages hereto, (b) each Person that joins as a Guarantor pursuant to Section 7.10 or otherwise, and (c) with respect to (i) obligations under any Secured Hedge Agreement, (ii) obligations under any Secured Cash Management Agreement and (iii) any Swap Obligation of a Specified Loan Party (determined before giving effect to Sections 4.01 and 4.08 ) under the Guaranty, the Borrower (to the extent not the direct obligor with respect thereto).
Guarantee means, 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 Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without
19
limitation keep well agreements, maintenance agreements or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (c) to lease or purchase assets, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guarantee hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.
Guaranty means the Guaranty made by the Guarantors in favor of the Administrative Agent and the other holders of the Obligations pursuant to Article IV .
Hazardous Materials means all substances, materials or wastes of any nature, which can give rise to liability under or that is regulated pursuant to any Environmental Law.
Hedge Bank means a party to a Swap Contract with a Loan Party or any Restricted Subsidiary that is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender on the Closing Date or at the time such Swap Contract is entered into (whether such Person thereafter ceases to be the Administrative Agent or a Lender or any Affiliate of the Administrative Agent or a Lender).
Honor Date has the meaning specified in Section 2.03(c)(i) .
IFRS means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.
Impacted Loans has the meaning specified in Section 3.03(a) .
Incremental Term Loan means any loans made pursuant to any Incremental Term Loan Commitment.
Incremental Term Loan Commitment means, as to any Lender, its obligation to make its portion of an Incremental Term Loan to the Borrower pursuant to Section 2.01(d) in the principal amount set forth in the applicable Additional Credit Extension Amendment.
Incremental Term Loan Maturity Date means the final maturity date for such Incremental Term Loan as set forth in the applicable Additional Credit Extension Amendment.
Indebtedness means, as of any date of determination with respect to any Person, without duplication: (a) the outstanding principal amount of all obligations for borrowed money, whether current or long-term and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made; (b) the maximum amount available to be drawn under letters of credit (including standby and commercial) and bankers acceptances, including unpaid reimbursement obligations in respect of drawn amounts under letters of credit or bankers acceptance facilities; (c) all Attributable Indebtedness and Capitalized Lease Obligations and attributable indebtedness under synthetic leases, account receivables securitization programs, off-balance sheet loans or similar off-balance sheet financing products; (d) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business); (e) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments, and trade
20
debt incurred in the ordinary course of business) which would appear as liabilities on a balance sheet; (f) all Disqualified Equity Interests issued by such Person; (g) all net obligations of such Person under Swap Contracts; (h) all Guarantees with respect to outstanding Indebtedness of the type specified in clauses (a) through (g above of another person; (i) all Indebtedness of the type specified in clauses (a) through (h) above of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; provided that, if such Person has not assumed such obligations, then the amount of Indebtedness of such Person for purposes of this clause (i) shall be equal to the lesser of the amount of the obligations of the holder of such obligations and the fair market value of the assets of such Person which secure such obligations; and (j) all Indebtedness of the types referred to in clauses (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity) in which such Person is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person.
Indemnified Taxes means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
Indemnitee has the meaning specified in Section 11.04(b) .
Information has the meaning specified in Section 11.07 .
Intellectual Property means the Copyrights, Trademarks and Patents (each with the meaning specified in the Security Agreement).
Interest Payment Date means (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the applicable Maturity Date; provided , however , that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the applicable Maturity Date.
Interest Period means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter (or, in the case of a Eurocurrency Rate Loan denominated in Dollars, one week, and subject to availability to all affected Lenders, one week (in the case of a Eurocurrency Rate Loan denominated in any Alternative Currency) or twelve months), as selected by the Borrower in its Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period pertaining to a Eurocurrency Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the applicable Maturity Date.
21
Internal Revenue Code means the Internal Revenue Code of 1986, as amended.
Investment Grade Rating shall exist at any time that the Borrowers long-term non-credit enhanced debt is rated at least Baa3 by Moodys and at least BBB- by S&P (or, if either such Rating Agency shall cease to provide such a rating, an equivalent rating from a replacement Rating Agency).
IRS means the United States Internal Revenue Service.
ISP means, with respect to any Letter of Credit, the International Standby Practices 1998 published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).
Issuer Documents means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the Borrower (or any Subsidiary) or in favor of the applicable L/C Issuer and relating to such Letter of Credit.
Joinder Agreement means a joinder agreement substantially in the form of Exhibit E executed and delivered by a Subsidiary in accordance with the provisions of Section 7.10 or any other documents as the Administrative Agent shall deem appropriate for such purpose.
Judgment Currency has the meaning specified in Section 11.19 .
Latest Maturity Date means, at any time, the then latest Maturity Date of any Loan or Commitment hereunder.
Laws means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case having the force of law.
L/C Advance means, with respect to each Revolving A Lender, such Revolving A Lenders funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage. All L/C Advances shall be denominated in Dollars.
L/C Borrowing means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing of Revolving A Loans. All L/C Borrowings shall be denominated in Dollars.
L/C Credit Extension means, with respect to any Letter of Credit, the issuance thereof or extension (other than an automatic or evergreen extension) of the expiry date thereof, or the increase of the amount thereof.
L/C Issuer means Bank of America, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and each other Lender selected by the Borrower as an L/C Issuer, with such selection to be agreed to by such Lender in its sole discretion and approved by the Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed) and subject to receipt by the Administrative Agent of a fully executed Additional L/C Issuer Notice, in each case, in its capacity as issuer of Letters of Credit hereunder, with each of their respective successors in such capacity.
22
L/C Obligations means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be outstanding in the amount so remaining available to be drawn.
LCA Election has the meaning specified in Section 1.10 .
LCA Test Date has the meaning specified in Section 1.10 .
Lenders means the Revolving A Lenders, the Revolving B Lenders, the Term A Lenders, the Extended Revolving Lenders, the Extended Term Lenders and/or the Incremental Term Loan Lenders, as the context may require.
Lending Office means, as to the Administrative Agent, the Swing Line Lender, the L/C Issuer or any Lender, the office or offices, branch or Affiliate of such Person described as such in such Persons Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent, which office may include any Affiliate of such Person or any domestic or foreign branch of such Person or such Affiliate. Unless the context otherwise requires each reference to any such Person shall include its applicable Lending Office.
Letter of Credit means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder. Letters of Credit may be denominated in Dollars or in an Alternative Currency. Notwithstanding anything to the contrary contained herein, a letter of credit issued by an L/C Issuer other than Bank of America shall not be a Letter of Credit for purposes of the Loan Documents until such time as the Administrative Agent has been notified of the issuance thereof by the applicable L/C Issuer and has confirmed availability under the Aggregate Revolving A Commitments and the Letter of Credit Sublimit with the applicable L/C Issuer.
Letter of Credit Application means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.
Letter of Credit Expiration Date means the day that is thirty days prior to the Revolving A Credit Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).
Letter of Credit Fee has the meaning specified in Section 2.03(h) .
Letter of Credit Report means a report in substantially the form of Exhibit A-3 .
Letter of Credit Sublimit means an amount equal to $100,000,000; provided , however , that with respect to (i) Bank of America, in its capacity as an L/C Issuer, the Letter of Credit Sublimit shall be $25,000,000, (ii) Goldman Sachs Bank USA, in its capacity as an L/C Issuer, the Letter of Credit Sublimit shall be $25,000,000, (iii) JPMorgan Chase Bank, N.A., in its capacity as an L/C Issuer, the Letter of Credit Sublimit shall be $25,000,000 and (iv) Wells Fargo Bank, National Association, in its capacity as an L/C Issuer, the Letter of Credit Sublimit shall be $25,000,000 (with the foregoing limits in clauses (i) through (iv) relating only to Letters of Credit issued by the applicable L/C Issuer) or, in each case, such greater amount as such L/C Issuer may agree (subject to the aggregate $100,000,000 cap specified above). The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving A Commitments.
23
LIBOR has the meaning specified in the definition of Eurocurrency Rate.
LIBOR Quoted Currency means each of the following currencies: Dollars, Euro, Sterling, Yen, and Swiss Franc; in each case as long as there is a published LIBOR rate with respect thereto.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Limited Condition Acquisition means any acquisition, including by means of a merger, amalgamation or consolidation, by the Borrower or one or more of its Restricted Subsidiaries, the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Borrower or its Restricted Subsidiaries to the seller or target if financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement in respect thereof.
Loan means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving A Loan, Revolving B Loan, Swing Line Loan, the Term A Loan, Extended Term Loan or an Incremental Term Loan.
Loan Documents means this Agreement, the Perfection Certificate, each Joinder Agreement, each Note, each Issuer Document, the Collateral Documents, each Additional Credit Extension Amendment and each Fee Letter.
Loan Notice means a notice of (a) a Borrowing of Revolving Loans or a Term Loan, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loan Loans, in each case pursuant to Section 2.02(a) , which shall be substantially in the form of Exhibit A-1 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent) appropriately completed and signed by a Responsible Officer of the Borrower.
Loan Parties means, collectively, the Borrower and each Guarantor.
London Banking Day means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.
Master Agreement has the meaning specified in the definition of Swap Contract.
Material Adverse Effect means (A) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent) or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole; (B) a material impairment of the rights and remedies of the Administrative Agent or any Lender under the Loan Documents, taken as a whole, or of the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents taken as a whole; or (C) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
24
Material Indebtedness means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Contracts, of any one or more of the Borrower and its Restricted Subsidiaries in an aggregate principal amount exceeding $100,000,000. For purposes of determining Material Indebtedness, the obligations of the Borrower or any Restricted Subsidiary in respect of any Swap Contract at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Swap Contract were terminated at such time.
Material Restricted Subsidiary means any Restricted Subsidiary (other than a Receivables Financing SPC) with assets of $10,000,000 or more; provided that if the aggregate amount of assets of all Restricted Subsidiaries (other than a Receivables Financing SPC) that would not be Material Restricted Subsidiaries as a result of the foregoing threshold would exceed $50,000,000, the Borrower will designated such of such Restricted Subsidiaries as selected by the Borrower to be Material Restricted Subsidiaries so that such aggregate threshold for all Restricted Subsidiaries (other than a Receivables Financing SPC) is not exceeded.
Maturity Date means the Revolving A Credit Maturity Date, the Revolving B Credit Maturity Date, the Term A Maturity Date, the Extended Revolving Maturity Date, the Extended Term Maturity Date and/or the Incremental Term Loan Maturity Date, as the context may require; provided , however , that, in each case, if such date is not a Business Day, the applicable Maturity Date shall be the next preceding Business Day.
Maximum Rate has the meaning specified in Section 11.09 .
Minimum Collateral Amount means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of the L/C Issuers with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.14(a)(i) , (a)(ii) or (a)(iii) , an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the applicable L/C Issuer in their reasonable good faith discretion.
Moodys means Moodys Investors Service, Inc. and any successor thereto.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Cash Proceeds means, with respect to any Asset Sale, (a) the cash proceeds received in respect of such Asset Sale including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, net of (b) the sum of (i) all fees and out-of-pocket expenses paid or payable to third parties (other than Affiliates) in connection with such Asset Sale, (ii) the amount of all payments required to be made as a result of such Asset Sale to repay Indebtedness (other than Loans and Indebtedness secured on a pari passu or junior basis to the Loans) secured by such asset and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such Asset Sale occurred or the next succeeding year and that are directly attributable to such Asset Sale (as determined reasonably and in good faith by a Financial Officer).
25
Non-Consenting Lender means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.01 and (b) has been approved by the Required Lenders.
Non-Defaulting Lender means, at any time, each Lender that is not a Defaulting Lender at such time.
Non-Extension Notice Date has the meaning specified in Section 2.03(b)(iii) .
Non-LIBOR Quoted Currency means any currency other than a LIBOR Quoted Currency.
Note means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender to the Borrower, substantially in the form of Exhibit B .
Obligations means all advances to, and debts, liabilities, obligations, covenants and duties of, (a) any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, and (b) any Loan Party or any Restricted Subsidiary under any Secured Cash Management Agreement or Secured Hedge Agreement, in all cases, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided , however , that the Obligations of a Loan Party shall exclude any Excluded Swap Obligations with respect to such Loan Party.
OFAC means the Office of Foreign Assets Control of the United States Department of the Treasury.
Organization Documents means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
Other Connection Taxes means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
Other Taxes means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06 ).
26
Outstanding Amount means (a) with respect to any Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date; and (b) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.
Overnight Rate means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.
Participant has the meaning specified in Section 11.06(d) .
Participant Register has the meaning specified in Section 11.06(d) .
Participating Member State means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
Perfection Certificate means the Perfection Certificate, dated as of the Closing Date, delivered to the Administrative Agent by the Loan Parties in connection with this Agreement.
Permitted Acquisition means (i) any acquisition of all or substantially all the assets or a business unit of any Person by the Borrower or a Restricted Subsidiary and (ii) any acquisition of Equity Interests of any Person (including any Existing Joint Venture) that, following such acquisition, will be a Restricted Subsidiary so long as (x) no Event of Default shall have occurred and be continuing immediately after giving effect thereto or would result therefrom; (y) the Borrower shall be in compliance on a Pro Forma Basis with Section 8.11 immediately after giving effect to such acquisition or investment and any related transactions and (z) the aggregate consideration in respect of all such acquisitions and investments by Loan Parties in assets that are not owned by Loan Parties or in Equity Interests in persons that are not Guarantors or will not become Guarantors in compliance with Section 7.10 (excluding any such investments in connection with acquisitions of Equity Interests of Existing Joint Ventures), shall not exceed the greater of $100,000,000 and 4.5% of Consolidated Total Assets as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) .
Permitted Encumbrances means:
(a) Liens imposed by law for taxes that are not yet delinquent or are being contested in compliance with Section 7.04 ;
(b) carriers, warehousemens, mechanics, materialmens, repairmens, landlords and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 7.04 ;
27
(c) pledges and deposits under workers compensation, unemployment insurance and other social security laws or regulations;
(d) deposits or pledges to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments (or appeal or surety bond relating to such judgments) that do not constitute an Event of Default under Section 9.01(k) ;
(f) easements, zoning restrictions, licenses, title restrictions, rights-of-way and similar encumbrances on real property imposed by law or incurred or granted by the Borrower or any Subsidiary in the ordinary course of business that do not secure any material monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) minor imperfections in title that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of Borrower or any Subsidiary; and
(h) with respect to any Foreign Subsidiary, other Liens arising mandatorily by Law under the laws of the jurisdiction under which such Foreign Subsidiary is organized;
provided that the term Permitted Encumbrances shall not include any Lien securing Indebtedness for borrowed money.
Permitted Intercreditor Agreement means with respect to any Refinancing Debt Securities (or Permitted Refinancing Indebtedness in respect thereof) that (i) is intended to be secured on a pari passu basis with the Obligations, an intercreditor agreement substantially in the form of Exhibit G-1 , or otherwise in form and substance reasonably acceptable to the Administrative Agent, between the Administrative Agent and the holders of such Refinancing Debt Securities (or Permitted Refinancing Indebtedness in respect thereof) or collateral agent therefor and (ii) is intended to be secured on a junior priority basis to the Obligations, an intercreditor agreement substantially in the form of Exhibit G-2 , or otherwise in form and substance reasonably acceptable to the Administrative Agent, between the Administrative Agent and the holders of such Refinancing Debt Securities (or Permitted Refinancing Indebtedness in respect thereof) or collateral agent therefor, in each case, with such changes thereto as may be reasonably agreed between the Borrower and the Administrative Agent.
Permitted Liens means, at any time, Liens in respect of property of the Borrower or any Restricted Subsidiary permitted to exist at such time pursuant to the terms of Section 8.02 .
Permitted Receivables Financing means any one or more receivables financings in which (a) any Loan Party or any Restricted Subsidiary (i) conveys or sells any accounts (as defined in the Uniform Commercial Code as in effect in the State of New York), payment intangibles (as defined in the Uniform Commercial Code as in effect in the State of New York), notes receivable or residuals (collectively, together with certain property relating thereto and the right to collections thereon and any proceeds thereof, being the Transferred Assets ) to any Person that is not a Subsidiary or Affiliate of the Borrower (with respect to any such transaction, the Receivables Financier ), (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets and/or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to the Receivables Financier or (b) any Loan Party or any Restricted Subsidiary
28
sells, transfers, conveys or otherwise contributes any Transferred Assets to a Receivables Financing SPC, which Receivables Financing SPC then (i) conveys or sells any such Transferred Assets (or an interest therein) to another Receivables Financier, (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to such Receivables Financier; provided that, as to either clause (a) or (b), (A) the aggregate Attributed Principal Amount for all such financings shall not at any one time exceed $100,000,000 and (B) such financings shall not involve any recourse to any Loan Party or any Restricted Subsidiary (other than a Receivables Financing SPC) for any reason other than (v) repurchases of non-eligible assets, (w) indemnifications for losses or dilution other than credit losses related to the Transferred Assets, (x) any obligations not constituting Indebtedness under servicing arrangements for the receivables, (y) any interest rate swaps or currency swaps permitted hereunder and entered into in connection with a Permitted Receivables Financing on a back to back basis with swaps entered into by a Receivables Financing SPC or (z) representations, warranties, covenants, indemnities and guarantees of performance entered into by the Borrower or any Restricted Subsidiary which the Borrower has determined in good faith to be customary in a non-recourse receivables financing.
Permitted Refinancing Indebtedness means (x) Indebtedness incurred by the Borrower or any Restricted Subsidiary which serves to extend, replace, refund, refinance, renew or defease ( Refinance ) any Indebtedness of the Borrower or any Restricted Subsidiary, including any previously issued Permitted Refinancing Indebtedness, so long as:
(1) the principal amount of such new Indebtedness does not exceed (a) the principal amount of Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (such Indebtedness, the Refinanced Debt ), plus (b) any accrued and unpaid interest on such Refinanced Debt, plus (c) the amount of any reasonable tender or redemption premium paid thereof or any penalty or premium required to be paid under the terms of the instrument or documents governing such Refinanced Debt and any reasonable costs, fees and expenses incurred in connection with the issuance of such new Indebtedness and the Refinancing of such Refinanced Debt;
(2) such Permitted Refinancing Indebtedness has a:
(a) Weighted Average Life to Maturity at the time such Permitted Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity of the applicable Refinanced Debt; and
(b) final scheduled maturity date equal to or later than the final scheduled maturity date of the Refinanced Debt (or, if earlier, the date that is 91 days after the then Latest Maturity Date);
(3) to the extent such Permitted Refinancing Indebtedness Refinances (a) Indebtedness that is expressly subordinated in right of payment to the Obligations (other than Indebtedness assumed or acquired in an acquisition and not created in contemplation thereof), such Permitted Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the applicable Refinanced Debt, (b) secured by Liens that are subordinated to the Liens securing the Obligations, such Permitted Refinancing Indebtedness is (i) unsecured or (ii) secured by Liens that are subordinated to the Liens that secure the Obligations at least to the same extent as the applicable Refinanced Debt or (c) secured by Liens that are pari passu with the Liens securing the Obligations, such Permitted Refinancing Indebtedness is (i) unsecured or (ii) secured by Liens that are pari passu or subordinated to the Liens that secure the Obligations on no less favorable terms (taken as a whole) to the Lenders than the terms applicable to the Liens securing the Refinanced Indebtedness (taken as a whole);
29
(4) such Permitted Refinancing Indebtedness shall not be secured by any assets or property of the Borrower or any Restricted Subsidiary that does not secure the Refinanced Debt being Refinanced ( plus improvements and accessions thereon and proceeds in respect thereof); and
(5) in the case of Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to clause (f) or (s) of Section 8.01 , the covenants and events of default contained in the agreements governing such Permitted Refinancing Indebtedness are not, taken as a whole, materially more restrictive on the Borrower and its Restricted Subsidiaries (as determined in good faith by a Responsible Officer of the Borrower) than the terms of this Agreement unless the Borrower enters into an amendment to this Agreement with the Administrative Agent (which amendment shall not require the consent of any other Lender) to add such more restrictive terms for the benefit of the Lenders;
provided that (a) Permitted Refinancing Indebtedness will not include Indebtedness of a Restricted Subsidiary of the Borrower that is not a Guarantor that refinances Indebtedness of the Borrower or a Guarantor, and (b) clause (2) of this definition will not apply to any Refinancing of any Indebtedness under Section 8.01(d) .
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Internal Revenue Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Platform has the meaning specified in Section 7.01 .
Pro Forma Basis means, with respect to compliance with any test or covenant hereunder, that all Specified Transactions occurring prior to the end of the applicable measurement period (and, except for purposes of determining whether an Event of Default has occurred and is continuing under Section 8.11 , following the last day of such measurement period and on or prior to the applicable date of determination) and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant and: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a Disposition of all or substantially all Equity Interests in any Subsidiary of the Borrower owned by the Borrower or any of its Subsidiaries or any division or line of business, shall be excluded, and (ii) in the case of a Permitted Acquisition or investment described in the definition of Specified Transaction, shall be included, (b) any retirement of Indebtedness and (c) any Indebtedness incurred or assumed by the Borrower or any of the Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination; provided that, any cost savings adjustments in connection therewith shall be subject to the limitations set forth in clause (b)(iv) of the definition of Consolidated EBITDA.
Public Lender has the meaning specified in Section 7.01 .
30
Qualified ECP Guarantor means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an eligible contract participant under the Commodity Exchange Act and can cause another Person to qualify as an eligible contract participant at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Qualified Equity Interests means any Equity Interests that are not Disqualified Equity Interests.
Rating Agency means each of Moodys and S&P; provided that if either such agency shall cease to provide ratings of the Borrowers long-term non-credit enhanced debt, then such term shall also include any replacement credit ratings agency that is reasonably satisfactory to the Borrower and the Administrative Agent.
Receivables Financier has the meaning set forth in the definition of Permitted Receivables Financing.
Receivables Financing SPC means (1) a wholly-owned direct Subsidiary of a Loan Party which engages in no activities other than in connection with the financing of Transferred Assets pursuant to a Permitted Receivables Financing that meets the following criteria: (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Borrower or any other Subsidiary of the Borrower (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to customary securitization undertakings, (ii) is recourse to or obligates the Borrower or any other Subsidiary of the Borrower in any way (other than pursuant to customary securitization undertakings) or (iii) subjects any property or asset (other than the Transferred Assets) of the Borrower or any other Subsidiary of the Borrower, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to customary securitization undertakings, (b) with which neither the Borrower nor any of its other Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Financing documentation (including with respect to the servicing of the accounts receivable and related assets and the administration of the Receivables Financing SPC)) on terms less favorable to the Borrower or such Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Borrower (as determined by the Borrower in good faith), and (c) to which neither the Borrower nor any other Subsidiary of the Borrower has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results and (2) each general partner of any such Subsidiary described in clause (1) that meets all of the criteria set forth in clause (1).
Recipient means the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.
Recovery Event means the receipt by the Borrower or any of its Restricted Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets.
Refinancing Debt Securities means any debt securities of the Borrower (which may be guaranteed by the Guarantors) issued for cash consideration to the extent that the net cash proceeds therefrom (after payment of fees and expenses in connection with the offering) are applied to prepay Term Loans within three Business Days of receipt thereof; provided that (i) no such portion of such debt securities shall have a scheduled maturity date that is prior to the 91 st day following the Latest Maturity Date at such time, (ii) the covenants and events of default contained in the agreements governing such debt securities are not, taken as a whole, materially more restrictive on the Borrower and its Restricted Subsidiaries (as determined in good faith by a Responsible Officer of the Borrower) than the terms of this Agreement unless the Borrower enters into an amendment to this Agreement with the Administrative
31
Agent (which amendment shall not require the consent of any other Lender) to add such more restrictive terms for the benefit of the Lenders, (iii) such debt securities shall not be guaranteed by any Subsidiary of the Borrower that is not a Loan Party and (iv) such debt securities shall either be unsecured or, pursuant to a Permitted Intercreditor Agreement, shall be secured on a pari passu basis with the Obligations or a junior priority basis to the Obligations.
Refinancing Term Loans means Incremental Term Loans that are designated as Refinancing Term Loans in the applicable Additional Credit Extension Amendment; provided that the Borrower applies an amount equal to the net cash proceeds therefrom within three Business Days of receipt to prepay Term Loans.
Register has the meaning specified in Section 11.06(c) .
Related Parties means, with respect to any Person, such Persons Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Persons Affiliates.
Release means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the Environment or within, from or into any building structure, facility or fixture.
Removal Effective Date has the meaning specified in Section 10.06(b) .
Request for Credit Extension means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
Required Lenders means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or the applicable L/C Issuer, as the case may be, in making such determination. With respect to any matter requiring the approval of the Required Lenders, it is understood that Voting Participants shall have the voting rights specified in Section 11.06(e) as to such matter.
Required Revolving A Lenders means, at any time, Revolving A Lenders holding more than 50% of the Outstanding Amount of all outstanding Revolving A Loans, unutilized Revolving A Commitments and participations in L/C Obligations and Swing Line Loans. The Revolving A Loans, unutilized Revolving A Commitment and participations in L/C Obligations and Swing Line Loans of any Defaulting Lender shall be disregarded in determining Required Revolving A Lenders at any time; provided that the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Revolving A Lender shall be deemed to be held by the Revolving A Lender that is the Swing Line Lender or L/C Issuer, as the case may be, in making such determination.
Resignation Effective Date has the meaning specified in Section 10.06(a) .
Responsible Officer means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party (or any other officer reasonably acceptable to
32
the Administrative Agent), and, solely for purposes of the delivery of incumbency certificates, the secretary or any assistant secretary of a Loan Party (or any other officer reasonably acceptable to the Administrative Agent) and, solely for purposes of notices given pursuant to Article II , any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
Restricted Payment means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests of the Borrower or any Restricted Subsidiary.
Restricted Subsidiaries means the Subsidiaries of the Borrower other than the Unrestricted Subsidiaries.
Revaluation Date means (a) with respect to any Loan, each of the following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in an Alternative Currency pursuant to Section 2.02 , and (iii) such additional dates as the Administrative Agent shall in good faith reasonably determine or the Required Revolving A Lenders shall in good faith reasonably require; and (b) with respect to any Letter of Credit, each of the following: (i) each date of an issuance or extension of a Letter of Credit denominated in an Alternative Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof, (iii) each date of any payment by an L/C Issuer of any Letter of Credit denominated in an Alternative Currency, and (iv) such additional dates as the Administrative Agent or the applicable L/C Issuer shall in good faith reasonably determine or the Required Revolving A Lenders shall in good faith reasonably require.
Revolving A Commitment means, as to each Revolving A Lender, its obligation to (a) make Revolving A Loans to the Borrower pursuant to Section 2.01 , (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Revolving A Lenders name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Revolving A Lender becomes a party hereto or in any documentation executed by such Revolving A Lender pursuant to Section 2.01(f) , as applicable as such amount may be adjusted from time to time in accordance with this Agreement.
Revolving A Credit Exposure means, as to any Revolving A Lender at any time, the aggregate Outstanding Amount at such time of its Revolving A Loans and such Lenders participation in L/C Obligations and Swing Line Loans at such time.
Revolving A Credit Maturity Date means November 9, 2021.
Revolving A Lender means any Person that has a Revolving A Commitment or portion of the Total Revolving A Outstandings, each other Person that becomes a Revolving A Lender in accordance with this Agreement and their successors and assigns and, unless the context requires otherwise, includes the Swing Line Lender.
Revolving A Loan has the meaning specified in Section 2.01(a) .
33
Revolving B Commitment means, as to each Revolving B Lender, its obligation to make Revolving B Loans to the Borrower pursuant to Section 2.01 , in an aggregate principal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Revolving B Lenders name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Revolving B Lender becomes a party hereto or in any documentation executed by such Revolving B Lender pursuant to Section 2.01(f) , as applicable as such amount may be adjusted from time to time in accordance with this Agreement.
Revolving B Credit Maturity Date means November 9, 2021.
Revolving B Lender means any Person that has a Revolving B Commitment or portion of the Outstanding Amounts of the Revolving B Loans, each other Person that becomes a Revolving B Lender in accordance with this Agreement and their successors and assigns.
Revolving B Loan has the meaning specified in Section 2.01(b) .
Revolving Commitments means the Revolving A Commitment, the Revolving B Commitments and or any Extended Revolving Commitment, as the context may require.
Revolving Loans means the Revolving A Loans and/or the Revolving B Loans, as the context may require.
RMB means lawful currency of the Peoples Republic of China.
S&P means Standard & Poors Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.
Same Day Funds means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by the Administrative Agent or the applicable L/C Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency.
Sanction(s) means any international economic sanction administered or enforced by the United States government (including OFAC), the United Nations Security Council, the European Union, Her Majestys Treasury or other relevant governmental sanctions authority.
SEC means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
Secured Cash Management Agreement means any Cash Management Agreement between any Loan Party or any Restricted Subsidiary and any Cash Management Bank.
Secured Hedge Agreement means any interest rate, currency, foreign exchange, or commodity Swap Contract between any Loan Party or any Restricted Subsidiary and any Hedge Bank.
Security Agreement means the security agreement, dated as of the Closing Date, executed by the Borrower and the Guarantors in favor of the Administrative Agent for the benefit of the holders of the Obligations, as amended, modified, restated or supplemented from time to time; provided that at all times after a Collateral Reinstatement Date, Security Agreement shall be deemed to refer to any new security agreement required to be delivered with respect to such Collateral Reinstatement Date pursuant to Section 7.10 .
34
Senior Notes means up to $1,666,000,000 aggregate principal amount of (i) 4.625% senior notes due 2024 and (ii) 4.875% senior notes due 2026, in each case, issued by the Borrower on the Closing Date.
Solvent means, in reference to the Loan Parties, that the fair value of all assets of the Loan Parties (taken as a whole), measured on a going concern basis, exceeds all probable liabilities of the Loan Parties (taken as a whole), including those to be incurred pursuant to this Agreement.
Special Notice Currency means at any time an Alternative Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe, reasonably designated by the Administrative Agent to the Borrower as requiring additional notice.
Specified Event of Default means an Event of Default under Section 9.01(a) , (b) , (h ), or (i) .
Specified Indebtedness means (i) Subordinated Indebtedness (other than Subordinated Indebtedness owing to the Borrower or a Restricted Subsidiary), (ii) the Senior Notes, (iii) any Indebtedness issued pursuant to Section 8.01(f) and (iv) any Permitted Refinancing Indebtedness in respect of Indebtedness referred to in clauses (i) through (iii) above.
Specified Loan Party has the meaning specified in Section 4.08 .
Specified Representations means the representations and warranties with respect to the Borrower and the Guarantors set forth in the first sentence of Section 6.01 and Sections 6.02, 6.03, 6.12, 6.13, 6.16 and 6.17.
Specified Sales means Dispositions of (a) inventory and materials in the ordinary course of business, (b) surplus, obsolete or worn-out property or assets, (c) cash or Cash Equivalents, (d) Equity Interests or Indebtedness of Unrestricted Subsidiaries, (e) accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and (f) property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are applied substantially concurrently with such Disposition to the purchase price of similar replacement property.
Specified Transaction means any of the following: (i) any investment by the Borrower or any Restricted Subsidiary in any Person (including any Permitted Acquisition) other than a Person that was a Wholly-Owned Restricted Subsidiary on the first day of such period involving (w) an investment in an Unrestricted Subsidiary, (x) the acquisition of a new Restricted Subsidiary or interest in a joint venture, (y) an increase in the Borrowers and its Restricted Subsidiaries consolidated economic ownership of a Restricted Subsidiary or (z) the acquisition of a product line or business unit, (ii) any Disposition involving (x) the disposition of Equity Interests of a Subsidiary or joint venture (other than to the Borrower or a Subsidiary) or (y) the disposition of a product line or business unit, (iii) any incurrence or repayment of Indebtedness (in each case, other than revolving indebtedness in the ordinary course of business under revolving credit facilities), (iv) any Restricted Payment in respect of the Borrowers Equity Interests, (v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or designation of an Unrestricted Subsidiary to be a Restricted Subsidiary and (vi) any other transaction specifically required to be given effect to on a Pro Forma Basis.
35
Spin-Off means the distribution of 100% of the issued Equity Interests of the Borrower to the holders of the common stock of ConAgra on the Closing Date as described in the Form 10.
Spot Rate for a currency means the rate reasonably determined in good faith by the Administrative Agent or the applicable L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the applicable L/C Issuer may obtain such spot rate from another financial institution designated by the Administrative Agent or the applicable L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the applicable L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.
Sterling means the lawful currency of the United Kingdom.
Subordinated Indebtedness of the Borrower or any Restricted Subsidiary means any Indebtedness of such Person the payment and priority of which is contractually subordinated to payment of the Obligations with customary payment blockage and other provisions and having a maturity no earlier than the date which is ninety-one (91) days after the latest Maturity Date.
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary or Subsidiaries of the Borrower. It is understood that no Existing Joint Venture (i) is a Subsidiary as of the Closing Date or (ii) shall be deemed a Subsidiary until such time as (x) the Borrower gains greater control over and/or ownership of such Existing Joint Venture and (y) it meets the test set forth above.
Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement ), including any such obligations or liabilities under any Master Agreement.
Swap Obligation means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a swap within the meaning of Section 1a(47) of the Commodity Exchange Act.
Swing Line Lender means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
36
Swing Line Loan has the meaning specified in Section 2.04(a) .
Swing Line Loan Notice means a notice of a Borrowing of Swing Line Loans pursuant to Section 2.04(b) , which shall be substantially in the form of Exhibit A-2 or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
Swing Line Sublimit means an amount equal to $35,000,000. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving A Commitments.
Syndication Agent means each of Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, in its capacity as syndication agent under any of the Loan Documents, or any successor syndication agent.
TARGET 2 means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.
TARGET Day means any day on which TARGET 2 (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
Taxes means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Term A Lender means any Person that has a Term A Loan Commitment or portion of the Outstanding Amount of Term A Loan, each other Person that becomes a Term A Lender in accordance with this Agreement and their successors and assigns.
Term A Loan has the meaning specified in Section 2.01(c) .
Term A Loan Commitment means, as to each Lender, its obligation to make its portion of the Term A Loan to the Borrower pursuant to Section 2.01(c) , in the principal amount set forth opposite such Lenders name on Schedule 2.01 . The aggregate principal amount of the Term A Loan Commitments of all of the Lenders as in effect on the Closing Date is $675,000,000.
Term A Maturity Date means November 9, 2021.
Term Loan means a Term A Loan, Extended Term Loan and/or any Incremental Term Loan, as the case may be.
Total Credit Exposure means, as to any Lender at any time, the unused Commitments of such Lender at such time, the outstanding Loans of such Lender at such time and such Lenders participation in L/C Obligations and Swing Line Loans at such time.
Total Revolving A Outstandings means the aggregate Outstanding Amount of all Revolving A Loans, all Swing Line Loans and all L/C Obligations.
37
Transaction Agreements means the tax matters agreement, the employee matters agreement, the transition services agreement and each of the other agreements entered into among ConAgra and/or certain of its subsidiaries (after giving effect to the Spin-Off), on the one hand, and the Borrower and/or certain of its Subsidiaries, on the other, in each case, as contemplated by the Form 10 at or prior to the time of the Spin-Off, in each case, on terms that are not less favorable in any material respect, taken as a whole, than the terms contemplated by the Form 10.
Transactions means the execution, delivery and performance by the Loan Parties of this Agreement, the Borrowing of Loans and other Credit Extensions on the Closing Date, the issuance of the Senior Notes, the payment to ConAgra of approximately $823,500,000 on the Closing Date, the entering into of the Transaction Agreements, the Spin-Off and the other transactions in connection therewith to occur on or prior to the Closing Date.
Transferred Assets has the meaning set forth in the definition of Permitted Receivables Financing.
Type means, with respect to any Loan, its character as a Base Rate Loan or a Eurocurrency Rate Loan.
UCC means the Uniform Commercial Code as in effect from time to time in the State of New York.
United States and U.S. mean the United States of America.
Unreimbursed Amount has the meaning specified in Section 2.03(c)(i) .
Unrestricted Subsidiaries means any Subsidiary of the Borrower designated by the Borrower as such in writing in accordance with Section 7.10(e) ; it being understood and agreed that (i) the term Unrestricted Subsidiary shall include all Subsidiaries of any such designated Subsidiary, and (ii) any Unrestricted Subsidiary may subsequently be designated by the Borrower as a Restricted Subsidiary subject to the terms of Section 7.10(e) .
U.S. Person means any Person that is a United States Person as defined in Section 7701(a)(30) of the Internal Revenue Code.
U.S. Tax Compliance Certificate has the meaning specified in Section 3.01(e)(ii)(B)(3) .
Voting Participant has the meaning specified in Section 11.06(e) .
Voting Participant Notification has the meaning specified in Section 11.06(e) .
Voting Stock means, with respect to any Person, Equity Interests issued by such 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. For purposes of clarification, Indebtedness which by its terms is convertible into Equity Interests is not Voting Stock.
Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the then outstanding principal amount of such Indebtedness into (ii) the product obtained by multiplying (x) the amount of each then remaining installment or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.
38
Wholly-Owned Restricted Subsidiary means any Restricted Subsidiary 100% of the Equity Interests of which (other than directors qualifying shares) are directly or indirectly owned by the Borrower.
Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined under Title IV of ERISA.
Write-Down and Conversion Powers means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
1.02 Other Interpretive Provisions .
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to 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. The word will shall be construed to have the same meaning and effect as the word shall . Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Persons successors and assigns, (iii) the words hereto , herein , hereof and hereunder , and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all assets and properties, tangible and intangible, real and personal, including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word from means from and including ; the words to and until each mean to but excluding ; and the word through means to and including .
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
39
1.03 Accounting Terms .
(a) Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Loan Parties and their Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded.
(b) Changes in GAAP . Except to the extent disclosed in the footnotes to the financial statements delivered pursuant to Section 7.01 , the Borrower will provide a written summary of material changes in GAAP applicable to it and in the consistent application thereof with each annual and quarterly Compliance Certificate delivered in accordance with Section 7.01 . If at any time any change in GAAP (including the adoption of IFRS) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that , until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that under GAAP as of the Closing Date for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.
(c) Calculations . Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial ratios (including for purposes of determining the Applicable Rate) shall be made on a Pro Forma Basis.
1.04 Rounding .
Any financial ratios pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
1.05 Times of Day .
Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
40
1.06 Letter of Credit Amounts .
Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
1.07 Exchange Rates; Currency Equivalents .
(a) The Administrative Agent or the applicable L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants, default thresholds or financial ratio tests hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the applicable L/C Issuer, as applicable. If any basket in Article VIII is exceeded solely as a result of fluctuations in the applicable Dollar Equivalent amount after the last time such basket was utilized, such basket will not be deemed to have been exceeded solely as a result of such fluctuations in the applicable Dollar Equivalent amount. In addition, if any Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars, and such refinancing would cause the applicable dollar-denominated restriction in Article VIII to be exceeded if calculated at the applicable Dollar Equivalent amount on the date of such refinancing, such dollar-denominated restrictions shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the sum of (i) the outstanding or committed principal amount, as applicable of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.
(b) Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the applicable L/C Issuer, as the case may be.
(c) The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of Eurocurrency Rate or with respect to any comparable or successor rate thereto.
1.08 Additional Alternative Currencies .
(a) The Borrower may from time to time request that Eurocurrency Rate Loans with respect to the Revolving A Commitments be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of Alternative Currency; provided
41
that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars. In the case of any such request with respect to the making of Eurocurrency Rate Loans, such request shall be subject to the approval of the Administrative Agent and the Lenders that will be obligated to make Loans in such currency; and in the case of any such request with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Administrative Agent and the L/C Issuer issuing such requested Letter of Credit.
(b) Any such request shall be made to the Administrative Agent not later than 1:00 p.m., 15 Business Days prior to the date of the desired Credit Extension (or such other time or date as may be agreed by the Administrative Agent and, in the case of any such request pertaining to Letters of Credit, the applicable L/C Issuer, in its or their sole discretion). In the case of any such request pertaining to Eurocurrency Rate Loans, the Administrative Agent shall promptly notify each applicable Lender thereof; and in the case of any such request pertaining to Letters of Credit, the Administrative Agent shall promptly notify the applicable L/C Issuer thereof. Each applicable Lender (in the case of any such request pertaining to Eurocurrency Rate Loans) or the applicable L/C Issuer (in the case of a request pertaining to Letters of Credit) shall notify the Administrative Agent, not later than 1:00 p.m., seven Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Eurocurrency Rate Loans or the issuance of Letters of Credit, as the case may be, in such requested currency.
(c) Any failure by a Lender or the applicable L/C Issuer, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Lender or such L/C Issuer, as the case may be, to permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued in such requested currency. If the Administrative Agent and all the Lenders that will be obligated to make Loans in such currency consent to making Eurocurrency Rate Loans in such requested currency, the Administrative Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Borrowings of Eurocurrency Rate Loans; and if the Administrative Agent and the applicable L/C Issuer consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of such Letter of Credit issuance. If the Administrative Agent fails to obtain consent to any request for an additional currency under this Section 1.08 , the Administrative Agent shall promptly so notify the Borrower.
1.09 Change of Currency .
(a) Each obligation of the Borrower to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided , that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.
42
(b) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify in a written notice to the Borrower to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.
(c) Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify in a written notice to the Borrower to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.
1.10 Limited Condition Acquisitions .
Notwithstanding anything in this Agreement or any Loan Document to the contrary, when calculating any applicable ratio or determining other compliance with this Agreement (including the determination of compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred and is continuing or would result therefrom) in connection with a transaction undertaken in connection with the consummation of a Limited Condition Acquisition (other than any extension of credit under any Revolving Commitments), the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom and whether any representations or warranties are true and correct (other than the Specified Representations), at the option of the Borrower (the Borrowers election to exercise such option in connection with any Limited Condition Acquisition, an LCA Election ), be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the LCA Test Date ) and if, after such ratios and other provisions are measured on a Pro Forma Basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive Fiscal Quarter period for which financial statements have been delivered pursuant to Section 7.01(a) or (b) prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such ratios and provisions shall be deemed to have been complied with. For the avoidance of doubt, (x) if any of such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA of the Borrower) at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related specified transactions. If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or basket availability with respect to any other transaction on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition (other than for purposes of determining whether an Event of Default has occurred under Section 8.11 ) is consummated or the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such ratio or basket shall be calculated (1) on a Pro Forma Basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and (2) on a Pro Forma Basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and use of proceeds thereof).
43
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Revolving Loans and Term Loans .
(a) Revolving A Loans . Subject to the terms and conditions set forth herein, each Revolving A Lender severally agrees to make loans (each such loan, a Revolving A Loan ) to the Borrower in Dollars or in one or more Alternative Currencies from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Lenders Revolving A Commitment; provided , however , that after giving effect to any Borrowing of Revolving A Loans, (i) the Total Revolving A Outstandings shall not exceed the Aggregate Revolving A Commitments and (ii) the Revolving A Credit Exposure of any Lender shall not exceed such Lenders Revolving A Commitment. Within the limits of each Lenders Revolving A Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01 , prepay under Section 2.05 , and reborrow under this Section 2.01 . Revolving A Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein, except that all Revolving A Loans denominated in an Alternative Currency must be Eurocurrency Rate Loans.
(b) Revolving B Loans . Subject to the terms and conditions set forth herein, each Revolving B Lender severally agrees to make loans (each such loan, a Revolving B Loan ) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Lenders Revolving B Commitment; provided , however , that after giving effect to any Borrowing of Revolving B Loans, (i) the aggregate Outstanding Amount of the Revolving B Loans shall not exceed the Aggregate Revolving B Commitments, and (ii) the aggregate Outstanding Amount of the Revolving B Loans of any Lender shall not exceed such Lenders Revolving B Commitment. Within the limits of each Lenders Revolving B Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01 , prepay under Section 2.05 , and reborrow under this Section 2.01 . Revolving B Loans may be Base Rate Loans or Eurocurrency Rate Loans, or a combination thereof, as further provided herein.
(c) Term A Loans . Subject to the terms and conditions set forth herein, each Term A Lender severally agrees to make a term loan (each such loan, a Term A Loan ) to the Borrower in Dollars on the Closing Date in an amount not to exceed such Lenders Term A Loan Commitment. Amounts repaid on the Term A Loan may not be reborrowed. The Term A Loan may consist of Base Rate Loans or Eurocurrency Rate Loans, as further provided herein. The Term A Loan Commitments shall terminate upon the funding of the Term A Loans and, if not previously terminated, shall in any event terminate no later than 5:00 p.m. on the Closing Date
(d) Incremental Commitments .
(1) The Borrower may, by written notice to the Administrative Agent from time to time, request Incremental Term Loan Commitments and/or increases in the Revolving Commitments of any Class or the establishment of a new Class of Extended Revolving Commitments, as applicable, in an aggregate amount (excluding Refinancing Term Loans and any Extended Revolving Commitments that are established concurrently with the reduction in any then existing Class of Revolving Commitments) not to exceed $600,000,000 from one or more Eligible Assignees (which, in each case, may include any existing Lender (but no such Lender shall be required to participate in any such Incremental Term Loan or additional Revolving Commitment without its consent) and shall be subject to such consents, if any, as would be required in connection with an assignment of a Term Loan or Revolving Commitment, as applicable, to such Person) willing to provide such Incremental Term Loans and/or additional Revolving Commitments, as the case may be, in their sole discretion. Such notice shall set forth (i) the amount of the Incremental Term Loan Commitments and/or additional Revolving Commitments being requested
44
(which shall be in a minimum amount of $25,000,000 and minimum increments of $10,000,000, or remaining permitted amount or, in each case, such lesser amount approved by the Administrative Agent), (ii) (x) in the case of Incremental Term Loan Commitments, whether the Incremental Term Loans to be borrowed pursuant to such Incremental Term Loan Commitments are to be an increase in any existing Class of Term Loans or a new Class of Term Loans and (y) in the case of any additional Revolving Commitments, whether such Revolving Commitments are to be an increase in any existing Class of Revolving Commitments or a new Class of Extended Revolving Commitments and (iii) the date on which such Incremental Term Loan Commitments and/or increased Revolving Commitments are requested to become effective (which shall, unless otherwise agreed by the Administrative Agent, be not less than ten Business Days after the date such notice is delivered).
(2) The Loan Parties, the Administrative Agent and any other Person whose consent is required as provided above shall execute and deliver to the Administrative Agent an Additional Credit Extension Amendment and such other documentation as the Administrative Agent shall reasonably specify to evidence the Incremental Term Loan Commitment or additional Revolving Commitments. Each Additional Credit Extension Amendment pursuant to this clause (d) shall specify the terms of the applicable Incremental Term Loans and/or additional Revolving Commitments; provided that:
(i) any additional Revolving Commitments shall have the same terms as the then existing Revolving Commitments (except for upfront and arrangement fees and except that any Extended Revolving Commitments may have different terms to the extent permitted by subclause (vi) below);
(ii) the Incremental Term Loans shall not be guaranteed by any Subsidiaries of the Borrower that do not guarantee the existing Loans and shall be secured on a pari passu basis by the same Collateral (and no additional collateral) securing the then existing Obligations;
(iii) the Maturity Date of any Incremental Term Loans shall be no earlier than the then Latest Maturity Date and (b) the Weighted Average Life to Maturity of any Incremental Term Loans shall be no shorter than the remaining Weighted Average Life to Maturity of any then outstanding Class of Term Loans;
(iv) no Incremental Term Loan shall participate on a greater than pro rata basis with the then outstanding Term Loans in any mandatory prepayment;
(v) Incremental Term Loans shall have such interest rates, optional prepayment provisions and fees as may be agreed between the Lenders providing the applicable Incremental Term Loan Commitments and the Borrower (except that any Incremental Term Loans forming an addition to an existing Class of Term Loans shall have the same interest rates, optional prepayment provisions and fees (other than upfront fees) as the applicable existing Class of Term Loans);
(vi) subject to the above, any Incremental Term Loans and Extended Revolving Commitments shall be on terms and pursuant to documentation to be determined by the Borrower and the Lenders providing such Incremental Term Loan; provided that, the terms applicable to any such Incremental Term Loans or Extended Revolving Commitments (except as expressly permitted above and except for covenants or other provisions applicable only to periods after the then Latest Maturity Date) are not, taken as a whole, materially more restrictive to the Borrower and its Restricted Subsidiaries, than the terms applicable to the then outstanding Commitments and Loans, as reasonably determined by the Borrower (except to the extent that this Agreement is amended (which shall not require the consent of any Lender) to incorporate such more restrictive provisions for the benefit of the then existing Lenders); and
45
(vii) subject to Section 1.10 , no Incremental Term Loan Commitment or additional Revolving Commitment shall become effective under this Section 2.01(d) unless (w) no Default or Event of Default shall exist giving pro forma effect to such Incremental Term Loan Commitment or Revolving Commitment and the incurrence of Indebtedness thereunder and use of proceeds therefrom; (x) the conditions set forth in clauses (a) and (b) of Section 5.02 are satisfied whether or not a Credit Extension is made on such date (and, only to the extent a Borrowing is made on such date clause (c) is required to be complied with); (y) on a Pro Forma Basis, giving effect to such Incremental Term Loans or additional Revolving Commitments and the incurrence of Indebtedness thereunder (assuming, in the case of Incremental Term Loan Commitments, that such commitments are fully drawn on such date) and use of proceeds therefrom, the Borrower would be in compliance with Section 8.11 and (iv) the Administrative Agent shall have received documents and legal opinions as to such matters as are reasonably requested by the Administrative Agent.
Upon any increase of any existing Class of Revolving Commitments or Term Loans, the Lenders shall take any action as may be reasonably required by the Administrative Agent to ensure that the Borrowings of such Class are held by the Lenders of such Class on a pro rata basis in accordance with the respective amount of Revolving Commitments or Term Loans of such Class held by each Lender.
(e) Extended Term Loans .
(1) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers made from time to time by the Borrower to all Lenders of any Class of Term Loans on a pro rata basis (based on the aggregate outstanding Term Loans of such Class), and on the same terms to each such Lender ( Extension Offers ), the Borrower is hereby permitted to consummate transactions with individual Lenders that agree to such transactions from time to time to extend the maturity date of such Lenders Term Loans of such Class and to otherwise modify the terms of such Lenders Term Loans of such Class pursuant to the terms of the relevant Extension Offer (including, without limitation, increasing the interest rate or fees payable in respect of such Lenders Term Loans and/or modifying the amortization schedule in respect of such Lenders Term Loans). Any such extension (an Extension ) agreed to between the Borrower and any such Lender (an Extended Term Lender ) will be established under this Agreement through an Additional Credit Extension Amendment reflecting the terms of the extended Term Loans established thereby (each such extended Term Loan, an Extended Term Loan ). Each Extension Offer shall specify the date on which the Borrower proposes that the Extended Term Loan shall be made or the proposed Extended Revolving Commitment shall become effective, which shall be a date not earlier than ten (10) Business Days after the date on which the Extension Offer is delivered to the Administrative Agent (or such shorter period agreed to by the Administrative Agent in its reasonable discretion).
(2) The Borrower and each Extended Term Lender shall execute and deliver to the Administrative Agent an Additional Credit Extension Amendment and such other documentation as the Administrative Agent shall reasonably specify to evidence the Extended Term Loans of such Extended Term Lender. Each Additional Credit Extension Amendment shall specify the terms of the applicable Extended Term Loans; provided , that (i) except as to interest rates, fees and any other pricing terms, and amortization, final maturity date and participation in mandatory prepayments (which shall be determined by the Borrower and set forth in the Extension Offer), the Extended Term Loans shall, except as permitted below, have (x) the same terms as the existing Class of Term Loans from which they are extended or (y) such other terms as shall be reasonably satisfactory to the Administrative Agent; provided that, the terms applicable to any such Extended Term Loans or Extended Revolving Commitments (except as expressly permitted above and except for covenants or other provisions applicable only to periods after the then Latest Maturity Date) are not, taken as a whole, materially more restrictive to the
46
Borrower and its Restricted Subsidiaries, than the terms applicable to the then outstanding Commitments and Loans, as reasonably determined by the Borrower (except to the extent that this Agreement is amended (which shall not require the consent of any Lender) to incorporate such more restrictive provisions for the benefit of the then existing Lenders), (ii) the final maturity date of any Extended Term Loans shall be no earlier than the Maturity Date of the Class of Term Loans to which such Extension Offer relates, (iii) the Weighted Average Life to Maturity of any Extended Term Loans shall be no shorter than the remaining Weighted Average Life to Maturity of the Class of Term Loans to which such Extension Offer relates, (iv) all Extended Term Loans shall be Guaranteed by the Guarantors and secured by the same Collateral equally with the then existing Loans and (v) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not a greater than pro rata basis) than the then outstanding Term Loans in any mandatory prepayment thereunder.
2.02 Borrowings, Conversions and Continuations of Loans .
(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrowers irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Loan Notice. Each such Loan Notice must be received by the Administrative Agent not later than 1:00 p.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of, Eurocurrency Rate Loans denominated in Dollars or of any conversion of Eurocurrency Rate Loans denominated in Dollars to Base Rate Loans, (ii) four Business Days (or five Business Days in the case of a Special Notice Currency) prior to the requested date of any Borrowing or continuation of Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) on the requested date of any Borrowing of Base Rate Loans. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) , each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each Loan Notice shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Class and Type of Loans to be borrowed or to which existing Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto and (vi) the currency of the Loans to be borrowed. If the Borrower fails to specify a currency in a Loan Notice requesting a Borrowing, then the Loans so requested shall be made in Dollars. If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans; provided , however , that in the case of a failure to timely request a continuation of Loans denominated in an Alternative Currency, such Loans shall be continued as Eurocurrency Rate Loans in their original currency with an Interest Period of one month. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. No Loan may be converted into or continued as a Loan denominated in a different currency, but instead must be prepaid in the original currency of such Loan and reborrowed in the other currency. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurocurrency Rate Loan.
47
(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation of Loans denominated in a currency other than Dollars, in each case as described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agents Office for the applicable currency not later than 1:00 p.m., in the case of any Loan denominated in Dollars, and not later than the Applicable Time specified by the Administrative Agent in the case of any Loan in an Alternative Currency, in each case on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Credit Extension, Section 5.01 ), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided , however , that if, on the date the Loan Notice with respect to a Borrowing of Revolving A Loans denominated in Dollars is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings and second , shall be made available to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurocurrency Rate Loan. During the existence of an Event of Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans (whether denominated in Dollars or an Alternative Currency) without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurocurrency Rate Loans denominated in Dollars be converted immediately to Base Rate Loans and any or all of the then outstanding Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of Americas prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than ten Interest Periods in effect with respect to the Loans.
(f) Notwithstanding anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all of the portion of its Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent, and such Lender.
48
2.03 Letters of Credit .
(a) The Letter of Credit Commitment .
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuers agree, in reliance upon the agreements of the Revolving A Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or in one or more Alternative Currencies for the account of the Borrower or any of its Restricted Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Revolving A Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Restricted Subsidiaries and any drawings thereunder; provided that immediately after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving A Outstandings shall not exceed the Aggregate Revolving A Commitments, (y) the Revolving A Credit Exposure of any Revolving A Lender shall not exceed such Lenders Revolving A Commitment and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii) , the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the applicable L/C Issuer approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the applicable L/C Issuer approved such expiry date; provided that the Revolving A Lenders participations in any undrawn amount thereof are terminated on the Letter of Credit Expiration Date and such Letter of Credit shall be Cash Collateralized or backstopped in a manner reasonably satisfactory to the applicable L/C Issuer on or prior to the Letter of Credit Expiration Date.
(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder)
49
not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency;
(E) such L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;
(F) any Revolving A Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Defaulting Lender to eliminate such L/C Issuers actual or potential Fronting Exposure (after giving effect to Section 2.15(b) ) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which such L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(G) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Revolving A Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term Administrative Agent as used in Article X included each L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuers.
50
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit .
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the applicable L/C Issuer, by personal delivery or by any other means acceptable to the applicable L/C Issuer. Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 1:00 p.m. at least two (2) Business Days (or such later date and time as the Administrative Agent and the applicable L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as such L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may require. Additionally, the Borrower shall furnish to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as such L/C Issuer or the Administrative Agent may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or the applicable Restricted Subsidiary or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuers usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving A Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from such L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lenders Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an Auto-Extension Letter of
51
Credit ); provided that any such Auto-Extension Letter of Credit must permit such L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the Non-Extension Notice Date ) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable L/C Issuer, the Borrower shall not be required to make a specific request to such L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving A Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that such L/C Issuer shall not permit any such extension if (A) such L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date from the Administrative Agent that the Required Revolving A Lenders have elected not to permit such extension and directing such L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations .
(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower and the Administrative Agent thereof. In the case of a Letter of Credit denominated in an Alternative Currency, the Borrower shall reimburse the applicable L/C Issuer in such Alternative Currency, unless (A) such L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the Borrower shall have notified such L/C Issuer promptly following receipt of the notice of drawing that the Borrower will reimburse such L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the applicable L/C Issuer shall notify the Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. If the Borrower is notified prior to 11:00 a.m. on the date of any payment by the applicable L/C Issuer under a Letter of Credit to be reimbursed in Dollars, then no later than 1:00 p.m. on such Business Day or the Applicable Time on the date of any payment by the applicable L/C Issuer under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the applicable L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency (or if notified after such time, then no later than 11:00 a.m. on the next succeeding Business Day or the Applicable Time on the date of any payment by the applicable L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency) (each such date, an Honor Date ), the Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency (together with any accrued interest). If the Borrower fails to so reimburse the applicable L/C
52
Issuer by such time, the Administrative Agent shall promptly notify each Revolving A Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the Unreimbursed Amount ), and the amount of such Lenders Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Revolving A Loans that are Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate Revolving A Commitments. Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving A Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the applicable L/C Issuer, in Dollars, at the Administrative Agents Office for Dollar-denominated payments in an amount equal to its Applicable Percentage of the Dollar Equivalent of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Revolving A Lender that so makes funds available shall be deemed to have made a Revolving A Loan that is a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer in Dollars.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Revolving A Loans that are Base Rate Loans because the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving A Lenders payment to the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .
(iv) Until each Revolving A Lender funds its Revolving A Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lenders Applicable Percentage of such amount shall be solely for the account of such L/C Issuer.
(v) Each Revolving A Lenders obligation to make Revolving A Loans or L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against such L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such making of an L/C Advance shall relieve or
53
otherwise impair the obligation of the Borrower to reimburse an L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Revolving A Lender fails to make available to the Administrative Agent for the account of an L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , then, without limiting the other provisions of this Agreement, such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lenders Revolving A Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of an L/C Issuer submitted to any Revolving A Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations .
(i) At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving A Lender such Lenders L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in Dollars and in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Revolving A Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Revolving A Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute . The obligation of the Borrower to reimburse an L/C Issuer for each drawing under each Letter of Credit issued by such L/C Issuer and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement or any other Loan Document;
54
(ii) the existence of any claim, counterclaim, setoff, defense or other right that any Loan Party or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) waiver by such L/C Issuer of any requirement that exists for such L/C Issuers protection and not the protection of the Borrower or any waiver by such L/C Issuer which does not in fact materially prejudice the Borrower;
(v) honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;
(vi) any payment made by such L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the ISP;
(vii) any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;
(viii) any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to the Borrower or any Subsidiary or in the relevant currency markets generally; or
(ix) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any Subsidiary.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrowers instructions or other irregularity, the Borrower will promptly notify the applicable L/C Issuer. Unless there was bad faith, gross negligence, willful misconduct or a material breach of this Agreement or any other Loan Document by the L/C Issuer as determined by a court of competent jurisdiction in a final and nonappealable judgment, the Borrower shall be conclusively deemed to have waived any such claim against an L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer . Each Revolving A Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the applicable L/C Issuer shall not have any
55
responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the applicable L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of such L/C Issuer shall be liable to any Revolving A Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders, the Required Revolving A Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of the bad faith, gross negligence, willful misconduct or a material breach of this Agreement or any other Loan Document; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the applicable L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of such L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (ix) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against an L/C Issuer, and an L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to special, indirect, punitive, consequential or exemplary, damages suffered by the Borrower that were, as determined by a court of competent jurisdiction in a final and nonappealable judgment, caused by such L/C Issuers bad faith, willful misconduct, gross negligence or material breach of this Agreement or any other Loan Document, or such L/C Issuers willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and an L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. An L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication ( SWIFT ) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.
(g) Applicability of ISP; Limitation of Liability . Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit. Notwithstanding the foregoing, no L/C Issuer shall be responsible to the Borrower for, and no L/C Issuers rights and remedies against the Borrower shall be impaired by, any action or inaction of such L/C Issuer required or permitted under any Law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where such L/C Issuer or the beneficiary is located, the practice stated in the ISP, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such Law or practice.
(h) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Revolving A Lender in accordance, subject to Section 2.15 , with its
56
Applicable Percentage a Letter of Credit fee (the Letter of Credit Fee ) in Dollars for each Letter of Credit equal to the Applicable Rate times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Revolving A Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Borrower shall pay directly to each L/C Issuer for its own account, in Dollars, a fronting fee with respect to each Letter of Credit issued by such L/C Issuer, at the rate per annum of 0.125%, in each case, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment) or, if later, the fifth Business Day after the Borrower has received an invoice therefor, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . In addition, the Borrower shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit issued by it as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(j) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(k) Letters of Credit Issued for Restricted Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Restricted Subsidiary, the Borrower shall be obligated to reimburse the applicable L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Restricted Subsidiaries inures to the benefit of the Borrower, and that the Borrowers business derives substantial benefits from the businesses of such Subsidiaries.
(l) Monthly Reports . Each L/C Issuer shall provide to the Administrative Agent a list of outstanding Letters of Credit issued by it (together with type and amounts) on a monthly basis.
(m) L/C Issuer Reports to the Administrative Agent . Unless otherwise agreed by the Administrative Agent, each L/C Issuer shall, in addition to its notification obligations set forth elsewhere in this Section, provide the Administrative Agent a Letter of Credit Report, as set forth below:
(i) reasonably prior to the time that such L/C Issuer issues, amends, renews, increases or extends a Letter of Credit, the date of such issuance, amendment, renewal, increase or extension and the stated amount of the applicable Letters of Credit after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed);
57
(ii) on each Business Day on which such L/C Issuer makes a payment pursuant to a Letter of Credit, the date and amount of such payment;
(iii) on any Business Day on which the Borrower fails to reimburse a payment made pursuant to a Letter of Credit required to be reimbursed to such L/C Issuer on such day, the date of such failure and the amount of such payment;
(iv) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such L/C Issuer; and
(v) for so long as any Letter of Credit issued by an L/C Issuer is outstanding, such L/C Issuer shall deliver to the Administrative Agent (A) on the last Business Day of each calendar month, (B) at all other times a Letter of Credit Report is required to be delivered pursuant to this Agreement, and (C) on each date that (1) an L/C Credit Extension occurs or (2) there is any expiration, cancellation and/or disbursement, in each case, with respect to any such Letter of Credit, a Letter of Credit Report appropriately completed with the information for every outstanding Letter of Credit issued by such L/C Issuer.
2.04 Swing Line Loans .
(a) Swing Line Facility . Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Revolving A Lenders set forth in this Section 2.04 , shall make loans (each such loan, a Swing Line Loan ) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Revolving A Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lenders Revolving A Commitment; provided , however , that (i) immediately after giving effect to any Swing Line Loan, (A) the Total Revolving A Outstandings shall not exceed the Aggregate Revolving A Commitments and (B) the Revolving A Credit Exposure of any Revolving A Lender shall not exceed such Lenders Revolving A Commitment, (ii) the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan and (iii) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04 , prepay under Section 2.05 , and reborrow under this Section 2.04 . Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving A Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lenders Applicable Percentage times the amount of such Swing Line Loan.
58
(b) Borrowing Procedures . Each Borrowing of Swing Line Loans shall be made upon the Borrowers irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by (A) telephone or (B) by a Swing Line Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice. Each such Swing Line Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof and (ii) the requested borrowing date, which shall be a Business Day. Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 3:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a) , or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 4:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower.
(c) Refinancing of Swing Line Loans . The Swing Line Lender at any time in its sole discretion may request that each of the Revolving A Lenders fund its risk participation in the relevant Swing Line Loan.
(d) Repayment of Participations .
(i) At any time after any Revolving A Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving A Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Revolving A Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e) Interest for Account of Swing Line Lender . The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving A Lender funds its Revolving A Loans that are Base Rate Loans or risk participation pursuant to this Section 2.04 to refinance such Lenders Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender . The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
59
2.05 Prepayments .
(a) Voluntary Prepayments of Loans .
(i) Revolving Loans and Term Loans . The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans or Term Loans of any Class in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 1:00 p.m. (1) three Business Days prior to any date of prepayment of Eurocurrency Rate Loans denominated in Dollars, (2) four Business Days (or five Business Days in the case of a Special Notice Currency) prior to any date of prepayment of Eurocurrency Rate Loans denominated in Alternative Currencies and (3) on the date of prepayment of Base Rate Loans; (B) any such prepayment of Eurocurrency Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); (C) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); (D) any prepayment of the Term Loans shall be in such proportions as the Borrower shall elect and each such prepayment shall be applied as directed by the Borrower and, absent such direction, shall be applied in direct order of maturity to the remaining principal amortization payments of the applicable Term Loan; and (E) any such notice may be conditioned on the effectiveness of other financing arrangements or one or more other transactions. Each such notice shall specify the date and amount of such prepayment and the Class and Type(s) of Loans to be prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lenders Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, subject to the occurrence of any condition(s) specified therein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05 . Subject to Section 2.15 , each such prepayment shall be applied to the applicable Class of Loans being prepaid of the applicable Lenders in accordance with their respective Applicable Percentages for such Class.
(ii) Swing Line Loans . The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal thereof then outstanding). Each such notice shall specify the date and amount of such prepayment.
60
If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
(b) Mandatory Prepayments of Loans .
(i) Revolving Commitments .
(A) If for any reason the Total Revolving A Outstandings at any time exceed the Aggregate Revolving A Commitments then in effect, the Borrower shall immediately prepay Revolving A Loans and/or Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided , however , that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(i) unless after the prepayment in full of the Revolving A Loans and Swing Line Loans the Total Revolving A Outstandings exceed the Aggregate Revolving A Commitments then in effect.
(B) If for any reason the aggregate amount of the Revolving B Loans at any time exceed the Aggregate Revolving B Commitments then in effect, the Borrower shall immediately prepay Revolving B Loans in an aggregate amount equal to such excess.
(ii) Asset Sales and Recovery Events . (A) Promptly following any Asset Sale or series of Asset Sales which causes the aggregate Net Cash Proceeds received from all Asset Sales during such Fiscal Year to exceed $20,000,000, the Borrower shall prepay Term Loans in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds in excess of $20,000,000 derived from all such Asset Sales (such prepayment to be applied as set forth in clause (iii) below); provided , however , that such Net Cash Proceeds shall not be required to be so applied to the extent (1) the Borrower delivers to the Administrative Agent a certificate stating that it intends to use such Net Cash Proceeds to acquire assets used or useful in its business or to make Permitted Acquisitions, and (2) such reinvestment or Permitted Acquisition is consummated within three hundred and sixty-five (365) days (or if the Borrower or any Restricted Subsidiary has entered into a binding agreement to make such Permitted Acquisition within such 365 day period, such period shall be extended for an additional 180 days with respect to the portion of such Net Cash Proceeds so committed to be reinvested or applied in such acquisition) of receipt of the Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds not so reinvested shall be applied to repay the Loans immediately thereafter and (B) to the extent of cash proceeds received in connection with a Recovery Event which are in excess of $20,000,000 in the aggregate and which are not used to acquire fixed or capital assets used or useful in its business within three hundred sixty-five (365) days (as such period may be extended pursuant to the foregoing clause (A)(2) above) of the receipt of such cash proceeds, the Borrower shall prepay Term Loans in an aggregate amount equal to one hundred percent (100%) of such cash proceeds net of all third-party costs incurred to obtain such cash proceeds (such prepayment to be applied as set forth in clause (iii) below).
61
(iii) Application of Mandatory Prepayments . All amounts required to be paid pursuant to this Section 2.05(b) shall be applied as follows:
(A) (i) with respect to all amounts prepaid pursuant to Section 2.05(b)(i)(A) , as directed by the Borrower and (ii) with respect to all amounts prepaid pursuant to Section 2.05(b)(i)(B) , to the outstanding Revolving B Loans.
(B) with respect to all amounts prepaid pursuant to Section 2.05(b)(ii) by the Borrower, ratably to the Term Loans of each Class (and to the remaining principal amortization payments thereof as directed by the Borrower and, absent such direction, shall be applied in direct order of maturity to the remaining principal amortization payments of the applicable Term Loan).
Within the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans and then to Eurocurrency Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.05(b) shall be subject to Section 3.05 , but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment.
(iv) Limitation of Prepayment Obligations . Notwithstanding any other provisions of this Section 2.05(b) , (i) to the extent that any or all of the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary (each such Asset Sale a Foreign Asset Sale ) or the Net Cash Proceeds of any Recovery Event received by a Foreign Subsidiary (each such Recovery Event a Foreign Recovery Event ) are prohibited or delayed by applicable foreign Law of such Foreign Subsidiary from being repatriated to the Borrower, the prepayment otherwise required hereunder will not be required in respect of any amount equal to the portion of such Net Cash Proceeds so affected at the time provided in Section 2.05(b)(ii) , but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law of such Foreign Subsidiary will not permit repatriation to the Borrower or any Domestic Subsidiary (the Borrower hereby agreeing to use, and cause its Subsidiaries to use, commercially reasonable efforts to overcome or eliminate any such restrictions on repatriation), and if within one year following the date on which the respective prepayment would otherwise have been required such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local Law, such repatriation will be promptly effected and such repatriated Net Cash Proceeds will be promptly (and in any event not later than five Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof and additional costs relating to such repatriation) to the repayment of Term Loans pursuant to this Section 2.05 or (ii) to the extent that the Borrower has determined in good faith, after consultation with the Administrative Agent, that repatriation to the Borrower or any Domestic Subsidiary of any of or all the Net Cash Proceeds of any Foreign Asset Sale or Net Cash Proceeds of any Foreign Recovery Event attributable to Foreign Subsidiaries would have material (as reasonably determined by the Borrower) adverse tax consequences (including by way of reduction in tax attributes) with respect to such Net Cash Proceeds, the prepayment otherwise required hereunder will not be required in respect of any amount equal to the portion of such Net Cash Proceeds so affected at the time provided in Section 2.05(b)(ii) , but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable adverse tax consequences with respect to such Net Cash Proceeds remain (the Borrower hereby agreeing to use commercially reasonable efforts to overcome or eliminate any adverse tax consequences), and if within one year following the date on which the respective prepayment would otherwise have been required such repatriation of any of such affected Net Cash Proceeds would no longer have material (as reasonably determined by the Borrower) adverse tax consequences, such repatriation will be
62
promptly effected and such repatriated Net Cash Proceeds will be promptly (and in any event not later than five Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof and additional costs relating to such repatriation) to the repayment of the Obligations pursuant to this Section 2.05 .
2.06 Termination or Reduction of Revolving Commitments .
The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving A Commitments and Aggregate Revolving B Commitments of any Class or from time to time permanently reduce such Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 1:00 p.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) any such notice may be conditioned on the effectiveness of other financing arrangements or one or more other transactions. The Borrower shall not terminate or reduce the Aggregate Revolving A Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving A Outstandings would exceed the Aggregate Revolving A Commitments. The Borrower shall not terminate or reduce the Aggregate Revolving B Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate Outstanding Amount of the Revolving B Loans would exceed the Aggregate Revolving B Commitments. If, after giving effect to any reduction of the Aggregate Revolving A Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Revolving A Commitments, such sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of Commitments. Any reduction of Commitments shall be applied to the applicable Commitment of each Lender of the applicable Class according to its Applicable Percentage. All fees accrued with respect thereto until the effective date of any termination of the Commitments shall be paid on the effective date of such termination.
2.07 Repayment of Loans .
(a) Revolving Loans . The Borrower shall repay to the Revolving A Lenders on the Revolving A Credit Maturity Date the aggregate principal amount of all Revolving A Loans made to the Borrower that are outstanding on such date. The Borrower shall repay to the Revolving B Lenders on the Revolving B Credit Maturity Date the aggregate principal amount of all Revolving B Loans that are outstanding on such date.
(b) Swing Line Loans . The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Swing Line Loan is made (including pursuant to a refinancing of such Swing Loan under Section 2.04(c)(i) ) and (ii) the Revolving A Credit Maturity Date.
(c) Term A Loan . The Borrower shall repay the outstanding principal amount of the Term A Loan in equal quarterly installments of $8,437,500 on the last Business Day of each March, June, September and December, beginning with March 31, 2017 (as such installments may hereafter be adjusted as a result of prepayments made pursuant to Section 2.05 ), with the outstanding principal balance of the Term A Loan due on the Term A Maturity Date, unless accelerated sooner pursuant to Section 9.02 .
63
2.08 Interest .
(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of the Eurocurrency Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan (including any Swing Line Loan) shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of the Base Rate plus the Applicable Rate for Base Rate Loans.
(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
2.09 Fees .
In addition to certain fees described in subsections (h) and (i) of Section 2.03 :
(a) Commitment Fees .
(i) The Borrower shall pay to the Administrative Agent, for the account of each Revolving A Lender in accordance with its Applicable Percentage, a commitment fee in Dollars equal to the product of (i) the Applicable Rate times (ii) the actual daily amount by which the Aggregate Revolving A Commitments exceed the sum of (y) the Outstanding Amount of Revolving A Loans and (z) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.15 . For the avoidance of doubt, the Outstanding Amount of Swing Line Loans shall not be counted towards or considered usage of the Aggregate Revolving A Commitments for purposes of determining the commitment fee. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.
64
(ii) The Borrower shall pay to the Administrative Agent, for the account of each Revolving B Lender in accordance with its Applicable Percentage, a commitment fee in Dollars equal to the product of (i) the Applicable Rate times (ii) the actual daily amount by which the Aggregate Revolving B Commitments exceed the aggregate Outstanding Amount of the Revolving B Loans. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.
(b) Other Fees .
(i) The Borrower shall pay to the applicable Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times separately agreed in writing. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2.10 Computation of Interest and Fees .
All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurocurrency Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or in the case of interest in respect of Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a) , bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Net Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Net Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without
65
further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii) , 2.03(h) or 2.08(b) or under Article IX . The Borrowers obligations under this paragraph shall survive the termination of the aggregate Commitments and the repayment of all other Obligations hereunder.
2.11 Evidence of Debt .
(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lenders Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Class, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
2.12 Payments Generally; Administrative Agent s Clawback .
(a) General . All payments to be made by the Loan Parties shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agents Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specified herein. Except as otherwise expressly provided herein, all payments by the Borrower hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agents Office in such Alternative Currency and in Same Day Funds not later than the Applicable Time specified by the Administrative Agent on the dates specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States. If, for any reason, the Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, the Borrower shall make such payment in Dollars in the Dollar Equivalent
66
of the Alternative Currency payment amount. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lenders Lending Office. All payments received by the Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by the Administrative Agent in the case of payments in an Alternative Currency, shall in each case, at the option of the Administrative Agent, be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lenders share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02 ) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lenders Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or an L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or an L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such L/C Issuer, in Same Day Funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.
67
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent . If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II , and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several . The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 11.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.04(c) .
(e) Funding Source . Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.13 Sharing of Payments by Lenders .
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lenders receiving payment of a proportion of the aggregate amount of such Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.14 , or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Loan Party or any Subsidiary (as to which the provisions of this Section shall apply).
68
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.
2.14 Cash Collateral .
(a) Certain Credit Support Events . If (i) any L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing that has not been reimbursed, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section 9.02(c) or (iv) there shall exist a Defaulting Lender that is a Revolving A Lender, the Borrower shall immediately (in the case of clause (iii) above) or within three Business Days (in all other cases) following any request by the Administrative Agent or any L/C Issuer provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.15(b) and any Cash Collateral provided by the Defaulting Lender). Additionally, if the Administrative Agent notifies the Borrower at any time that the Outstanding Amount of all L/C Obligations at such time exceeds 100% of the Letter of Credit Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrower shall provide Cash Collateral for the Outstanding Amount of the L/C Obligations in an amount not less than the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit ; provided that no such notice shall be given by the Administrative Agent in respect of any such excess resulting from fluctuations in the applicable Dollar Equivalent amount of any Letter of Credit unless and until such excess continues for a period of 30 days except to the extent that the Dollar Equivalent exceeds 105% of the Letter of Credit Sublimit.
(b) Grant of Security Interest . The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, shall grant to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c) . If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the L/C Issuers as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. The Borrower shall pay on demand therefor from time to time all reasonable and customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.
(c) Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.14 or Sections 2.03 , 2.05 , 2.15 or 9.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
69
(d) Release . Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 11.06(b)(vi)) ) or (ii) the determination by the Administrative Agent and the L/C Issuers that there exists excess Cash Collateral; provided , however , (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the L/C Issuers may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.
2.15 Defaulting Lenders .
(a) Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendments . Such Defaulting Lenders right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 11.01 .
(ii) Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or the Swing Line Lender hereunder; third , to Cash Collateralize the L/C Issuers Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.14 ; fourth , as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lenders potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuers future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.14 ; sixth , to the payment of any amounts owing to the Lenders, any L/C Issuer or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any L/C Issuer or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement; seventh , so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully
70
funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.15(b) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees .
(A) No Defaulting Lender shall be entitled to receive any fee payable under Sections 2.09(a)(i) , 2.09(a)(ii) or 2.09(b) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.14 .
(C) With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lenders participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (b) below, (y) pay to the applicable L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuers Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(b) Reallocation of Applicable Percentages to Reduce Fronting Exposure . All or any part of such Defaulting Lenders participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders that are Revolving A Lenders in accordance with their respective Applicable Percentages with respect to the Revolving A Commitments (calculated without regard to such Defaulting Lenders Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving A Credit Exposure of any Non-Defaulting Lender that is a Revolving A Lender to exceed such Non-Defaulting Lenders Revolving A Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lenders increased exposure following such reallocation.
(c) Cash Collateral, Repayment of Swing Line Loans . If the reallocation described in clause (b) above cannot, or can only partially, be effected, the Borrower shall, without
71
prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first , prepay Swing Line Loans in an amount equal to the Swing Line Lenders Fronting Exposure and (y) second , Cash Collateralize the L/C Issuers Fronting Exposure in accordance with the procedures set forth in Section 2.14 .
(d) Defaulting Lender Cure . If the Borrower and the Administrative Agent (and, in the case of a Defaulting Lender that is a Revolving A Lender, the Swing Line Lender and the L/C Issuers) agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Revolving A Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.15(b) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a Defaulting Lender.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes .
(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes .
(i) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of the Administrative Agent or any Loan Party, as applicable) require the deduction or withholding of any Tax from any such payment by the Administrative Agent, a Loan Party or other applicable withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.
(ii) If any Loan Party, the Administrative Agent or other applicable withholding agent shall be required by the Internal Revenue Code to withhold or deduct any Taxes, including both U.S. federal backup withholding and withholding taxes, from any payment, then (A) the applicable withholding agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the applicable withholding agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Internal Revenue Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so
72
that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01 ) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(iii) If any Loan Party, the Administrative Agent or other applicable withholding agent shall be required by any applicable Laws other than the Internal Revenue Code to withhold or deduct any Taxes from any payment, then (A) the applicable withholding agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the applicable withholding agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions for Indemnified Taxes (including deductions for Indemnified Taxes applicable to additional sums payable under this Section 3.01 ) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Loan Parties . Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c) Tax Indemnifications . (i) Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01 ) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error. Each of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after written demand therefor, for any amount which a Lender or an L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(ii) Each Lender and L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lenders failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Loan Parties, as applicable, against any Excluded
73
Taxes attributable to such Lender or L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii) .
(d) Evidence of Payments . As soon as practicable after any payment of Taxes by such Loan Party or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01 , such Loan Party shall deliver to the Administrative Agent or the Administrative Agent shall deliver to such Loan Party, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to such Loan Party or the Administrative Agent, as the case may be.
(e) Status of Lenders; Tax Documentation .
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law or the taxing authorities of a jurisdiction pursuant to such applicable Law or reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation either (1) set forth in Section 3.01(e)(ii)(A) , 3.01(e)(ii)(B) and 3.01(e)(ii)(D) below or (2) required by applicable Law other than the Internal Revenue Code or the taxing authorities of the jurisdiction pursuant to such applicable Law to comply with the requirements for exemption or reduction of withholding tax in that jurisdiction) shall not be required if in the Lenders reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Without limiting the generality of the foregoing,
(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
74
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the interest article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the business profits or other income article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect that such Foreign Lender is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a 10 percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a controlled foreign corporation described in Section 881(c)(3)(C) of the Internal Revenue Code (a U.S. Tax Compliance Certificate ) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or
(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-2 or Exhibit C-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on behalf of each such direct and indirect partner;
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative
75
Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lenders obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), FATCA shall include any amendments made to FATCA after the Closing Date.
(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(f) Treatment of Certain Refunds . If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01 , it shall pay to the Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, other than penalties, interest, or charges attributable to bad faith, gross negligence or willful misconduct on the part of the Recipient) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.
(g) Survival . Each partys obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.
76
3.02 Illegality .
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Credit Extension or to determine or charge interest rates based upon the Eurocurrency Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or any Alternative Currency in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (a) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or to make or continue Eurocurrency Rate Loans in the affected currency or currencies or, in the case of Eurocurrency Rate Loans denominated in Dollars, to convert Base Rate Loans to Eurocurrency Rate Loans, shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice by the Borrower, (i) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable and such Loans are denominated in Dollars, convert all Eurocurrency Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurocurrency Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurocurrency Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurocurrency Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.03 Inability to Determine Rates .
(a) If in connection with any request for a Eurocurrency Rate Loan or a conversion to or continuation thereof, (i) the Administrative Agent determines that (A) deposits (whether in Dollars or an Alternative Currency) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Eurocurrency Rate Loan or (B) adequate and reasonable means do not exist for determining the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan (whether denominated in Dollars or an Alternative Currency) or in connection with an existing or proposed Base Rate Loan (in each case with respect to clause (i), Impacted Loans ), or (ii) the Administrative Agent or the Required Lenders determine that for any reason the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan,
77
the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, (i) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans in the affected currency or currencies shall be suspended (to the extent of the affected Eurocurrency Rate Loans or Interest Periods) and (ii) in the event of a determination described in the preceding sentence with respect to the Eurocurrency Rate component of the Base Rate, the utilization of the Eurocurrency Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans in the affected currency or currencies (to the extent of the affected Eurocurrency Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.
(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) of this Section, the Administrative Agent in consultation with the Borrower and the Required Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a)(i) of this Section, (2) the Administrative Agent or the Required Lenders notify the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to the Lenders of funding the Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.
3.04 Increased Costs; Reserves on Eurocurrency Rate Loans .
(a) Increased Costs Generally . If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e) , other than as set forth below) or L/C Issuer;
(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii) impose on any Lender or L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or L/C Issuer of participating in, issuing or maintaining any Letter of
78
Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer, the Borrower will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements . If any Lender or L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any Lending Office of such Lender or such Lenders or L/C Issuers holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lenders or L/C Issuers capital or on the capital of such Lenders or L/C Issuers holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or L/C Issuer or such Lenders or L/C Issuers holding company could have achieved but for such Change in Law (taking into consideration such Lenders or L/C Issuers policies and the policies of such Lenders or L/C Issuers holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lenders or L/C Issuers holding company for any such reduction suffered.
(c) Certificates for Reimbursement . A certificate of a Lender or L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or L/C Issuer, as the case may be, the amount shown as due on any such certificate within ten days after receipt thereof.
(d) Delay in Requests . Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lenders or L/C Issuers right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lenders or L/C Issuers intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e) Additional Reserve Requirements . The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as Eurocurrency liabilities), additional interest on the unpaid principal amount of each Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurocurrency Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive, absent
79
manifest error), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice.
3.05 Compensation for Losses .
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense (other than any loss of Applicable Rate or other profit) incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate Loan on the date or in the amount notified by the Borrower;
(c) any failure by the Borrower to make a payment of any Loan or any drawing under a Letter of Credit (or interest due thereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or
(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.13 ;
including any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05 , each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate used in determining the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the offshore interbank market for such currency for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.
3.06 Mitigation Obligations; Replacement of Lenders .
(a) Designation of a Different Lending Office . Each Lender may make any Credit Extension to the Borrower through any Lending Office, provided that the exercise of this option shall not affect the obligation of the Borrower to repay the Credit Extension in accordance with the terms of this Agreement. If any Lender requests compensation under Section 3.04 , or the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender, any L/C Issuer, or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , then at the request of the Borrower such Lender or L/C Issuer, as applicable, shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such
80
Lender or L/C Issuer, as applicable, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04 , as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02 , as applicable, and (ii) in each case, would not subject such Lender or L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or L/C Issuer, as the case may be. The Borrower hereby agrees to pay all reasonable and documented out of pocket costs and expenses incurred by any Lender or L/C Issuer in connection with any such designation or assignment.
(b) Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a) , the Borrower may replace such Lender in accordance with Section 11.13 .
3.07 Survival .
All of the Loan Parties obligations under this Article III shall survive termination of the aggregate Commitments, repayment of all other Obligations hereunder, and resignation of the Administrative Agent.
ARTICLE IV
GUARANTY
4.01 The Guaranty .
Each of the Guarantors hereby jointly and severally guarantees to each Lender, each L/C Issuer and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws.
4.02 Obligations Unconditional .
The obligations of the Guarantors under Section 4.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise
81
constitute a legal or equitable discharge or defense of a surety or guarantor (other than payment in full of the Obligations, other than contingent indemnification, tax gross up, expense reimbursement or yield protection obligations, in each case, for which no claim has been made), it being the intent of this Section 4.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article IV until such time as the Obligations have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the Loan Documents or other documents relating to the Obligations shall be done or omitted;
(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or other documents relating to the Obligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations, or against any other Person under any other guarantee of, or security for, any of the Obligations.
4.03 Reinstatement .
The obligations of each Guarantor under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each other holder of the Obligations on demand for all reasonable and documented out of pocket costs and expenses (including, without limitation, the fees, charges and disbursements of counsel) incurred by the Administrative Agent or such holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
82
4.04 Certain Additional Waivers .
Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02 and through the exercise of rights of contribution pursuant to Section 4.06 .
4.05 Remedies .
The Guarantors agree that, to the fullest extent permitted by Law, as between the Guarantors, on the one hand, and the Administrative Agent and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 9.02 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 9.02 ) for purposes of Section 4.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 4.01 . The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the holders of the Obligations may exercise their remedies thereunder in accordance with the terms thereof.
4.06 Rights of Contribution .
The Guarantors hereby agree as among themselves that, if any Guarantor shall make an Excess Payment (as defined below), such Guarantor shall have a right of contribution from each other Guarantor in an amount equal to such other Guarantors Contribution Share (as defined below) of such Excess Payment. The payment obligations of any Guarantor under this Section 4.06 shall be subordinate and subject in right of payment to the Obligations until such time as the Obligations (other than contingent obligations for which no claim has been asserted) have been paid-in-full and the Commitments have terminated, and none of the Guarantors shall exercise any right or remedy under this Section 4.06 against any other Guarantor until such Obligations have been paid-in-full and the Commitments have terminated. For purposes of this Section 4.06 , (a) Excess Payment shall mean the amount paid by any Guarantor in excess of its Ratable Share of any Guaranteed Obligations; (b) Ratable Share shall mean, for any Guarantor in respect of any payment of Obligations, the ratio (expressed as a percentage) as of the date of such payment of Guaranteed Obligations of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of all of the Loan Parties exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties hereunder) of the Loan Parties; provided , however , that, for purposes of calculating the Ratable Shares of the Guarantors in respect of any payment of Obligations, any Guarantor that became a Guarantor subsequent to the date of any such payment shall be deemed to have been a Guarantor on the date of such payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such payment; (c) Contribution Share shall mean, for any Guarantor in respect of any Excess Payment made by any other Guarantor, the ratio (expressed as a percentage) as of the date of such Excess Payment of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of the Loan Parties other
83
than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties) of the Loan Parties other than the maker of such Excess Payment; provided , however , that, for purposes of calculating the Contribution Shares of the Guarantors in respect of any Excess Payment, any Guarantor that became a Guarantor subsequent to the date of any such Excess Payment shall be deemed to have been a Guarantor on the date of such Excess Payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such Excess Payment; and (d) Guaranteed Obligations shall mean the Obligations guaranteed by the Guarantors pursuant to this Article IV . This Section 4.06 shall not be deemed to affect any right of subrogation, indemnity, reimbursement or contribution that any Guarantor may have under Law against the Borrower in respect of any payment of Guaranteed Obligations.
4.07 Guarantee of Payment; Continuing Guarantee .
The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to the Obligations whenever arising.
4.08 Keepwell .
Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty in this Article IV by any Guarantor that is not then an eligible contract participant under the Commodity Exchange Act (a Specified Loan Party ) or the grant of a security interest under the Loan Documents by any such Specified Loan Party, in either case, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantors obligations and undertakings under this Article IV voidable under applicable Debtor Relief Laws, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the Obligations (other than contingent obligations for which no claim has been asserted) have been paid in full. Each Guarantor intends this Section to constitute, and this Section shall be deemed to constitute, a keepwell, support, or other agreement for the benefit of each Specified Loan Party for all purposes of the Commodity Exchange Act.
ARTICLE V
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01 Conditions of Initial Credit Extension .
The obligation of each L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
(a) Receipt by the Administrative Agent of the following, each in form and substance reasonably satisfactory to the Administrative Agent:
(i) Executed Agreement . Executed counterparts of this Agreement, properly executed by a Responsible Officer of the signing Loan Party and each Lender and L/C Issuer.
84
(ii) Security Documents . Counterparts of the Security Agreement executed by a Responsible Officer of each Loan Party together with:
(A) UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agents reasonable discretion, to perfect the Administrative Agents security interest in the Collateral, perfection in which is effectuated through the filing of a UCC financing statement;
(B) all certificates evidencing any certificated Equity Interests and all promissory notes evidencing Indebtedness, in each case, to the extent pledged to the Administrative Agent pursuant to the Security Agreement, together with duly executed in blank, undated stock powers or other instruments of transfer attached thereto (unless, with respect to the pledged Equity Interests of any Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion);
(C) duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agents reasonable discretion, to perfect the Administrative Agents security interest in the United States registered and applied for Intellectual Property of the Loan Parties;
(D) a duly executed Perfection Certificate and copies of UCC, United States Patent and Trademark Office and United States Copyright Office, tax and judgment lien searches, each of a recent date listing all effective financing statements, lien notices or comparable documents that name any Loan Party as debtor and that are filed in those state and county jurisdictions in which any Loan Party is organized or maintains its principal place of business and such other searches that are required by the Perfection Certificate or that the Administrative Agent reasonably deems necessary or appropriate, none of which encumber the Collateral covered or intended to be covered by the security documents (other than Permitted Liens); and
(E) Evidence of Insurance . Copies of insurance policies or certificates of insurance of the Loan Parties evidencing liability and casualty insurance meeting the requirements set forth in the Loan Documents, including, but not limited to, endorsements naming the Administrative Agent as additional insured (in the case of liability insurance) or lender loss payee (in the case of hazard insurance) on behalf of the Lenders.
(iii) Closing Certificate . A certificate signed by a Responsible Officer of the Borrower certifying that the conditions specified in Sections 5.02(a) and 5.02(b) have been satisfied.
(iv) Opinions of Counsel . Favorable opinions of (i) Jones Day and (ii) Carney Badley Spellman, P.S., addressed to the Administrative Agent and each Lender, dated as of the Closing Date.
85
(v) Organization Documents, Resolutions, Etc .
(A) copies of the Organization Documents of each Loan Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of such Loan Party to be true and correct as of the Closing Date;
(B) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; and
(C) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and is validly existing, in good standing (to the extent applicable) and qualified to engage in business in its state of organization or formation.
(b) The Lenders shall have received audited financial statements for the Lamb Weston business of ConAgra for the Fiscal Year ending May 29, 2016 and the unaudited financial statements for the Lamb Weston business of ConAgra for the Fiscal Quarter ending in August 2016 and each subsequent Fiscal Quarter of the ConAgra ending 45 days or more prior to the Closing Date.
(c) Receipt by the Administrative Agent, the Arrangers and the Lenders of any fees required to be paid on or before the Closing Date.
(d) The Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced at least two (2) Business Days prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
(e) The Administrative Agent shall have received reasonable evidence satisfactory to it that Senior Notes will be issued substantially concurrently with the making of the initial Credit Extensions hereunder and that the Spin-Off will be consummated on the Closing Date substantially on the terms set forth in the Form 10.
(f) The Borrower and each of the Guarantors shall have provided documentation and other information reasonably requested in writing at least 10 Business Days prior to the Closing Date by the Lenders as they reasonably determine is required by regulatory authorities in connection with applicable know your customer and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, in each case at least three Business Days prior to the Closing Date.
Without limiting the generality of the provisions of the last paragraph of Section 10.03 , for purposes of determining compliance with the conditions specified in this Section 5.01 , each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
86
5.02 Conditions to all Credit Extensions .
The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans, or a Borrowing pursuant to Section 2.03(c) ) is subject to the following conditions precedent:
(a) The representations and warranties of each Loan Party contained in Article VI or any other Loan Document shall be true and correct in all material respects (except when qualified as to materiality or Material Adverse Effect, in which case they shall be true and correct in all respects) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date in all material respects (except when qualified as to materiality or Material Adverse Effect, in which case they shall be true and correct in all respects) ( provided that this clause (a) shall apply to (x) any extensions of credit pursuant to an Incremental Term Loan only to the extent provided in Section 2.01(d) and the applicable Additional Credit Extension Amendment and (y) any Incremental Term Loan to be used to consummate a Limited Condition Acquisition as provided in Section 1.10 ).
(b) No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof ( provided that this clause (b) shall apply to (x) any extensions of credit pursuant to an Incremental Term Loan only to the extent provided in Section 2.01(d) and the applicable Additional Credit Extension Amendment and (y) any Incremental Term Loan to be used to consummate a Limited Condition Acquisition as provided in Section 1.10 ).
(c) The Administrative Agent and, if applicable, the applicable L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.
(d) In the case of a Credit Extension to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Revolving A Lenders (in the case of any Revolving A Loans to be denominated in an Alternative Currency) or the applicable L/C Issuer (in the case of any Letter of Credit to be denominated in an Alternative Currency) would make it impracticable for such Credit Extension to be denominated in the relevant Alternative Currency.
Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans or a Borrowing pursuant to Section 2.03(c) ) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
87
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Loan Parties represent and warrant to the Administrative Agent and the Lenders that:
6.01 Organization; Powers .
(a) (i) Each Loan Party and (ii) each other Restricted Subsidiary, except, in the case of clause (ii), where the failure, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is duly organized, validly existing and in good standing (to the extent applicable) under the laws of the jurisdiction of its organization, (b) each of the Borrower and its Restricted Subsidiaries has all requisite power and authority to carry on its business as now conducted and (c) except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each of the Borrower and its Restricted Subsidiaries is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. Schedule 6.01 sets forth, as of the Closing Date, (i) a correct and complete list of the name and relationship to the Borrower of each and all of the Borrowers Subsidiaries, (ii) a true and complete listing of each class of each Loan Party (other than the Borrower) and each Subsidiarys authorized Equity Interests, of which all of such issued shares are (to the extent such concepts are relevant with respect to such ownership interests) validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 6.01 , and (iii) the type of entity of the Borrower and each of its Subsidiaries. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.
6.02 Authorization; Enforceability .
The Transactions are within each Loan Partys corporate, limited liability company or other organizational powers and have been duly authorized by all necessary corporate, limited liability company or other organizational action and, if required, stockholder action. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable Debtor Relief Laws and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at Law.
6.03 Governmental Approvals; No Conflicts .
The Transactions (a) except as could not reasonably be expected to have a Material Adverse Effect, do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents and the filing of one or more current reports on Form 8-K with respect to the Transactions, (b) except as could not reasonably be expected to have a Material Adverse Effect, will not violate any Law applicable to the Borrower or any of its Restricted Subsidiaries, (c) except as could not reasonably be expected to have a Material Adverse Effect, will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Restricted Subsidiaries or its assets (except those as to which waivers or consents have been obtained), and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries, except Liens created pursuant to the Loan Documents and/or other Permitted Liens.
6.04 Financial Condition; No Material Adverse Change .
(a) The Borrower has heretofore furnished to the Lenders the consolidated balance sheet and statements of income and cash flows as of and for the Fiscal Year ended May 29, 2016, reported on by KPMG LLP, independent public accountants. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Lamb Weston business of ConAgra as of such date in accordance with GAAP.
(b) Since May 29, 2016 there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect (excluding for the avoidance of doubt, the Transactions).
88
6.05 Properties .
(a) Each of the Borrower and its Restricted Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property, in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, and all such property is free of all Liens other than Permitted Liens.
(b) The Borrower and each of its Restricted Subsidiaries owns, has the legal right to use or is licensed to use, Intellectual Property used or held for use in or otherwise necessary to its business as currently conducted except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, and, to the knowledge of the Borrower or any of its Restricted Subsidiaries, the operation of their respective businesses by the Borrower and its Restricted Subsidiaries does not infringe upon or violate the rights of any other Person except for such infringements or violations that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.06 Litigation and Environmental Matters .
(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened in writing against the Borrower or any of its Restricted Subsidiaries (i) that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) as of the Closing Date, that involve this Agreement or the Transactions.
(b) Except for any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (i) none of the Borrower or any of its Restricted Subsidiaries has received any written or actual notice of any claim or legal action with respect to any Environmental Liability or has knowledge or reason to believe that any such notice will be received or is threatened and (ii) none of the Borrower or any of its Restricted Subsidiaries (1) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (2) has become subject to any Environmental Liability.
6.07 Compliance with Laws .
Each of the Borrower and its Restricted Subsidiaries is in compliance with all Laws applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
6.08 Investment Company Status .
Neither the Borrower nor any of its Restricted Subsidiaries is an investment company as defined in, or subject to regulation under, the Investment Company Act of 1940.
89
6.09 Taxes .
Each of the Borrower and its Restricted Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves to the extent required by GAAP or (b) to the extent that the failure to do so could not be expected to result in a Material Adverse Effect.
6.10 ERISA .
No ERISA Event has occurred within the previous five (5) years or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.
6.11 Disclosure .
None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) or delivered hereunder, taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed, when taken as a whole, to be reasonable at the time delivered. Notwithstanding anything contained in this Section 6.11 , the parties hereto acknowledge and agree that uncertainty is inherent in any forecasts and projections and that such forecasts and projections do not constitute guarantees of future performance and that actual results may differ from projected results and that such differences may be material.
6.12 Solvency .
(a) As of the Closing Date, immediately after the consummation of the Transactions to occur on the Closing Date, the Loan Parties, taken as a whole on a consolidated basis, are and will be Solvent.
(b) The Loan Parties on a consolidated basis, will not (i) have unreasonably small capital in relation to the business in which they are engaged or (ii) have incurred, or believe that they will have incurred after giving effect to the transactions contemplated by this Agreement, Indebtedness beyond their ability to pay such Indebtedness as it becomes due.
6.13 Security Interests in Collateral .
As of the Closing Date and at all times thereafter except during a Collateral Suspension Period (and subject to the time period provided in Section 7.10(d) , the provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the holders of the Obligations, and, upon the filing of appropriate financing statements, the recordation of the applicable mortgages and, with respect to any Intellectual Property, filings in the United States Patent and Trademark Office and the United States Copyright Office, or taking such other action as may be required for perfection under applicable Law, such Liens will constitute, to the extent required by the Loan Documents, perfected and continuing Liens on the Collateral, securing the
90
Obligations, enforceable against the Borrower and/or Guarantors, as applicable, and all third parties, and having priority over all other Liens on the Collateral except (a) for Permitted Liens, (b) in the case of Liens perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral and (c) to the extent that perfection of such security interests and Liens are not required by the Loan Documents. No representation or warranty is made under or with respect to the Laws of any non-U.S. jurisdiction with respect to the perfection or priority of any security interest in the Equity Interests issued by any Foreign Subsidiary or any other Collateral located in any non-U.S. jurisdiction.
6.14 Labor Disputes .
There are no labor controversies, strikes, lockouts or slowdowns pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Restricted Subsidiaries (i) which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that involve this Agreement or the Transactions.
6.15 No Default .
No Default has occurred and is continuing.
6.16 Federal Reserve Regulations .
No part of the proceeds of any Credit Extension have been used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the FRB, including Regulations T, U, and X.
6.17 OFAC; Anti-Corruption Laws .
No Loan Party nor any Subsidiary of a Loan Party, nor to the knowledge of any Loan Party, any director, officer, employee or Affiliate thereof is currently the subject of any Sanctions or located, organized or resident in a Designated Jurisdiction in violation of Sanctions. No Credit Extension, nor the proceeds from any Credit Extension, has been used, directly or indirectly, to lend, contribute, provide or has otherwise made available to fund any activity or business of any Person who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including any Lender, the Arrangers, the Administrative Agent, any L/C Issuer or the Swing Line Lender) of Sanctions. The Loan Parties and their Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other applicable anti-corruption laws in all material respects and have instituted and maintained policies and procedures intended to promote and achieve compliance with such laws.
6.18 Insurance .
The properties of the Loan Parties and their Restricted Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party or the applicable Restricted Subsidiary operates (including the use of self-insurance plans). The property and general liability insurance coverage of the Borrower and the Guarantors as in effect on the Closing Date is outlined as to carrier, policy number, expiration date, type and amount on Schedule 6.18 .
91
6.19 EEA Financial Institutions .
No Loan Party is an EEA Financial Institution.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other than contingent obligations for which no claim has been asserted) hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding and not Cash Collateralized:
7.01 Financial Statements and Other Information .
The Borrower will furnish to the Administrative Agent (for delivery to each Lender):
(a) by no later than the date which occurs 90 days (or 100 days if permitted by SEC requirements) after the end of each Fiscal Year of the Borrower, (i) the Borrowers audited consolidated balance sheet and related statements of income, stockholders equity and cash flows as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year (it being understood that such comparative form shall be required only to the extent required by SEC requirements prior to the financial statements for Fiscal Year 2019), all reported on by independent public accountants of recognized national standing (without a going concern or like qualification or exception (except for qualifications or exceptions resulting from pending maturity of Indebtedness under this Agreement)) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP and (ii) at any time that the Borrower has any Unrestricted Subsidiaries, a consolidated balance sheet and related statements of income and cash flows of the Borrower and its Restricted Subsidiaries, in each case as at the end of such Fiscal Year, setting forth in comparative form the corresponding consolidated figures for the preceding Fiscal Year (it being understood that such comparative form shall be required only to the extent required by SEC requirements prior to the financial statements for Fiscal Year 2019), accompanied by a certificate of a Financial Officer of the Borrower, which certificate shall state that such financial statements fairly present in all material respects the consolidated financial condition and results of operations of the Borrower and its Restricted Subsidiaries, in accordance with GAAP (except, in the case of the financial statements of the Borrower and its Restricted Subsidiaries, for the exclusion of Unrestricted Subsidiaries), as at the end of and for such Fiscal Year;
(b) by no later than the date which occurs 45 days (or 50 days if permitted by SEC requirements) after the end of each of the first three Fiscal Quarters of the Borrower, the unaudited consolidated balance sheet and related statements of income and cash flows for the Borrower and its Subsidiaries as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting forth in each case, in comparative form (it being understood that such comparative form shall be required only to the extent required by SEC requirements prior to the financial statements for the Fiscal Quarter ending in February 2018) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by one of its Financial Officers as presenting fairly in all material respects the consolidated financial condition and results of operations of the Borrower and its consolidated Subsidiaries in accordance with GAAP, subject to normal year-end and audit adjustments and the absence of certain footnotes;
92
(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a Compliance Certificate executed by a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred during the period covered thereby and is continuing and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 8.11 , and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 6.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate (which delivery may, unless the Administrative Agent requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);
(d) promptly after the same become publicly available, to the extent not available by electronic or other readily accessible means, copies of all periodic and other material reports, proxy statements and other non-confidential materials filed by the Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;
(e) promptly (in any event, within 30 days, or such later date as determined by the Administrative Agent in its sole discretion) thereafter, written notice of any change in a Loan Partys name, jurisdiction of formation or form of organization (other than the Guarantor Name Change); and
(f) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request (provided that no such information shall be required to be provided if providing such information would violate confidentiality agreements or result in a loss of attorney-client privilege or a claim of attorney work product with respect to such information so long as the Borrower notifies the Administrative Agent that such information is being withheld and the reason therefor).
Documents required to be delivered pursuant to Section 7.01(a) , 7.01(b) or 7.01(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrowers website on the Internet at the website address listed on Schedule 11.02 ; or (ii) on which such documents are posted on the Borrowers behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third party website or whether sponsored by the Administrative Agent); provided that: the Borrower shall deliver paper copies of such documents to the Administrative Agent upon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers may, but shall not be obligated to, make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of the Borrower hereunder (collectively, Borrower Materials ) by posting the Borrower Materials on Debt Domain, IntraLinks, Syndtrak, ClearPar, or a substantially
93
similar electronic transmission system (the Platform ) and (b) certain of the Lenders (each a Public Lender ) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons securities. The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked PUBLIC which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (x) by marking Borrower Materials PUBLIC, the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuers and the Lenders to treat the Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws ( provided , however , that to the extent the Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07 ); (y) all Borrower Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated Public Side Information; and (z) the Administrative Agent and the Arrangers shall be entitled to treat the Borrower Materials that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not designated as Public Side Information.
7.02 Notices of Material Events .
The Borrower will furnish to the Administrative Agent prompt written notice (in any event, within 5 Business Days) upon any Responsible Officer of the Borrower obtaining actual knowledge thereof, of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Loan Party or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding; and
(e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
7.03 Existence; Conduct of Business .
The Borrower will, and will cause each of its Restricted Subsidiaries to, (a) do or cause to be done all things necessary to preserve, maintain, renew and keep in full force and effect (i) its legal existence and (ii) the rights, qualifications, licenses, permits, franchises, governmental authorizations, Intellectual Property rights, licenses and permits necessary in the conduct of its business, except, in each
94
case, where failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 8.03 and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted (and those ancillary, complementary or reasonably related thereto).
7.04 Payment of Obligations .
The Borrower will, and will cause each of its Restricted Subsidiaries to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including material Taxes, before the same shall become delinquent or in default (subject, where applicable, to specified grace periods), except where the validity or amount thereof is being contested in good faith by appropriate proceedings and (a) the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto to the extent required by GAAP or (b) the failure to make payment could not reasonably be expected to result in a Material Adverse Effect.
7.05 Maintenance of Properties .
Except as would not individually or in the aggregate have a Material Adverse Effect, the Borrower will, and will cause each of its Restricted Subsidiaries to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.
7.06 Books and Records; Inspection Rights .
The Borrower will, and will cause each of its Restricted Subsidiaries to, (i) keep proper books of record and account in which complete entries in accordance with GAAP are made of all material dealings and transactions in relation to its business and activities and (ii) permit any representatives designated by the Administrative Agent, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers, all upon reasonable prior notice at such reasonable times and as often as reasonably requested and at the expense of the Borrower; provided that, unless an Event of Default has occurred and is continuing, no more than one such inspection shall be conducted in any Fiscal Year. Notwithstanding anything to the contrary in this Section 7.06 , none of the Borrower or any of the Restricted Subsidiaries will be required to disclose or permit the inspection or discussion of, any document, information or other matter (i) that constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law or any binding agreement or (iii) that is subject to attorney client or similar privilege or constitutes attorney work product.
7.07 Compliance with Laws .
The Borrower will, and will cause each of its Restricted Subsidiaries to, comply with all Laws applicable to it or its property (including, without limitation, ERISA and Environmental Laws), except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
7.08 Use of Proceeds .
The proceeds of the Credit Extensions will be used (i) to consummate the Transactions, including to make a cash payment to ConAgra on the Closing Date as described in the definition of Transactions, (ii) for working capital needs and for other general corporate purposes of the Borrower and its Restricted
95
Subsidiaries in the ordinary course of business and (iii) to finance Permitted Acquisitions and permitted stock repurchases; provided that no more than $175,000,000 of Revolving Loans and Swing Line Loans may be borrowed on the Closing Date. No part of the proceeds of any Credit Extension will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the FRB, including Regulations T, U and X.
7.09 Insurance .
The Borrower will, and will cause each of its Restricted Subsidiaries to, maintain with financially sound and reputable carriers insurance in such amounts and against such risks (including loss or damage by fire and other normally insured perils and loss in transit; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations (including the use of self-insurance plans). The Borrower will furnish to the Administrative Agent, upon request thereof, information in reasonable detail as to the insurance so maintained. Except during a Collateral Suspension Period (and subject to the time period provided in Section 7.10(d) ), the Borrower shall deliver to the Administrative Agent endorsements (x) to all All Risk physical damage insurance policies on all of the Borrowers and Guarantors tangible personal property and assets and business interruption insurance policies naming the Administrative Agent lender loss payee, and (y) to all general liability and other liability policies naming the Administrative Agent an additional insured.
7.10 Subsidiary Guarantors; Pledges; Collateral; Further Assurances .
(a) No later than thirty (30) days (or such later date as may be agreed upon by the Administrative Agent) after any Person (other than an Excluded Subsidiary) becomes a Material Restricted Subsidiary or any Material Restricted Subsidiary that was an Excluded Subsidiary ceases to be an Excluded Subsidiary, the Borrower shall provide the Administrative Agent with written notice thereof and shall cause each such Subsidiary to deliver to the Administrative Agent a Joinder Agreement pursuant to which such Subsidiary agrees to be bound by the terms and provisions of this Agreement as a Guarantor and, except during a Collateral Suspension Period, the Collateral Documents, such Joinder Agreement to be accompanied by appropriate corporate resolutions, other corporate documentation and legal opinions to the extent reasonably requested by, and in form and substance reasonably satisfactory to, the Administrative Agent.
(b) Except during a Collateral Suspension Period (and subject to the time period provided in clause (d) below), the Borrower will cause, and will cause each Guarantor to cause, all existing and newly-acquired owned property other than Excluded Property to be subject at all times (subject to the time periods in clause (a) above and (d) below) to first priority, perfected Liens in favor of the Administrative Agent for the benefit of the holders of the Obligations to secure the Obligations to the extent required by and in accordance with the terms and conditions of the Collateral Documents, subject in any case to Permitted Liens.
(c) Without limiting the foregoing, except during a Collateral Suspension Period (and subject to the time period provided in clause (d) below), the Borrower will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements and other documents and such other actions or deliveries of the type required by Section 5.01 , as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the reasonable expense of the Borrower.
96
(d) If a Collateral Suspension Period shall terminate, all Liens granted or purported to be granted in any Loan Document shall be automatically and immediately reinstated and the Loan Parties shall, within 30 days following termination of such Collateral Suspension Period (or within such longer period as to which the Administrative Agent may consent) (the Collateral Reinstatement Date ) take all actions as are reasonably requested by the Administrative Agent to secure the Obligations (and perfect such security interest) by first priority Liens (subject in any case to Permitted Liens) in favor of the Administrative Agent on all assets of the Loan Parties other than Excluded Property and the Administrative Agent is hereby authorized to enter into any new Collateral Documents in connection with any Collateral Reinstatement Date.
(e) Notwithstanding the provisions of this Section 7.10 to the contrary, so long as no Default has occurred and is then continuing or would result therefrom and the Borrower has demonstrated compliance on a Pro Forma Basis (after giving effect to such redesignation) with the financial covenants set forth in Section 8.11 , the Borrower may from time to time designate or change any of its Subsidiaries status as a Restricted Subsidiary or an Unrestricted Subsidiary. The designation of any Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment by the Borrower therein at the date of designation in an amount equal to the fair market value as determined in good faith by the Borrower of the Borrowers or its Subsidiarys (as applicable) investment therein.
7.11 Farm Credit Equities and Security .
(a) So long as (i) any Farm Credit Lender is a Lender hereunder and (ii) such Farm Credit Lender has notified the Borrower that it is eligible to receive patronage distributions directly from such Farm Credit Lender or one of its Affiliates on account of the Loans made by such Farm Credit Lender hereunder, the Borrower may acquire equity in such Farm Credit Lender in such amounts and at such times as such Farm Credit Lender may require in accordance with such Farm Credit Lenders bylaws and capital plan (as each may be amended from time to time), except that the maximum amount of equity that the Borrower shall be required pursuant to this sentence to purchase in such Farm Credit Lender in connection with the Loans made by such Farm Credit Lender shall not exceed the maximum amount required by such bylaws and capital plan on the Closing Date (or, if applicable, at the time such Farm Credit Lender becomes a Lender hereunder via assignment to the extent the Borrower has consented to such Farm Credit Lender becoming a Lender). The Borrower acknowledges receipt, as of the Closing Date and to the extent applicable, of a copy of (i) each such Farm Credit Lenders most recent annual report, (ii) each such Farm Credit Lenders Notice to Prospective Stockholders and (iii) each such Farm Credit Lenders bylaws and capital plan, which describe the nature of all of the Borrowers equity in each such Farm Credit Lender acquired in connection with its patronage loan from such Farm Credit Lenders (the Farm Credit Equities ) as well as capitalization requirements, and agrees to be bound by the terms thereof.
(b) Each party hereto acknowledges that each relevant Farm Credit Lenders bylaws and capital plan (as each may be amended from time to time) shall govern (i) the rights and obligations of the parties with respect to the Farm Credit Equities and any patronage refunds or other distributions made on account thereof or on account of the Borrowers patronage with such Farm Credit Lender, (ii) the Borrowers eligibility for patronage distributions from such Farm Credit Lender (in the form of Farm Credit Equities and cash) and (iii) patronage distributions, if any, in the event of a sale of a participation interest. Each Farm Credit Lender reserves the right to assign or sell participations in all or any part of its Commitments or outstanding Loans hereunder on a non-patronage basis.
97
(c) Each party hereto acknowledges that each Farm Credit Lender has a statutory first Lien pursuant to the Farm Credit Act of 1971 (as amended from time to time) on all Farm Credit Equities that the Borrower may now own or hereafter acquire in such Farm Credit Lender, which statutory Lien shall be for such Farm Credit Lenders sole and exclusive benefit. Notwithstanding anything to the contrary herein or in any other Loan Document, the Farm Credit Equities shall not constitute security for the Obligations due to any other holder thereof. To the extent that any of the Loan Documents create a Lien on the Farm Credit Equities or on patronage accrued by the relevant Farm Credit Lender for the account of the Borrower (including, in each case, proceeds thereof), such Lien shall be for such Farm Credit Lenders sole and exclusive benefit and shall not be subject to pro rata sharing hereunder. Neither the Farm Credit Equities nor any accrued patronage shall be offset against the Obligations except that, in the event of an Event of Default, the relevant Farm Credit Lender may elect, solely at its discretion, to apply the cash portion of any patronage distribution or retirement of equity to amounts due under this Agreement. The Borrower acknowledges that any corresponding tax liability associated with such application is the sole responsibility of the Borrower. No Farm Credit Lender shall have any obligation to retire its Farm Credit Equities upon any Default or any other default by the Borrower or any other Loan Party, or at any other time, either for application to the Obligations or otherwise.
7.12 Post-Closing .
(a) Take all necessary actions to satisfy the items described on Schedule 7.12 (as may be updated pursuant to this Agreement) within the applicable period of time specified in such Schedule (or such longer period as the Administrative Agent may agree in its sole discretion).
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder any Loan or other Obligation hereunder (other than contingent obligations for which no claim has been asserted) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding and not Cash Collateralized:
8.01 Indebtedness .
The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness existing on the Closing Date and set forth in Schedule 8.01 and Permitted Refinancing Indebtedness in respect thereof;
(c) Indebtedness of the Borrower to any Restricted Subsidiary and of any Restricted Subsidiary to the Borrower or any other Restricted Subsidiary; provided that any Indebtedness owing by a Loan Party to a Restricted Subsidiary that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
98
(d) Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and any Permitted Refinancing Indebtedness in respect of any of the foregoing; provided that the aggregate principal amount of Indebtedness incurred in reliance on this clause (d) shall not exceed the greater of (i) $200,000,000 and (ii) 9.0% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of incurrence thereof) at any time outstanding;
(e) obligations in connection with any Permitted Receivables Financing;
(f) (i) unsecured Indebtedness of the Loan Parties; provided that (x) both immediately before and after giving effect to the incurrence of such Indebtedness, the Borrower shall be in compliance with the financial covenants set forth in Section 8.11 on a Pro Forma Basis, (y) such indebtedness (A) shall have a maturity date no earlier than 91 days following the then Latest Maturity Date (as of the date such Indebtedness was incurred) and (B) shall not require any scheduled payment of principal prior to the maturity date thereof and (z) the covenants and events of default contained in such Indebtedness are not, taken as a whole, materially more restrictive on the Borrower and its Restricted Subsidiaries (as determined in good faith by a Responsible Officer of the Borrower) than the terms of this Agreement unless the Borrower enters into an amendment to this Agreement with the Administrative Agent (which amendment shall not require the consent of any other Lender) to add such more restrictive terms for the benefit of the Lenders and (ii) Permitted Refinancing Indebtedness in respect of the foregoing;
(g) Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary pursuant to a Permitted Acquisition ( provided that such Indebtedness was not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary) so long as, immediately after giving effect to such Permitted Acquisition, the Borrower shall be in compliance with the financial covenants set forth in Section 8.11 on a Pro Forma Basis and any Permitted Refinancing Indebtedness in respect of the foregoing;
(h) Indebtedness in respect of Swap Contracts; provided that such Swap Contracts are (or were) entered into in for the purpose of mitigating risks associated with fluctuations in interest rates, foreign exchange rates or commodity prices, and not for purposes of speculation;
(i) Indebtedness of Restricted Subsidiaries of the Borrower that are not Loan Parties in an aggregate principal amount outstanding at any one time not to exceed (x) $50,000,000 plus (y) in the case of Foreign Subsidiaries organized under the Laws of the Peoples Republic of China, RMB450,000,000;
(j) to the extent constituting Indebtedness, indemnification and non-compete obligations or adjustments in respect of the purchase price (including earn-outs and other contingent deferred payments) in connection with any Permitted Acquisition or sale or disposition permitted by Section 8.05 ;
(k) Indebtedness in respect of workers compensation claims, property casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations, performance, bid and surety bonds and completion guaranties and similar arrangements, in each case in the ordinary course of business;
99
(l) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Borrower or any Restricted Subsidiary in the ordinary course of business against insufficient funds, so long as such Indebtedness is promptly repaid;
(m) other Indebtedness of the Borrower and its Restricted Subsidiaries in a principal amount up to but not exceeding in the aggregate outstanding on the date such Indebtedness is incurred the greater of (i) $200,000,000 and (ii) 9% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of incurrence thereof) at such time;
(n) the Senior Notes issued on the Closing Date in an aggregate principal amount not to exceed $1,700,000,000 and any Permitted Refinancing Indebtedness in respect of the foregoing;
(o) Indebtedness representing deferred compensation to employees of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business
(p) Indebtedness incurred in the ordinary course of business in connection with cash pooling arrangements and cash management incurred in the ordinary course of business in respect of netting services and similar arrangements in each case in connection with cash management and deposit accounts, but only to the extent, with respect to any such arrangements, that the total amount of deposits subject to such arrangements equals or exceeds the total amount of overdrafts or similar obligations subject thereto;
(q) Indebtedness consisting of unpaid insurance premiums owing to insurance companies and insurance brokers incurred in connection with the financing of insurance premiums in the ordinary course of business;
(r) Guarantees of Indebtedness otherwise permitted by this Section 8.01 and of other obligations otherwise permitted hereunder; and
(s) any Refinancing Debt Securities and any Permitted Refinancing Indebtedness in respect of the foregoing.
The accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preferences and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the applicable Dollar Equivalent amount of any Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 8.01 . The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a consolidated balance sheet of the Borrower dated such date prepared in accordance with GAAP.
This Agreement will not treat (1) unsecured Indebtedness as subordinated or junior in right of payment to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior in right of payment to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.
100
Further, for purposes of determining compliance with this Section 8.01 , if an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of Indebtedness (or any portion thereof) permitted by this Section 8.01 , the Borrower may, in its sole discretion, classify or divide such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 8.01 and will be entitled to only include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses (or any portion thereof) and such item of Indebtedness (or any portion thereof) shall be treated as having been incurred pursuant to only such clause or clauses (or any portion thereof); provided , that all Indebtedness outstanding under this Agreement shall at all times be deemed to have been incurred pursuant to clause (a) of this Section 8.01 .
8.02 Liens .
The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:
(a) Liens created pursuant to any Loan Document to secure Obligations;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any Restricted Subsidiary existing on the Closing Date and set forth in Schedule 8.02 ; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Restricted Subsidiary (other than any replacements of such property or assets and accessions thereto and proceeds thereof, and in the case of any Restricted Subsidiary, after-acquired property of such Restricted Subsidiary of the same type and consistent with that contemplated at the time such original Lien was created) and (ii) such Lien shall secure only those obligations which it secures on the Closing Date and any Permitted Refinancing Indebtedness in respect thereof;
(d) any Farm Credit Lenders statutory Lien in its Farm Credit Equities;
(e) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Restricted Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 8.01(d) , (ii) except in the case of Permitted Refinancing Indebtedness such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) except in the case of Permitted Refinancing Indebtedness, the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and the financing thereof and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Restricted Subsidiary;
(f) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Restricted Subsidiary or existing on any property or asset of any Person that becomes a Restricted Subsidiary after the Closing Date prior to the time such Person becomes a Restricted Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Restricted Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or Restricted Subsidiary (other than any replacements of such property or assets and accessions thereto and proceeds thereof, and in the case of any acquired Restricted Subsidiary, after-acquired
101
property of such Restricted Subsidiary of the same type and consistent with that contemplated at the time such original Lien was created) and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary and Permitted Refinancing Indebtedness in respect thereof;
(g) Liens upon real or personal property leased under operating leases in the ordinary course of business by the Borrower or any of its Restricted Subsidiaries in favor of the lessor created at the inception of the lease transaction, securing obligations of the Borrower or any of its Restricted Subsidiaries under or in respect of such lease and extending to or covering only the property subject to such lease and improvements thereon;
(h) Liens of sellers or creditors of sellers of farm products encumbering such farm products when sold to any of the Borrower or its Restricted Subsidiaries pursuant to the Food Security Act of 1985 or pursuant to similar state laws to the extent such Liens may be deemed to extend to the assets of such Person;
(i) protective Uniform Commercial Code filings with respect to personal property leased by, or consigned to, any of the Borrower or its Restricted Subsidiaries;
(j) Liens upon Equity Interests of Unrestricted Subsidiaries;
(k) Liens in favor of a Receivables Financing SPC or Receivables Financier created or deemed to exist in connection with a Permitted Receivables Financing (including, without limitation, any related filings of any financing statements, any Liens on deposit and securities accounts maintained in connection with any Permitted Receivables Financing and any Liens on the Equity Interests of a Receivables Financing SPC), but only to the extent that any such Lien relates to the applicable Transferred Assets actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such transaction;
(l) Liens on Collateral securing Indebtedness permitted by Section 8.01(s) ; provided that such Liens are subject to a Permitted Intercreditor Agreement;
(m) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;
(n) Liens of sellers of goods to the Borrower and its Restricted Subsidiaries arising under Article 2 of the UCC or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;
(o) Liens in favor of customs and revenue authorities arising as a matter of law to secure the payment of customs duties in connection with the importation of goods;
(p) Liens solely on any cash earnest money deposits made in connection with an Investment permitted by Section 8.04 ;
(q) transfer restrictions, purchase options, calls or similar rights of third-party joint venture partners with respect to Equity Interests of joint venture entities;
(r) leases, licenses, subleases or sublicenses and Liens on the property covered thereby, in each case, granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Borrower or any Restricted Subsidiary, taken as a whole, or (ii) secure any Indebtedness;
102
(s) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Borrower or any Restricted Subsidiary in the ordinary course of business permitted by this Agreement;
(t) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;
(u) Liens that are contractual rights of set-off or rights of pledge (i) relating to the establishment of depository relations with banks or other deposit-taking financial institutions and not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower or any of the Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of any Restricted Subsidiary in the ordinary course of business;
(v) Liens on any cash earnest money deposits made by the Borrower or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;
(w) Liens consisting of an agreement to dispose of any property in a Disposition permitted hereunder, to the extent that such Disposition would have been permitted on the date of the creation of such Lien;
(x) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(y) Liens on specific items of inventory or other goods and the proceeds thereof securing such Persons obligations in respect of documentary letters of credit or bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;
(z) Liens on property subject to any sale and leaseback transaction permitted hereunder and general intangibles related thereto;
(aa) other Liens on assets of the Borrower and the Restricted Subsidiaries securing other obligations of the Borrower and the Restricted Subsidiaries in the aggregate principal amount not to exceed the greater of $100,000,000 and 4.5% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of creation thereof) at any time outstanding;
(bb) Liens on assets of Restricted Subsidiaries that are not Guarantors securing Indebtedness permitted by Section 8.01(i) ; and
(cc) Liens securing Swap Contracts in a net amount not to exceed $50,000,000.
103
For purposes of determining compliance with this Section 8.02 , if a Lien meets, in whole or in part, the criteria of one or more of the categories of Liens (or any portion thereof) permitted in this Section 8.02 , the Borrower may, in its sole discretion, classify or divide such Lien (or any portion thereof) in any manner that complies with this Section 8.02 and will be entitled to only include the amount and type of such Lien or liability secured by such Lien (or any portion thereof) in one of the above clauses and such Lien will be treated as being incurred pursuant to only such clause or clauses (or any portion thereof).
8.03 Fundamental Changes .
(a) The Borrower will not, and will not permit any Restricted Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that , if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing: (i) any Restricted Subsidiary of the Borrower may merge into a Loan Party in a transaction in which such Loan Party is the surviving entity, (ii) any Guarantor may merge into or consolidate with any Person in a transaction in which the surviving entity is or becomes a Guarantor; provided that any such merger or consolidation involving a Person that is not a Restricted Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 8.04 , (iii) any Restricted Subsidiary that is not a Guarantor may (x) liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders or (y) merge or consolidate with any other Person (other than a Loan Party), provided that (1) a Restricted Subsidiary is the surviving Person and (2) any such merger or consolidation involving a Person that is not a Restricted Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 8.04 ; (iv) the Borrower or any Restricted Subsidiary may merge with any other Person in connection with a Permitted Acquisition, provided that (x) if the Borrower is a party to such transaction, the Borrower is the continuing or surviving corporation and (y) if a Guarantor is a party to such transaction, such Guarantor is the surviving Person; and (v) any permitted sale or disposition under Section 8.05 may be effectuated pursuant to a merger, consolidation, liquidation or dissolution.
(b) The Borrower will not, nor will it permit any of its Restricted Subsidiaries to, (i) engage to any substantial extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the Closing Date and ancillary, complementary or reasonably related thereto or (ii) change its Fiscal Year from the basis in effect on the Closing Date or with respect to a Restricted Subsidiary that was acquired or formed after the Closing Date, from the basis in effect on the date such entity became a Restricted Subsidiary; provided that (x) any Restricted Subsidiary may change its fiscal year to conform to the Fiscal Year of the Borrower and (y) with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) the Borrower and its Restricted Subsidiaries may change their Fiscal Year to end on December 31 so long as, if requested by the Administrative Agent, the Borrower shall have entered into an amendment to this Agreement with the Administrative Agent (which amendment shall not require the consent of any other Lender) to ensure that such change in Fiscal Year does not materially adversely affect the rights of the Lenders or the Borrower under this Agreement and to otherwise appropriately update the terms hereof in light of such change in Fiscal Year and fiscal periods.
For the avoidance of doubt, nothing in this Section 8.03 shall prohibit the consummation of the Transaction.
104
8.04 Investments, Loans, Advances and Acquisitions .
The Borrower will not, and will not permit any Restricted Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, make or permit to exist any investment (including by way of Guarantees) or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:
(a) investments in cash and Cash Equivalents;
(b) investments in existence on the Closing Date and described in Schedule 8.04 and amendments, extensions and renewals thereof that do not increase the amount thereof and investments reflected on Schedule 6.01 ;
(c) operating deposit accounts with depository institutions and other ordinary course cash management;
(d) investments received in connection with a disposition permitted under Section 8.05(h) or (i) ;
(e) purchases of inventory and other assets to be sold or used in the ordinary course of business;
(f) investments by (i) any Loan Party in any Loan Party, (ii) any Restricted Subsidiary that is not a Loan Party in the Borrower or any other Restricted Subsidiary and (iii) any Loan Party in any Restricted Subsidiary that is not a Loan Party; provided that the aggregate principal amount of investments outstanding pursuant to this clause (iii) shall not exceed the greater of $150,000,000 and 7.0% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of the making thereof) at any time outstanding;
(g) loans and advances to employees in the ordinary course of business not exceeding $10,000,000 in the aggregate;
(h) investments in the form of Swap Contracts permitted by Section 8.01(h) ;
(i) deposits to secure bids, tenders, utilities, vendors, leases, licenses, statutory obligations, surety and appeal bonds, performance bonds and other deposits of like nature arising in the ordinary course of business;
(j) investments by any Receivables Financing SPC, the Borrower or any Restricted Subsidiary in a Receivables Financing SPC in each case made in connection with a Permitted Receivables Financing, and loans permitted by the applicable Permitted Receivables Financing that are made by the Borrower or a Restricted Subsidiary to a Receivables Financing SPC or by a Receivables Financing SPC to the Borrower or a Restricted Subsidiary in connection therewith;
(k) the Farm Credit Equities and any other stock or securities of, or investments in, a Farm Credit Lender or its investment services or programs;
105
(l) investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors or other disputes with customers or suppliers and investments consisting of the prepayment of suppliers and service providers on customary terms in the ordinary course of business;
(m) Guarantees of Indebtedness permitted by Section 8.01 and of other obligations otherwise permitted hereunder;
(n) investments in prepaid expenses, utility and workers compensation, performance and other similar deposits, each as entered into in the ordinary course of business;
(o) investments consisting of the licensing, sublicensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(p) investments to the extent made with (i) Qualified Equity Interests of the Borrower or (ii) the cash proceeds of any Equity Issuance by the Borrower so long as such investment is consummated within 90 days of such Equity Issuance (provided that such cash proceeds shall not be included in the Available Amount);
(q) additional investments in an aggregate amount not to exceed the greater of $250,000,000 and 11.5% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of the making thereof) at any time outstanding;
(r) the Transactions and Permitted Acquisitions;
(s) other investments so long as, on a Pro Forma Basis immediately after the making of any such investment, the Consolidated Net Leverage Ratio does not exceed 3.75 to 1.00;
(t) subject to the absence of any continuing Event of Default and compliance by the Borrower on a Pro Forma Basis with the covenants set forth in Section 8.11 (each in accordance with Section 1.10 , if applicable), investments from the Available Amount; and
(u) investments made during a Collateral Suspension Period.
For purposes of covenant compliance, the amount of any investment shall be the amount actually invested (with respect to any investment made other than in the form of cash or Cash Equivalents, valued at the fair market value thereof (as reasonably determined by the Borrower in good faith) at the time of the making thereof), without adjustment for subsequent increases or decreases in the value of such investment, less any amount repaid, returned, distributed or otherwise received in respect of any investment, in each case, in cash, and the amount of any investment constituting a Guarantee shall be determined as stated in the definition of Guarantee.
Any investment in any Person other than a Loan Party that is otherwise permitted by this Section 8.04 may be made through intermediate investments in Restricted Subsidiaries that are not Loan Parties and such intermediate investments shall be disregarded for purposes of determining the outstanding amount of investments pursuant to any clause set forth above.
106
For purposes of determining compliance with this Section 8.04 , if an investment meets, in whole or in part, the criteria of one or more of the categories of investments (or any portion thereof) permitted in this Section 8.04 , the Borrower may, in its sole discretion, classify or divide such investment (or any portion thereof) in any manner that complies with this Section 8.04 and will be entitled to only include the amount and type of such investment (or any portion thereof) in one of the above clauses and such investment will be treated as being incurred pursuant to only such clause or clauses (or any portion thereof).
8.05 Asset Sales .
The Borrower will not, and will not permit any Restricted Subsidiary to, sell, transfer, lease, license otherwise dispose of any asset, including any Equity Interest of any Restricted Subsidiary owned by it (any such transaction a Disposition ), except:
(a) any Specified Sale;
(b) Dispositions of assets (i) among the Borrower and the Guarantors and (ii) from any Restricted Subsidiary that is not a Guarantor to any Loan Party or another Restricted Subsidiary;
(c) any sale of Transferred Assets by such Person to a Receivables Financing SPC and subsequently to a Receivables Financier in connection with a Permitted Receivables Financing;
(d) (i) sale and leaseback transactions permitted by Section 8.06 ;
(e) to the extent constituting a Disposition, the creation of Liens, the making of investments, the consummation of fundamental changes and the making of Restricted Payments permitted by Sections 8.02 , 8.03 (other than Section 8.03(a)(iv)) , 8.04 and 8.07 , respectively;
(f) to the extent constituting a Disposition, the unwinding of any Swap Contract pursuant to its terms;
(g) transfers of condemned real property as a result of the exercise of eminent domain or other similar policies to the respective Governmental Authority or agency that has condemned such property (whether by deed in lieu of condemnation or otherwise), and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement;
(h) Dispositions of other assets so long as the aggregate amount thereof sold or otherwise disposed of in any single Fiscal Year by the Borrower and its Restricted Subsidiaries shall not have a book value (as determined in good faith by the Borrower) in excess of ten percent (10%) (or fifteen percent (15%) during any Collateral Suspension Period) of the Consolidated Total Assets owned on the later of the Closing Date or the last day of the immediately prior Fiscal Year; provided that to the extent any such Disposition or series of related Dispositions involve assets or property with an aggregate fair market value in excess of $10,000,000 (i) no Event of Default shall have occurred and be continuing at the time of such Disposition, (ii) such Disposition is for at least fair market value (as determined in good faith by the Borrower) and (iii) the consideration received by the Borrower or the applicable Restricted Subsidiary for such Disposition shall consist of at least 75% cash and Cash Equivalent (it being understood that for purposes of this clause (iii) the following shall be deemed to be cash and Cash Equivalents
107
(x) any liabilities relating to any asset or of any Restricted Subsidiary that is subject to such Disposition (other than liabilities that are expressly subordinated to the Obligations) to the extent that the Borrower and its Restricted Subsidiaries are released from any liability thereunder, (y) any note or security that is sold for cash and Cash Equivalents by the Borrower or the applicable Restricted Subsidiary within 180 days following the date of receipt thereof and (z) Designated Non-Cash Consideration in an aggregate amount for all such Dispositions not to exceed $50,000,000 at any time outstanding (without giving effect to any write-down or writeoff thereof));
(i) non-exclusive licenses or sublicenses of Intellectual Property in the ordinary course of business and abandonment or lapse of Intellectual Property that is, in the reasonable business judgment of the Borrower or its Restricted Subsidiary, no longer used in or useful in the conduct of their respective businesses; and
(j) sales of non-core assets acquired pursuant to a Permitted Acquisition.
8.06 Sale and Leaseback Transactions .
The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as they property sold or transferred, except for (i) any such transactions consummated within 180 days of the acquisition by the Borrower or any Restricted Subsidiary of the asset subject to such sale and leaseback and (ii) other such transactions involving assets with an aggregate fair market value not to exceed $150,000,000.
8.07 Restricted Payments .
The Borrower will not, nor will it permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment, except:
(a) Restricted Payments payable solely in Qualified Equity Interests;
(b) Restricted Payments made by any Restricted Subsidiary of the Borrower to any Loan Party (directly or indirectly through Subsidiaries) and, in the case of dividends or other distributions paid by Subsidiaries, ratably (or on a more favorable basis from the perspective of the Borrower) to other Persons that own the applicable class of Equity Interests in such Subsidiary;
(c) in the case of a Receivables Financing SPC, to make Restricted Payments to its owners to the extent of net income or other assets available therefor under applicable law;
(d) the Borrower or any Restricted Subsidiary may redeem or repurchase Equity Interests or other stock-based awards under any stock option plan, incentive plan, compensation plan or other benefit plan from officers, employees and directors of the Borrower or any of its Subsidiaries (or their estates, spouses or former spouses) upon the death, permanent disability, retirement or termination of employment of any such Person or otherwise, so long as (i) no Event of Default has occurred and is continuing and (ii) the aggregate amount of cash used to effect Restricted Payments pursuant to this clause (d) in any Fiscal Year of the Borrower does not exceed the sum of (y) $15,000,000 plus (z) the net cash proceeds of any key-man life insurance policies of the Borrower or any Restricted Subsidiary that have not been used to make any repurchases, redemptions or payments under this Section 8.07(d) ;
108
(e) repurchases of Equity Interests or other stock-based awards under any stock option plan, incentive plan, compensation plan or other benefit plan that occur or are deemed to occur upon the exercise of any such awards to the extent representing a portion of the exercise price of such award or the withholding taxes applicable to such award;
(f) to the extent constituting Restricted Payments, the Borrower and its Subsidiaries may enter into and consummate transactions expressly permitted by Section 8.04 ;
(g) the Borrower may purchase fractional shares of its Equity Interests arising out of stock dividends, splits, combinations or business combinations (provided such transaction shall not be for the purpose of evading this limitation);
(h) the Borrower and its Restricted Subsidiaries may make Restricted Payments to consummate the Transactions;
(i) Restricted Payments made by any Restricted Subsidiary that is not a Loan Party to any other Restricted Subsidiary and, in the case of dividends or other distributions paid by Subsidiaries, ratably (or on a more favorable basis from the perspective of the Borrower) to other Persons that own the applicable class of Equity Interests in such Restricted Subsidiary;
(j) the Borrower and its Restricted Subsidiaries may make other Restricted Payments from the Available Amount so long as immediately after giving effect thereto on a Pro Forma Basis, (i) no Event of Default shall have occurred and/or be continuing or be directly or indirectly caused as a result thereof and (ii) the Borrower is in compliance with the financial covenants set forth in Section 8.11 ;
(k) the Borrower and its Restricted Subsidiaries may make other Restricted Payments using the proceeds of a substantially concurrent offering of Equity Interests (other than Disqualified Equity Interests) of the Borrower; provided that such proceeds shall not be included in the Available Amount;
(l) the Borrower and its Restricted Subsidiaries may make other Restricted Payments in an aggregate principal amount not to exceed the greater of (x) $200,000,000 and (y) 9.0% of Consolidated Total Assets (as shown on or determined in accordance with the most recent financial statements of the Borrower delivered pursuant to Section 7.01(a) or (b) prior to the date of the making thereof) so long as immediately after giving effect thereto on a Pro Forma Basis, no Event of Default shall have occurred and/or be continuing or be directly or indirectly caused as a result thereof;
(m) the Borrower and its Restricted Subsidiaries may make other Restricted Payments so long as at the time of the making thereof and after giving effect thereto on a Pro Forma Basis, (i) no Event of Default shall have occurred and/or be continuing or be directly or indirectly caused as a result thereof and (ii) the Consolidated Net Leverage Ratio is less than or equal to 3.75 to 1.00; and
(n) the Borrower and its Restricted Subsidiaries may make other Restricted Payments during a Collateral Suspension Period so long as no Event of Default shall have occurred and/or be continuing or be directly or indirectly caused as a result thereof.
109
Notwithstanding anything herein to the contrary, the foregoing provisions of Section 8.07 will not prohibit the payment of any Restricted Payment or the consummation of any redemption, purchase, defeasance or other payment within 60 days after the date of declaration thereof or the giving of notice, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Section 8.07 (it being understood that such Restricted Payment shall be deemed to have been made on the date of declaration or notice for purposes of such provision).
8.08 Transactions with Affiliates .
Except as expressly permitted by this Agreement, the Borrower will not, nor will it permit any of its Restricted Subsidiaries to, directly or indirectly enter into any transaction with any Affiliate (other than (x) transactions among the Borrower and/or one or more Restricted Subsidiaries not involving any other Affiliate and (y) transactions the terms of which are not in the good faith judgment of the Borrower materially less favorable to the Borrower and its Restricted Subsidiaries as could reasonably be expected to be obtained in a comparable transaction with a Person not an Affiliate); provided that the foregoing will not prohibit:
(a) employment, compensation, indemnification, reimbursement and severance arrangements for officers and directors of the Borrower and its Subsidiaries in the ordinary course of business or that are approved by the Board of Directors of the Borrower;
(b) transactions with any Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Borrower solely as a result of the Borrower or a Restricted Subsidiary having Control over such Person;
(c) ordinary course transactions with any Person that is an Affiliate solely as a result of the fact that a member of the Borrowers or any Restricted Subsidiarys Board of Directors is a director, officer or employee of such Person;
(d) transactions approved by a majority of the disinterested members of the Board of Directors of the Borrower;
(e) Restricted Payments permitted by Section 8.07 ;
(f) Permitted Receivables Financings;
(g) the Transaction Agreements and the transactions contemplated thereby; and
(h) transactions entered into during a Collateral Suspension Period.
8.09 Restrictive Agreements .
(a) The Borrower will not, nor will it permit any Restricted Subsidiary to, enter into, or permit to exist, any Contractual Obligation (including Organization Documents) that encumbers or restricts in any material respect the ability of any such Person to (i) in the case of any Restricted Subsidiary, pay dividends or make any other distributions to any Loan Party on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its properties or assets to any Loan Party, or (v) in the case of any Domestic Subsidiary, act as a Guarantor pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in
110
respect of any of the matters referred to in clauses (i)-(v) above) for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) applicable Law, (C) any document or instrument governing Indebtedness incurred pursuant to Section 8.01(d) ; provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (D) Indebtedness of a Subsidiary which is not a Loan Party which is permitted by Section 8.01 , so long as the Borrower has determined that such restrictions do not materially impair the ability of the Loan Parties (taken as a whole) to perform their obligations under this Agreement, (E) any restrictions regarding licenses or sublicenses by the Borrower and its Subsidiaries of Intellectual Property in the ordinary course of business (in which case such restriction shall relate only to such Intellectual Property), (F) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or assets pending such sale; provided that such restrictions and conditions apply only to the Subsidiary or assets that are to be sold and such sale is permitted hereunder, (G) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the assets securing such Indebtedness, (H) customary provisions in leases and other contracts restricting the assignment thereof, (I) customary restrictions contained in documents executed in connection with any Permitted Receivables Financing, (J) any Lien permitted hereunder or any document or instrument governing any such Lien; provided that any such restriction contained therein relates only to the asset or assets subject to such Lien, (K) any indenture agreement, instrument or other arrangement relating to the assets or business of any Restricted Subsidiary and existing prior to the consummation of the Permitted Acquisition in which such Subsidiary was acquired; (L) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 8.04 and applicable solely to such joint venture and/or Equity Interests therein, (M) restrictions contained in subordination provisions relating to intercompany Indebtedness, (N) any agreements existing on the Closing Date and set forth on Schedule 8.09 , (O) restrictions in the indenture governing the Senior Notes as in effect on the Closing Date or contained in any agreements governing other Indebtedness issued following the Closing Date so long as not materially more restrictive (as determined in good faith by the Borrower) than the terms applicable under the indenture governing the Senior Notes as in effect on the Closing Date, (P) restrictions applicable to any Person at the time such Person becomes a Subsidiary so long as such restriction applies on to such Person and its Subsidiaries and was not entered into in contemplation of such Person becoming a Subsidiary, (Q) restrictions entered into during a Collateral Suspension Period; (R) replacements, renewals, amendments and refinancings of any agreements described above so long as such replacement, renewals, amendments and refinancings are not materially more restrictive than the terms of the agreement being replaced, renewed, amended or refinanced; and (S) restrictions in respect of assets that, taken as a whole, are immaterial, provided that in good faith judgment of the Borrower, such conditions would not have a material adverse effect on the ability of any Loan Party to satisfy its Obligations hereunder.
(b) The Borrower will not, nor will it permit any Guarantor to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets to secure the Obligations pursuant to the Loan Documents, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for the Obligations except (i) pursuant to this Agreement and the other Loan Documents, (ii) pursuant to applicable Law, (iii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 8.01(d) ; provided that in the case of Section 8.01(d) any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith (and any accessions, products or proceeds thereof), (iv) customary restrictions and conditions contained in agreements relating to the sale of
111
a Subsidiary or assets pending such sale; provided that such restrictions and conditions apply only to the Subsidiary or assets that are to be sold and such sale is permitted hereunder, (v) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the assets securing such Indebtedness, (vi) customary provisions in leases and other contracts restricting the assignment thereof, (vii) pursuant to the documents executed in connection with any Permitted Receivables Financing (but only to the extent that the related prohibitions against other encumbrances pertain to the applicable Transferred Assets actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such Permitted Receivables Financing), (viii) restrictions in any document or instrument governing any Permitted Lien; provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien, (ix)) software and other Intellectual Property licenses pursuant to which the Borrower or Subsidiary is the licensee of the relevant software or Intellectual Property, as the case may be (in which case, any prohibition or limitation shall relate only to the assets subject of the applicable license), (x) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 8.04 and applicable solely to such joint venture and/or Equity Interests therein, (xi) any agreements existing on the Closing Date and set forth on Schedule 8.09 , (xii) restrictions in the indenture governing the Senior Notes as in effect on the Closing Date or contained in any agreements governing other Indebtedness issued following the Closing Date so long as not materially more restrictive (as determined in good faith by the Borrower) than the terms applicable under the indenture governing the Senior Notes as in effect on the Closing Date, (xiii) restrictions entered into during any Collateral Suspension Period, (xiv) replacements, renewals, amendments and refinancings of any agreements described above so long as such replacement, renewals, amendments and refinancings are not materially more restrictive than the terms of the agreement being replaced, renewed, amended or refinanced, and (xv) restrictions in respect of assets that, taken as a whole, are immaterial, provided that in good faith judgment of the Borrower, such conditions would not have a material adverse effect on the ability of any Loan Party to satisfy its Obligations hereunder.
8.10 Prepayments of Specified Indebtedness and Amendments to Specified Indebtedness and Organizational Documents .
(a) The Borrower will not, nor will it permit any Restricted Subsidiary to, optionally make any prepayment, repurchase, redemption, defeasance or otherwise retire or acquire for value (collectively, prepayments ) any principal of Specified Indebtedness other than:
(i) prepayments in exchange for or from the proceeds of Qualified Equity Interests or Permitted Refinancing Indebtedness ( provided that such proceeds or reduction in Indebtedness shall not increase the Available Amount);
(ii) the Borrower and its Restricted Subsidiaries may make other prepayments from the Available Amount so long as immediately after giving effect thereto on a Pro Forma Basis, (x) no Event of Default shall have occurred and be continuing or be directly or indirectly caused as a result thereof and (y) the Borrower is in compliance with the financial covenants set forth in Section 8.11 ;
(iii) the Borrower and its Restricted Subsidiaries may make other prepayments in lieu of Restricted Payments permitted by Section 8.07(j) (and which shall constitute usage of such provision for purposes of determining the amount of Restricted Payments permitted thereunder);
112
(iv) the Borrower and its Restricted Subsidiaries may make other prepayments so long as immediately after giving effect thereto on a Pro Forma Basis, (i) no Event of Default shall have occurred and be continuing or be directly or indirectly caused as a result thereof and (ii) the Consolidated Net Leverage Ratio is less than or equal to 3.75 to 1.00; and
(v) the Borrower and its Restricted Subsidiaries may make other prepayments during a Collateral Suspension Period so long as no Event of Default shall have occurred and be continuing or be directly or indirectly caused as a result thereof.
(b) Except during a Collateral Suspension Period, the Borrower will not, and will not permit any Restricted Subsidiary to, amend or modify (i) the Senior Notes or any of their Organization Documents, in either case, in a manner that is, taken as a whole, materially adverse to the Lenders or (ii) any other Specified Indebtedness in a manner that would result in such Indebtedness having terms that would not have been permitted at the time of issuance pursuant to the provision of Section 8.01 pursuant to which such Indebtedness was issued.
8.11 Financial Covenants .
(a) Consolidated Net Leverage Ratio . The Borrower shall not permit the Consolidated Net Leverage Ratio as of the end of any Fiscal Quarter (commencing as of the end of the first full Fiscal Quarter after the Closing Date) of the Borrower to be greater than (i) as of the end of any Fiscal Quarter during a Collateral Suspension Period, 3.50 to 1.00 and (ii) as of the end of any Fiscal Quarter during any other period the applicable ratio set forth below:
Fiscal Quarter Ending: |
Maximum Permitted Level |
|
After the Closing Date and on or prior to May 28, 2017 | 5.50 to 1.00 | |
After May 28, 2017 and on or prior to February 25, 2018 | 5.25 to 1.00 | |
After February 25, 2018 and on or prior to November 25, 2018 | 5.00 to 1.00 | |
After November 25, 2018 and on or prior to August 25, 2019 | 4.75 to 1.00 | |
After August 25, 2019 | 4.50 to 1.00 |
(b) Consolidated Interest Coverage Ratio . The Borrower shall not permit the Consolidated Interest Coverage Ratio as of the end of any Fiscal Quarter (commencing as of the end of the first full Fiscal Quarter after the Closing Date) of the Borrower to be less than 2.75 to 1.0.
113
8.12 Sanctions; Anti-Corruption Laws .
The Loan Parties will not permit any Loan or use the proceeds of any Credit Extension, directly or indirectly, or lend, contribute or otherwise make available such proceeds to any Subsidiaries, joint venture partner or other individual or entity, or in any Designated Jurisdiction that at the time of such finding, (a) is the subject of any Sanctions; or (b) in any other manner that will result in any violation by any Person (including any Lender, any Arranger, the Administrative Agent, any L/C Issuer or the Swing Line Lender) of any Sanctions.
The Loan Parties will not use the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
9.01 Events of Default .
Any of the following shall constitute an Event of Default :
(a) Non-Payment of Principal . The Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any L/C Obligation when and as the same shall become due and payable (and in the currency required hereunder), whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) Non-Payment of Other Amounts . The Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in Section 9.01(a) ) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;
(c) Representations and Warranties . Any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been false or incorrect in any material respect when made or deemed made;
(d) Non-Compliance with Specific Covenants . Any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 7.02(a) , 7.03 (with respect to the Borrowers existence), 7.08 or in Article VIII ;
(e) Other Non-Compliance . Any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those which constitute a default under another Section of this Article IX ), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent;
(f) Payment Default of Material Indebtedness . The Borrower or any Restricted Subsidiary shall fail to make any payment of principal or interest (regardless of amount) in
114
respect of any Material Indebtedness, when and as the same shall become due and payable beyond the period of grace, if any, provided in the instrument or agreement under which such Material Indebtedness was created;
(g) Cross-Default to Material Indebtedness . Any event or condition (other than (1) any required prepayment of Indebtedness secured by a Permitted Lien that becomes due as the result of the disposition of the assets subject to such Lien so long as such disposition is permitted by this Agreement or (2) any required repurchase, repayment or redemption of (or offer to repurchase, repay or redeem) any Indebtedness that was incurred for the specified purpose of financing all or a portion of the consideration for a merger or acquisition provided that (x) such repurchase, repayment or redemption (or offer to repurchase, repay or redeem) results solely from the failure of such merger or acquisition to be consummated, (y) such Indebtedness is repurchased, repaid or redeemed in accordance with its terms and (z) no proceeds of the Credit Extensions are used to make such repayment, repurchase or redemption) occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
(h) Involuntary Proceedings, Etc . An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan Party or any Material Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar Debtor Relief Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Material Restricted Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 consecutive days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) Voluntary Proceedings, Etc . Any Loan Party or any Material Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar Debtor Relief Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 9.01(h) , (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or such Material Restricted Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j) Inability to Pay Debts . The Borrower or any Restricted Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k) Judgments . One or more judgments for the payment of money in an aggregate amount in excess of $100,000,000 (to the extent not covered by insurance or other creditworthy indemnitor) shall be rendered against the Borrower or any Material Restricted Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any material assets of the Borrower or any Restricted Subsidiary to enforce any such judgment;
115
(l) ERISA . An ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(m) Change of Control . A Change of Control shall occur;
(n) Invalidity of Loan Documents . Any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in action or inaction based on such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or
(o) other than as a result of the occurrence of a Collateral Suspension Period, any security interest and Lien purported to be created by any Collateral Document in respect of any material Collateral shall cease to be in full force and effect, or shall cease to give the Administrative Agent, for the benefit of the holders of the Obligations, the Liens, rights, powers and privileges purported to be created and granted under such Collateral Document (including a perfected first priority security interest in and Lien on all of the Collateral thereunder (except for Permitted Liens and as otherwise expressly provided in this Agreement or in such Collateral Document)) in favor of the Administrative Agent, or shall be asserted by Borrower or any other Loan Party not to be a valid, perfected, first priority (except for Permitted Liens and as otherwise expressly provided in this Agreement or such Collateral Document) security interest in or Lien on Collateral with a fair market value in excess of $50,000,000 covered thereby.
9.02 Remedies Upon Event of Default .
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the Commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such Commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto); and
(d) exercise on behalf of itself, the Lenders and the L/C Issuers all rights and remedies available to it, the Lenders and the L/C Issuers under the Loan Documents or applicable Law or at equity;
provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to
116
make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
9.03 Application of Funds .
After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02 ), any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.14 and 2.15 , be applied by the Administrative Agent in the following order:
First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III ) payable to the Administrative Agent in its capacity as such;
Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and any L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer and amounts payable under Article III ), ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third , to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Third held by them;
Fourth , to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, (b) payment of Obligations then owing under any Secured Hedge Agreements, (c) payments of Obligations then owing under any Secured Cash Management Agreements and (d) Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders, the L/C Issuers, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them; and
Last , the balance, if any, after all of the Obligations (other than contingent obligations for which no claim has been asserted) have been paid in full, to the Borrower or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.14 , amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied in the order set forth above.
Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or such Guarantors assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.
117
ARTICLE X
ADMINISTRATIVE AGENT
10.01 Appointment and Authority .
Each of the Lenders and the L/C Issuers hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Except as expressly provided in Section 10.06 , the provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and no Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term agent herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
The Administrative Agent shall also act as the collateral agent under the Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing Line Lender (if applicable), potential Hedge Banks and potential Cash Management Banks) and the L/C Issuers hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as collateral agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article X and Article XI (including Section 11.04(c) , as though such co-agents, sub-agents and attorneys-in-fact were the collateral agent under the Loan Documents) as if set forth in full herein with respect thereto. The Lenders authorize the Administrative Agent to enter into any Permitted Intercreditor Agreement and one or more intercreditor agreements with a Receivables Financier in connection with a Permitted Receivables Financing.
10.02 Rights as a Lender .
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term Lender or Lenders shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
10.03 Exculpatory Provisions .
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
118
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any such action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 9.02 ) or (ii) in the absence of its own bad faith, gross negligence, willful misconduct or material breach of this Agreement or any other Loan Document as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by a Loan Party, a Lender or an L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
10.04 Reliance by Administrative Agent .
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) reasonably believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the
119
satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan or the issuance, extension, renewal or increase of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
10.05 Delegation of Duties .
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with bad faith, gross negligence or willful misconduct in the selection of such sub-agents.
10.06 Resignation of Administrative Agent .
(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower at all times other than during the existence of a Specified Event of Default (which consent shall not be unreasonably withheld, conditioned or delayed), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the Resignation Effective Date ), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, with the consent of the Borrower at all times other than during the existence of a Specified Event of Default (which consent shall not be unreasonably withheld, conditioned or delayed), appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days (or such earlier day as shall be agreed by the Required Lenders) (the Removal Effective Date ), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its
120
duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each L/C Issuer directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successors appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agents resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including (a) acting as collateral agent or otherwise holding any collateral security on behalf of any of the Lenders and (b) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.
(d) Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as an L/C Issuer and the Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c) . If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c) . Upon the appointment by the Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender) and the acceptance of such appointment by the applicable Lender, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of an L/C Issuer or Swing Line Lender, as applicable, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations in such capacity hereunder or under the other Loan Documents and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.
121
10.07 Non-Reliance on Administrative Agent and Other Lenders .
Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
10.08 No Other Duties; Etc.
Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents or co-agents shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
10.09 Administrative Agent May File Proofs of Claim; Credit Bidding .
In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations arising under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Sections 2.03(h) , 2.03(i) , 2.09 and 11.04 ) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04 .
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or L/C Issuer in any such proceeding.
122
The holders of the Obligations hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the holders thereof shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles to make a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 11.01 of this Agreement, (iii) the Administrative Agent shall be authorized to assign the relevant Obligations to any such acquisition vehicle pro rata by the Lenders, as a result of which each of the Lenders shall be deemed to have received a pro rata portion of any Equity Interests and/or debt instruments issued by such an acquisition vehicle on account of the assignment of the Obligations to be credit bid, all without the need for any Lender or acquisition vehicle to take any further action, and (iv) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Lender or any acquisition vehicle to take any further action.
10.10 Collateral and Guaranty Matters .
Without limiting the provisions of Section 10.09 , each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Issuers irrevocably authorize the Administrative Agent, at its option and in its discretion, but subject to Section 11.20 ,
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the aggregate Revolving Commitments and payment in full of the Obligations (other than (A) contingent indemnification obligations, tax gross-up, expense reimbursement or yield protection obligations, in each case, for which no claim has been made that is unsatisfied and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements) and the expiration or termination of all Letters of Credit (other than Letters of Credit that have been Cash Collateralized or as to which other arrangements satisfactory to the Administrative Agent and the applicable L/C Issuer shall have been made), (ii) that is sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted hereunder or under any other Loan Document, (iii) as
123
approved in accordance with Section 11.01 , (iv) when such property is subject to Liens permitted under Section 8.02(e) (solely to the extent that the Administrative Agents Liens on such assets violate the terms of the documentation governing such Lien) and, to the extent relating to extensions, renewals or replacements of such Liens, Section 8.02(l) or Section 8.02(f) or (v) upon a Collateral Suspension Period;
(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 8.02(e) ; and
(c) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents or is designated an Unrestricted Subsidiary in accordance with Section 7.10(e) .
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agents authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty, pursuant to this Section 10.10 .
The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agents Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.
10.11 Secured Cash Management Agreements and Secured Hedge Agreements .
No Cash Management Bank or Hedge Bank that obtains the benefit of Section 9.03 , the Guaranty or any Collateral by virtue of the provisions hereof or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements in the case of a Maturity Date.
124
ARTICLE XI
MISCELLANEOUS
11.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that
(a) no such amendment, waiver or consent shall:
(i) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02 ) without the written consent of such Lender whose Commitment is being extended or increased (it being understood and agreed that a waiver of any condition precedent set forth in Section 5.02 or of any Default, mandatory prepayment or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender);
(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled reduction of the Commitments hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such payment or whose Commitments are to be reduced;
(iii) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (i) of the final proviso to this Section 11.01 ) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such amount; provided , however , that only the consent of the Required Lenders shall be necessary (A) to amend the definition of Default Rate or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (B) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;
(iv) change Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender adversely affected thereby;
(v) amend Section 1.08 or the definition of Alternative Currency without the written consent of each Lender directly affected thereby;
(vi) change (A) any provision of this Section 11.01(a) or the definition of Required Lenders without the written consent of each Lender directly affected thereby, or (B) the definition of Required Revolving A Lenders without the written consent of each Revolving A Lender;
(vii) except in connection with a transaction permitted under Section 8.05 or during a Collateral Suspension Period, release all or substantially all of the Collateral without the written consent of each Lender whose Obligations are secured by such Collateral;
(viii) release the Borrower without the consent of each Lender or, except in connection with a transaction permitted under Section 8.02 or Section 8.05 , all or substantially all of the value of the Guaranty without the written consent of each Lender whose Obligations are guaranteed thereby, except to the extent such release is permitted pursuant to Section 10.10 (in which case such release may be made by the Administrative Agent acting alone); or
(ix) waive any condition set forth in Section 5.01 without the consent of each Lender.
125
(b) unless also signed by each L/C Issuer, no amendment, waiver or consent shall affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it;
(c) unless also signed by the Swing Line Lender, no amendment, waiver or consent shall affect the rights or duties of the Swing Line Lender under this Agreement; and
(d) unless also signed by the Administrative Agent, no amendment, waiver or consent shall affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document;
provided , further , that notwithstanding anything to the contrary herein, (i) each Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (ii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein, and (iii) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders; provided , further , the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement and any guarantees, collateral security documents and related documents executed by any Loan Party to (A) cure any ambiguity, omission, defect or inconsistency, in each case, of a technical or immaterial nature, (B) comply with local Law or advice of local counsel or (C) cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents, so long as (x) in each case, such amendment, modification or supplement does not directly adversely affect any right of any Agent or Lender, and (y) with respect to clause (A) above, the Required Lenders shall not have objected in writing within five (5) Business Days of such amendment.
With respect to any matter requiring the approval of each Lender, each Lender directly and adversely affected thereby or other specified Lenders, it is understood that Voting Participants shall have the voting rights specified in Section 11.06(e) as to such matter.
No Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of such Defaulting Lender may not be increased or extended nor any principal amount owed to such Lender reduced, or the maturity thereof extended, without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.
11.02 Notices; Effectiveness; Electronic Communications .
(a) Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to any Loan Party, the Administrative Agent, Bank of America in its capacity as an L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.02 ; and
(ii) if to any other Lender, any Voting Participant or any L/C Issuer, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).
126
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications . Notices and other communications to the Lenders, the Voting Participants, and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender, Voting Participant or L/C Issuer pursuant to Article II if such Lender, Voting Participant or L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent, the Swing Line Lender, any Voting Participant, any L/C Issuer or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the senders receipt of an acknowledgement from the intended recipient (such as by the return receipt requested function, as available, return e-mail or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) , if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c) The Platform . THE PLATFORM IS PROVIDED AS IS AND AS AVAILABLE. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY
127
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the Agent Parties ) have any liability to the Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Partys or the Administrative Agents transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service, or through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Agent Party or such Agent Partys material breach of its obligations hereunder; provided , however , that in no event shall any Agent Party have any liability to the Borrower, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc . Each of the Borrower, the Administrative Agent, each L/C Issuer and the Swing Line Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the Private Side Information or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lenders compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the Public Side Information portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.
(e) Reliance by Administrative Agent, L/C Issuers and Lenders . The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Loan Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly given by or on behalf of any Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Loan Parties shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Loan Party, except to the extent that such losses, costs, expenses or liabilities are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Agent, L/C Issuer, Lender or Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
128
11.03 No Waiver; Cumulative Remedies; Enforcement .
No failure by any Lender, any L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document (including the imposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders and the L/C Issuers; provided , however , that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13 ), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13 , any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
11.04 Expenses; Indemnity; Damage Waiver .
(a) Costs and Expenses . The Borrower and the Guarantors, jointly and severally, shall pay (A) all reasonable and documented out of pocket expenses incurred by the Administrative Agent and its Affiliates (in the case of legal fees and expenses, limited to the reasonable fees, charges and disbursements of one primary outside counsel for the Administrative Agent and if reasonably necessary or appropriate, one local counsel in each relevant jurisdiction to the extent in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (B) all reasonable out of pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit issued by it or any demand for payment thereunder and (C) all reasonable out of pocket expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (in the case of legal fees and expenses, limited to the fees, charges and disbursements of one primary outside counsel for all such persons taken as a whole (and, solely in the case of a conflict of interest, one additional counsel for all such persons taken as whole in each relevant jurisdiction) and if reasonably necessary or appropriate, one local counsel in each relevant jurisdiction (and solely in the case of a conflict of interest, one additional conflicts counsel)) in connection with the enforcement or protection of its rights to the extent (1) in connection with this Agreement and the other Loan Documents, including its rights under this
129
Section, or (2) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Loan Parties . The Borrower and the Guarantors, jointly and severally, shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and each L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an Indemnitee ) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (in the case of legal fees and expenses, limited to the fees, charges and disbursements of one primary outside counsel for all such persons taken as a whole (and, solely in the case of a conflict of interest, one additional counsel for all such persons taken as whole in each relevant jurisdiction) and if reasonably necessary or appropriate, one local counsel in each relevant jurisdiction (and solely in the case of a conflict of interest, one additional conflicts counsel)) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Loan Party) other than such Indemnitee and its Related Parties to the extent arising out of, in connection with, or as a result of (A) the execution, enforcement or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01) , (B) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit issued by it if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (C) any actual or alleged presence or Release of Hazardous Materials at, on, under or from any property currently or formerly owned or operated by a Loan Party or any of its Subsidiaries, or any Environmental Liability related in any way to a Loan Party or any of its Subsidiaries, or (D) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party, and regardless of whether any Indemnitee is a party thereto , IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE ; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or such Indemnitees material breach of its obligations hereunder or under any other Loan Documents of such Indemnitee, or (y) arise out of any investigation, litigation or proceeding that does not involve an act or omission by the Borrower or any other Loan Party and arises solely from a dispute among Indemnitees (except when and to the extent that one of the parties to such dispute was acting in its capacity as an agent, arranger, bookrunner, L/C Issuer or other agency capacity and, in such case, excepting only such party). Without limiting the provisions of Section 3.01(c) , this Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) Reimbursement by Lenders . To the extent that the Loan Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by them to the Administrative Agent (or any sub-agent thereof), any L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer, the Swing Line Lender or such
130
Related Party, as the case may be, such Lenders pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lenders share of the Total Credit Exposures of all Lenders at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lenders Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided , further that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), such L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), such L/C Issuer or the Swing Line Lender in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d) .
(d) Waiver of Consequential Damages, Etc . To the fullest extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the bad faith, gross negligence or willful misconduct of such Indemnitee or a material breach of such Indemnitees obligations hereunder or under any other Loan Document as determined by a final and nonappealable judgment of a court of competent jurisdiction.
(e) Payments . All amounts due under this Section shall be payable not later than ten Business Days after written (in reasonable detail) demand therefor.
(f) Survival . The agreements in this Section and the indemnity provisions of Section 11.02(e) shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations.
11.05 Payments Set Aside .
To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent permitted by applicable law and to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is
131
made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuers under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
11.06 Successors and Assigns .
(a) Successors and Assigns Generally . The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder or thereunder (other than, except with respect to the Borrower, as a result of a transaction permitted under Section 8.03 , 8.04 and 8.05 ) without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders . Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts .
(A) in the case of an assignment of the entire remaining amount of the assigning Lenders Commitment and the related Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in subsection (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if Trade Date is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 in the case of any assignment in respect of a Revolving Commitment (and the related Revolving Loans thereunder) and $1,000,000 in the case of any assignment in respect of a Term Loan unless each of the Administrative Agent and, so long as no Event of Default has occurred and
132
is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided that such consent shall not be required if a Lender assigns to one or more of its Affiliates.
(ii) Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders Loans and Commitments, and rights and obligations with respect thereto, assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lenders rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations in respect of its Revolving Commitment (and the related Revolving Loans thereunder) and its outstanding Term Loans on a non-pro rata basis;
(iii) Required Consents . No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) a Specified Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund or, with respect to the Revolving A Commitments, such assignment is to a Revolving A Lender; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received written notice thereof in accordance with Section 11.02 ;
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (1) any unfunded Incremental Term Loan Commitment or any Revolving Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable facility subject to such assignment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (2) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and
(C) the consent of the L/C Issuers and the Swing Line Lender (such consents not to be unreasonably withheld or delayed) shall be required for any assignment in respect of Revolving A Loans and Revolving A Commitments (other than an assignment by a Revolving A Lender to any of its Affiliates).
(iv) Assignment and Assumption . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 (to be paid by the assignor or assignee); provided , however , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons . No such assignment shall be made to (A) the Borrower or any of the Borrowers Affiliates or Subsidiaries, (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) a natural Person (or to a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person).
133
(vi) Certain Additional Payments . In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, any L/C Issuer or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01 (subject to the requirements thereof, including Section 3.01(e) ), 3.04 , 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment); provided , that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
(c) Register . The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agents Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the Register ). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
134
(d) Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person, a Defaulting Lender or the Borrower or any of the Borrowers Affiliates or Subsidiaries) (each, a Participant ) in all or a portion of such Lenders rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lenders participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to the existence of any participation.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in Section 11.01(a) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01 , 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (subject to the requirements and limitations therein, including the requirements under Section 3.01(e) , it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04 , with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrowers request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participants interest in the Loans or other obligations under the Loan Documents (the Participant Register ); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participants interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
135
(e) Voting Participants . Notwithstanding anything in this Section 11.06 to the contrary, any Farm Credit Lender that (i) has purchased a participation from any Lender that is a Farm Credit Lender in the minimum amount of $5,000,000 on or after the Closing Date, (ii) is, by written notice to the Borrower and the Administrative Agent in substantially the form of Exhibit H (a Voting Participant Notification ), designated by the selling Lender as being entitled to be accorded the rights of a voting participant hereunder (any Farm Credit Lender so designated being called a Voting Participant ) and (iii) receives the prior written consent of the Borrower and the Administrative Agent to become a Voting Participant (such consents to be required only to the extent and under the circumstances it would be required if such Voting Participant were to become a Lender pursuant to an assignment in accordance with Section 11.06(b) , it being understood and agreed that such consent is not required in connection with the sale of any participation to an existing Voting Participant; provided that the Borrower shall be deemed to have consented to any such sale of a participation unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof), shall be entitled to vote (and the voting rights of the selling Lender shall be correspondingly reduced), on a dollar for dollar basis, as if such Voting Participant were a Lender, on any matter requiring or allowing a Lender to provide or withhold its consent, or to otherwise vote on any proposed action, in each case, in lieu of the vote of the selling Lender; provided , however , that if such Voting Participant has at any time failed to fund any portion of its participation when required to do so and notice of such failure has been delivered by the selling Lender to the Administrative Agent, then until such time as all amounts of its participation required to have been funded have been funded and notice of such funding has been delivered by the selling Lender to the Administrative Agent, such Voting Participant shall not be entitled to exercise its voting rights pursuant to the terms of this clause (e), and the voting rights of the selling Lender shall not be correspondingly reduced by the amount of such Voting Participants participation. Notwithstanding the foregoing, each Farm Credit Lender designated as a Voting Participant on Schedule 11.06(e) shall be a Voting Participant without delivery of a Voting Participant Notification and without the prior written consent of the Borrower and the Administrative Agent. To be effective, each Voting Participant Notification shall, with respect to any Voting Participant, (A) state the full name of such Voting Participant, as well as all contact information required of an assignee as set forth in the Administrative Questionnaire, (B) state the dollar amount of the participation purchased and (C) include such other information as may be required by the Administrative Agent. The selling Lender and the Voting Participant shall notify the Administrative Agent and the Borrower within three Business Days of any termination of, or reduction or increase in the amount of, such participation and shall promptly upon request of the Administrative Agent update or confirm there has been no change in the information set forth in Schedule 11.06(e) or delivered in connection with any Voting Participant Notification (and for the avoidance of doubt the voting rights of any Voting Participant shall be appropriately reduced upon any reduction of such Voting Participants participation interest). The Borrower and the Administrative Agent shall be entitled to conclusively rely on information provided by a Lender identifying itself or its participant as a Farm Credit Lender without verification thereof and may also conclusively rely on the information set forth in Schedule 11.06(e) , delivered in connection with any Voting Participant Notification or otherwise furnished pursuant to this clause (e) and, unless and until notified thereof in writing by the selling Lender, may assume that there have been no changes in the identity of Voting Participants, the dollar amount of participations, the contact information of the participants or any other information furnished to the Borrower or the Administrative Agent pursuant to this clause (e). The voting rights hereunder are solely for the benefit of the Voting Participants and shall not inure to any assignee or participant of a Voting Participant (except to the extent of a sale of a participation otherwise in compliance with the terms of this Section 11.06(e) ).
136
(f) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Resignation as L/C Issuer or Swing Line Lender after Assignment . Notwithstanding anything to the contrary contained herein, if at any time a Lender acting as an L/C Issuer or the Swing Line Lender assigns all of its Revolving A Commitment and Revolving A Loans pursuant to subsection (b) above, such Lender may, (i) upon thirty days notice to the Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon thirty days notice to the Borrower, resign as the Swing Line Lender. In the event of any such resignation as an L/C Issuer or the Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders (with such Lenders consent) a successor L/C Issuer or Swing Line Lender hereunder; provided , however , that (x) no failure by the Borrower to appoint any such successor shall affect the resignation of such Lender as an L/C Issuer or the Swing Line Lender, as the case may be, and (y) any successor L/C Issuer must be approved by the Administrative Agent (such approval to not be unreasonably withheld, conditioned or delayed). If a Lender resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it and outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c) ). If a Lender resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c) . Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, and the acceptance of such appointment by the applicable Lender, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the resigning L/C Issuer or Swing Line Lender, as the case may be. At the option of the Borrower, a successor L/C Issuer or another existing L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the resigning L/C Issuer and outstanding at the time of such resignation or make other arrangements satisfactory to the resigning L/C Issuer to effectively assume the obligations of the resigning L/C Issuer with respect to such Letters of Credit.
11.07 Treatment of Certain Information; Confidentiality .
Each of the Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or any Eligible Assignee invited to become a Lender
137
pursuant to Section 2.01(d) or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating any Loan Party or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or an agreement referenced in clause (f) of this Section or (y) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower (which source is not known by the recipient to be in breach of confidentiality obligations with the Borrower or any Subsidiary). In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.
For purposes of this Section, Information means all information received from a Loan Party or any Subsidiary relating to the Loan Parties or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential basis prior to disclosure by such Loan Party or any Subsidiary (other than any such information received from a source that is known by the recipient to be in breach of confidentiality obligations with such Loan Party or any Subsidiary). Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledges that (a) the Information may include material non-public information concerning a Loan Party or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.
11.08 Rights of Setoff .
If an Event of Default shall have occurred and be continuing, each Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such L/C Issuer or any such Affiliate to or for the credit or the account of any Loan Party against any and all of the obligations of such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or L/C Issuer or their respective Affiliates, irrespective of whether or not such Lender, such L/C Issuer or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Loan Party may be contingent or unmatured or are owed to a branch or office or Affiliate of such Lender or L/C Issuer different from the branch or office or Affiliate holding such deposit or obligated on such indebtedness; provided , that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to
138
such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, L/C Issuer or their respective Affiliates may have. Each Lender and L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
11.09 Interest Rate Limitation .
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the Maximum Rate ). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
11.10 Counterparts; Integration; Effectiveness .
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or an L/C Issuer constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01 , this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g., pdf or tif) shall be effective as delivery of a manually executed counterpart of this Agreement.
11.11 Survival of Representations and Warranties .
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification, tax gross up, expense reimbursement or yield protection obligations, in each case, for which no claim has been made) or any Letter of Credit shall remain outstanding and not Cash Collateralized.
11.12 Severability .
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement
139
and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 11.12 , if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, a L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
11.13 Replacement of Lenders .
If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06 , or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06 ), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04 ) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.06(b) ;
(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01 , such assignment will result in a reduction in such compensation or payments thereafter;
(d) such assignment does not conflict with applicable Laws; and
(e) in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent;
provided that the failure by such Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Lender and the mandatory assignment of such Lenders Commitments and outstanding Loans and participations in L/C Obligations and Swing Line Loans pursuant to this Section 11.13 shall nevertheless be effective without the execution by such Lender of an Assignment and Assumption.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
140
11.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION . EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE . EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS . EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
141
11.15 Waiver of Jury Trial .
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.16 No Advisory or Fiduciary Responsibility .
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Loan Parties acknowledges and agrees (on behalf of itself and its Affiliates), that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Arrangers, the L/C Issuers and the Lenders are arms-length commercial transactions between the Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent, the Arrangers, the L/C Issuers and the Lenders, on the other hand, (B) each of the Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Loan Parties is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Arrangers, the L/C Issuers and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan Parties or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, any Arranger, any L/C Issuer nor any Lender has any obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Arrangers, the L/C Issuers, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their respective Affiliates, and neither the Administrative Agent, any Arranger, any L/C Issuer nor any Lender has any obligation to disclose any of such interests to the Loan Parties and their respective Affiliates. Each of the Loan Parties hereby agrees that it will not claim that any of the Administrative Agent, Arrangers, L/C Issuers or Lenders and their respective affiliates owes a fiduciary duty or similar duty to it in connection with any aspect of any transaction contemplated hereby.
11.17 Electronic Execution of Assignments and Certain Other Documents .
The words execute, execution, signed, signature, and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Loan Notices, Swing Line Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
142
Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.
11.18 USA PATRIOT Act Notice .
Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the Act), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Loan Parties in accordance with the Act. The Loan Parties shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable know your customer and anti-money laundering rules and regulations, including the Act.
11.19 Judgment Currency .
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Borrower in respect of any such sum due from it to the Administrative Agent or the Lenders hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the Judgment Currency ) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the Agreement Currency ), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent from the Borrower in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent in such currency, the Administrative Agent agrees to return the amount of any excess to the Borrower (or to any other Person who may be entitled thereto under applicable Law).
11.20 Release of Collateral and Guaranty Obligations .
(a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower in connection with any sale, disposition or Permitted Receivables Financing permitted by the Loan Documents, the Administrative Agent shall (without notice to, or vote or consent of, any Lender), at the expense of the Borrower, take such actions as shall be reasonably required to release its security interest in any Collateral sold or disposed of (or sold, conveyed or contributed to any Permitted Receivables Financing, including, without limitation, entering into a customary intercreditor agreement with a Receivables Financier), and to release any Guaranty under any Loan Document of any Person sold or disposed of (and to release any Liens with respect to assets of such Person, release such Person from all Loan Documents such Person is a party to and release any other Obligations of such Person arising under the Loan Documents), upon consummation of such sale or disposition in accordance with the Loan Documents in each case, other than any sale or disposition to another Loan Party.
143
(b) Notwithstanding anything to the contrary contained herein or in any other Loan Document, at such time as (1) a Collateral Suspension Period is continuing or (2) (a) all principal of and interest accrued to such date which constitute Obligations shall have been paid in full in cash, (b) all fees, expenses and other amounts then due and payable which constitute Obligations (other than contingent obligations for which no claim has been asserted) shall have been paid in cash, (c) all outstanding Letters of Credit shall have been (i) terminated or (ii) fully Cash Collateralized, and (d) the Commitments shall have expired or been terminated in full, the Administrative Agents Lien and the Collateral is automatically released and the Administrative Agent shall at the expense of the Borrower take such actions as shall be reasonably required to evidence the release of its security interest in all Collateral and to release any Guaranty under any Loan Document.
(c) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower, (x) in connection with any Indebtedness permitted by Section 8.01(d) hereof (solely to the extent required in writing by the holder of any related Lien permitted pursuant to Section 8.02(e) hereof), the Administrative Agent shall (without notice to, or vote or consent of, any Lender), at the expense of the Borrower, take such actions as shall be reasonably required to release its security interest in any Collateral subject to such Lien, (y) upon designation of any Restricted Subsidiary as an Unrestricted Subsidiary pursuant to Section 7.10(e) hereof, release the Guaranty under any Loan Document of any such designated Unrestricted Subsidiary and release any Liens granted by such designated Unrestricted Subsidiary and release such designated Unrestricted Subsidiary from all Loan Documents such designated Unrestricted Subsidiary is a party to and release all Obligations of such designated Unrestricted Subsidiary arising under the Loan Documents and (z) in connection with any Liens permitted by Section 8.02(f) , the Administrative Agent shall release its Liens on any assets subject to such Liens permitted under Section 8.02(f) , to the extent that the Administrative Agents Liens on such assets violate the express terms of the documentation governing such Lien.
11.21 Entire Agreement .
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
11.22 Acknowledgement and Consent to Bail-In of EEA Financial Institutions .
Solely to the extent any Lender or L/C Issuer that is an EEA Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(i) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender or L/C Issuer that is an EEA Financial Institution; and
(ii) the effects of any Bail-In Action on any such liability, including, if applicable:
(A) | a reduction in full or in part or cancellation of any such liability; |
144
(B) | a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or |
(C) | the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority. |
11.23 Waiver of Borrower Rights .
Each Loan Party acknowledges and agrees that, to the extent the provisions of the Agricultural Credit Act of 1987, including 12 U.S.C §§ 2199 through 2202e, and the implementing Farm Credit Administration regulations, 12 C.F.R. § 617.7000, et seq . (collectively, the Farm Credit Law ) apply to such Loan Party or to the transactions contemplated by this Agreement, such Loan Party hereby irrevocably waives all Borrower Rights, including all statutory or regulatory rights of a borrower to disclosure of effective interest rates, differential interest rates, review of credit decisions, distressed loan restructuring, and rights of first refusal. Each Loan Party acknowledges and agrees that the waiver of Borrower Rights provided by this Section 11.23 is knowingly and voluntarily made after such Loan Party has consulted with legal counsel of its choice and has been represented by counsel of its choice in connection with the negotiation of this Agreement and waiver of such Loan Party set forth in this Section 11.23. Each Loan Party acknowledges that its waiver of Borrower Rights set forth in this Section 11.23 is based on its recognition that such waiver is material to induce commercial banks and other non-Farm Credit Systems institutions to participate in the extensions of credit contemplated by this Agreement and to provide extensions of credit to such Loan Party. Nothing contained in this Section 11.23, nor the delivery to any Loan Party of any summary of any rights under, or any notice pursuant to, the Farm Credit Law shall be deemed to be, or be constructed to indicate the determination or agreement by any Loan Party, any Agent, or any Lender that the Farm Credit Law, or any rights thereunder, are or will be applicable to any Loan Party or to the transactions contemplated by this Agreement. It is the intent of the Loan Parties that the waiver of Borrower Rights contained in this Section 11.23 complies with and meets all of the requirements of 12 C.F.R § 617.7010(c).
[SIGNATURE PAGES FOLLOW]
145
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the date first above written.
LAMB WESTON HOLDINGS, INC. , as Borrower | ||||
By: |
/s/ Thomas P. Werner |
|||
Name: | Thomas P. Werner | |||
Title: | President and Chief Executive Officer | |||
CONAGRA FOODS LAMB WESTON, INC. , as a Guarantor | ||||
By: |
/s/ Bernadette Madarieta |
|||
Name: | Bernadette Madarieta | |||
Title: | President and Treasurer | |||
LAMB WESTON SALES, INC. , as a Guarantor | ||||
By: |
/s/ Bernadette Madarieta |
|||
Name: | Bernadette Madarieta | |||
Title: | President and Treasurer | |||
LAMB-WESTON/MIDWEST, INC. , as a Guarantor | ||||
By: |
/s/ Bernadette Madarieta |
|||
Name: | Bernadette Madarieta | |||
Title: | President and Treasurer |
Bank of America, N.A., as Administrative Agent | ||||
By: |
/s/ Darleen R. DiGrazia |
|||
Name: | Darleen R. DiGrazia | |||
Title: | Vice President |
Bank of America, N.A., as a Lender | ||||
By: |
/s/ J. Casey Cosgrove |
|||
Name: | J. Casey Cosgrove | |||
Title: | Director |
Bank of America, N.A., as a L/C Issuer | ||||
By: |
/s/ J. Casey Cosgrove |
|||
Name: | J. Casey Cosgrove | |||
Title: | Director |
GOLDMAN SACHS BANK USA, as a Lender | ||||
By: |
/s/ Charles D. Johnston |
|||
Name: | Charles D. Johnston | |||
Title: | Authorized Signatory |
GOLDMAN SACHS BANK USA, as a L/C Issuer | ||||
By: |
/s/ Charles D. Johnston |
|||
Name: | Charles D. Johnston | |||
Title: | Authorized Signatory |
JPMORGAN CHASE BANK, N.A., as a Lender | ||||
By: |
/s/ Tony Yung |
|||
Name: | Tony Yung | |||
Title: | Executive Director |
JPMORGAN CHASE BANK, N.A., as a L/C Issuer | ||||
By: |
/s/ Tony Yung |
|||
Name: | Tony Yung | |||
Title: | Executive Director |
Wells Fargo, National Association, as a Lender | ||||
By: |
/s/ Peter Kiedrowski |
|||
Name: | Peter Kiedrowski | |||
Title: | Director |
Wells Fargo, National Association, as a L/C Issuer | ||||
By: |
/s/ Peter Kiedrowski |
|||
Name: | Peter Kiedrowski | |||
Title: | Director |
THE BANK OF NOVA SCOTIA, as a Lender | ||||
By: |
/s/ Sangeeta Shah |
|||
Name: | Sangeeta Shah | |||
Title: | Director |
Northwest Farm Credit Services, PCA, as a Lender | ||||
By: |
/s/ Paul Hadley |
|||
Name: | Paul Hadley | |||
Title: | Vice President |
U.S. Bank National Association, as a Lender | ||||
By: |
/s/ Brigitte M Sinclair |
|||
Name: | Brigitte M Sinclair | |||
Title: | Vice President |
Mizuho Bank, Ltd., as a Lender | ||||
By: |
/s/ James R. Fayen |
|||
Name: | James R. Fayen | |||
Title: | Managing Director |
Cooperatieve Rabobank U.A., New York Branch, as a Lender | ||||
By: |
/s/ D. Shane Bownds |
|||
Name: | D. Shane Bownds | |||
Title: | Executive Director | |||
By: |
/s/ Pamela Beal |
|||
Name: | Pamela Beal | |||
Title: | Executive Director |
Schedule 2.01
Commitments and Applicable Percentages
Institution |
Revolving A
Commitment |
Revolving
A % |
Revolving B
Commitment |
Revolving
B % |
Term Loan A |
Term Loan
A % |
Total | |||||||||||||||||||||
Bank of America, N.A. |
$ | 55,319,149.00 | 17.333333363 | % | $ | 0 | 0.00 | % | $ | 74,680,851.00 | 11.063829778 | % | $ | 130,000,000.00 | ||||||||||||||
JPMorgan Chase Bank, N.A. |
$ | 55,319,149.00 | 17.333333363 | % | $ | 0 | 0.00 | % | $ | 74,680,851.00 | 11.063829778 | % | $ | 130,000,000.00 | ||||||||||||||
Wells Fargo, National Association |
$ | 55,319,149.00 | 17.333333363 | % | $ | 0 | 0.00 | % | $ | 74,680,851.00 | 11.063829778 | % | $ | 130,000,000.00 | ||||||||||||||
Goldman Sachs Bank USA |
$ | 48,936,170.00 | 15.333333275 | % | $ | 0 | 0.00 | % | $ | 66,063,830.00 | 9.787234074 | % | $ | 115,000,000.00 | ||||||||||||||
Northwest Farm Credit Services, PCA |
$ | 0 | 0.00 | % | $ | 180,851,064.00 | 100.00 | % | $ | 244,148,936.00 | 36.170212741 | % | $ | 425,000,000.00 | ||||||||||||||
Mizuho Bank, Ltd. |
$ | 29,787,234.00 | 9.333333325 | % | $ | 0 | 0.00 | % | $ | 40,212,766.00 | 5.957446815 | % | $ | 70,000,000.00 | ||||||||||||||
Cooperative Rabobank U.A. |
$ | 29,787,234.00 | 9.333333325 | % | $ | 0 | 0.00 | % | $ | 40,212,766.00 | 5.957446815 | % | $ | 70,000,000.00 | ||||||||||||||
The Bank of Nova Scotia |
$ | 29,787,234.00 | 9.333333325 | % | $ | 0 | 0.00 | % | $ | 40,212,766.00 | 5.957446815 | % | $ | 70,000,000.00 | ||||||||||||||
U.S. Bank National Association |
$ | 14,893,617.00 | 4.666666662 | % | $ | 0 | 0.00 | % | $ | 20,106,383.00 | 2.978723407 | % | $ | 35,000,000.00 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 319,148,936.00 | 100.00 | % | $ | 180,851,064.00 | 100.00 | % | $ | 675,000,000.00 | 100.00 | % | $ | 1,175,000,000.00 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 6.01
Subsidiaries
Legal Name |
Type of Entity |
Record Owner |
Authorized Equity Interests |
|||||
1. | Lamb Weston Holdings, Inc. | Corporation | N/A | N/A | ||||
2. | ConAgra Foods Lamb Weston, Inc. | Corporation | Lamb Weston Holdings, Inc. | 1,000 shares of Common Stock | ||||
3. | Lamb Weston Sales, Inc. | Corporation | Lamb Weston Holdings, Inc. | 1,000 shares of Common Stock | ||||
4. | Ontario Asset Holdings, LLC | Limited Liability Company | ConAgra Foods Lamb Weston, Inc. | N/A | ||||
5. | Lamb-Weston/Midwest, Inc. | Corporation | ConAgra Foods Lamb Weston, Inc. | 10,000 shares of Common Stock | ||||
6. | South Slope Irrigation Association | Non-Profit Corporation |
ConAgra Foods Lamb Weston, Inc. (87%)
State of Washington Department of Natural Resources (13%) |
6,000 shares of Class A Common Voting Stock
5,000 shares of Class B Non-Voting Stock |
||||
7. | Lamb Weston International B.V. | Private Limited Liability Company organized under the laws of The Netherlands | Lamb Weston Holdings, Inc. | 10,000 ordinary shares | ||||
8. | ConAgra Foods Lamb Weston Mexico S.A. de C.V. | Private Company organized under the laws of Mexico | Lamb Weston International B.V. |
500 fixed shares Unlimited variable shares |
Legal Name |
Type of Entity |
Record Owner |
Authorized Equity Interests |
|||||
9. | Lamb Weston Netherlands B.V. | Private Limited Liability Company organized under the laws of The Netherlands | Lamb Weston International B.V. | 10,000 ordinary shares | ||||
10. | ConAgra Foods Japan KK | Organized under the laws of Japan | Lamb Weston International B.V. | 800 shares | ||||
11. | ConAgra International Private Limited | Organized under the laws of Singapore | Lamb Weston International B.V. | 50,000 shares | ||||
12. | Lamb Weston Canada ULC | Canadian Unlimited Liability Company | Lamb Weston International B.V. | One common share | ||||
13. | ConAgra (Mauritius) limited | Private Company organized under the laws of Mauritius | Lamb Weston International B.V. | 900,000 ordinary shares | ||||
14. | CFLW (Hong Kong) limited | Private Company organized under the laws of Hong Kong | Lamb Weston Netherlands B.V. | 10,000 shares | ||||
15. | Tai Mei Agriculture limited | Private Company organized under the laws of Hong Kong | CFLW (Hong Kong) Limited | 385,200,000 ordinary shares | ||||
16. | Tai Mei Potato Industry limited | Private Company organized under the laws of China | Tai Mei Agriculture Limited | 1,000 common shares | ||||
17. | Lamb Weston Holland B.V. | Private Limited Liability Company organized under the laws of The Netherlands | Lamb Weston Netherlands B.V. | 44,990,000 common shares |
Legal Name |
Type of Entity |
Record Owner |
Authorized Equity Interests |
|||||
18. | Lamb Weston (Shanghai) Commercial Company Limited | Private LLC organized under the laws of China | ConAgra (Mauritius) Limited | 700,000 common shares |
Schedule 6.18
Insurance
To be provided post-closing.
Schedule 7.12
Post-Closing
1. | Within forty-five (45) days of the Closing Date, the Borrower shall deliver to the Administrative Agent the original Promissory Note, by and among COA Delhi Investment Fund LLC and ConAgra Lamb Weston Foods, Inc. (as successor to ConAgra Foods, Inc.) for the principal amount of $60,137,500. |
2. | Within ten (10) days of the Closing Date, the Borrower shall provide to the Administrative Agent the insurance certificates and insurance endorsements required by Section 5.01(a)(ii)(E) of the Agreement, in each case in form and substance reasonably acceptable to the Administrative Agent. |
Schedule 8.01
Indebtedness Existing on the Closing Date
1. | The following Tri-Party Agreements (each as amended), pursuant to which ConAgra Foods Lamb Weston, Inc. ( CFLW ) agrees to repay loan if crop is insufficient to cover repayment: |
a. | Tri-Party Agreement, dated March 1, 2016, among CFLW, Northwest Farm Credit Services, PCA and Lockwood Farms; |
b. | Tri-Party Agreement, dated March 23, 2016, among CFLW, KeyBank NA and Balcom & Moe, Inc.; |
c. | Tri-Party Agreement, dated January 15, 2016, among CFLW, KeyBank NA and Black Rock Ag, Inc.; |
d. | Tri-Party Agreement, dated January 4, 2016, among CFLW, KeyBank NA and Ceres Ag, Inc.; |
e. | Tri-Party Agreement, dated February 25, 2016, among CFLW, Washington Trust Bank and Diamondback Farms, LLC; |
f. | Tri-Party Agreement, dated March 25, 2016, among CFLW, Columbia State Bank and G-2 Farming; |
g. | Tri-Party Agreement, dated March 25, 2016, among CFLW, Northwest Farm Credit Services, PCA and Hirai Farms, LLC; |
h. | Tri-Party Agreement, dated February 10, 2016, among CFLW, Northwest Farm Credit Services, PCA and Horning Bros, LLC; |
i. | Tri-Party Agreement, dated April 8, 2016, among CFLW, Washington Trust Bank and H4 Farms, Inc.; |
j. | Tri-Party Agreement, dated March 21, 2016, among CFLW, Northwest Farm Credit Services, PCA and Johnson Agriprises; |
k. | Tri-Party Agreement, dated March 1, 2016, among CFLW, Washington Trust Bank and L.J. Olsen, Inc.; |
l. | Tri-Party Agreement, dated February 18, 2016, among CFLW, Bank of Commerce and Mecham Brothers, LLC; |
m. | Tri-Party Agreement, dated January 5, 2016, among CFLW, Northwest Farm Credit Services, PCA and Lakeview Ag & Livestock, LLC; |
n. | Tri-Party Agreement, dated March 22, 2016, among CFLW, Washington Trust Bank and RHD, Inc.; |
o. | Tri-Party Agreement, dated February 26, 2016, among CFLW, Northwest Farm Credit Services, PCA and Ronald Lockwood Farms; |
p. | Tri-Party Agreement, dated March 8, 2016, among CFLW, Northwest Farm Credit Services, PCA and Richard Toevs Farms; |
q. | Tri-Party Agreement, dated February 10, 2016, among CFLW, Washington Trust Bank and Sun Valley Ranch, Inc.; |
r. | Tri-Party Agreement, dated January 8, 2016, among CFLW, Washington Trust Bank and T&R Farms, Inc.; and |
s. | Tri-Party Agreement, dated March 8, 2016, among CFLW, Northwest Farm Credit Services, PCA and Ted Tschirky Farms. |
2. | Capital Support Agreement, dated February 25, 2016, among ConAgra Foods Lamb Weston, Inc., Ochoa Ag Unlimited Foods, Inc. and Lamb Weston BSW, LLC in favor of Northwest Farm Credit Services, FLCA. |
3. | Loan by BCC NMTC CDE VIII LLC to ConAgra Foods Lamb Weston, Inc. in an aggregate principal amount of $80,750,000. |
4. | Loan by Northwest Farm Credit Services, FLCA to ConAgra Foods Lamb Weston, Inc. (as successor to ConAgra Foods, Inc.) in an original principal amount of $14,500,000. |
Schedule 8.02
Liens Existing on the Closing Date
1. | Lien granted to Northwest Farm Credit Services, FLCA by ConAgra Foods Lamb Weston, Inc. (as successor to ConAgra Foods, Inc.) in uncertificated shares of stock evidencing proprietary interests in Northwest Farm Credit Services, ACA, an affiliate of Northwest Farm Credit Services, FLCA. |
Schedule 8.04
Investments Existing on the Closing Date
1. Each Investment listed in subsection (1) and subsection (2) on Schedule 8.01 is incorporated herein by reference.
2. Acquisition of all of the equity of COA Delhi Investment Fund LLC in April 2017 pursuant to those certain Option Agreements, dated as of April 15, 2014, among ConAgra Foods Lamb Weston, Inc., COA Delhi Investment Fund LLC and the current equity owners of COA Delhi Investment Fund LLC.
3. Loan by ConAgra Foods Lamb Weston, Inc. to COA Delhi Investment Fund LLC in an aggregate principal amount of $60,137,500.
4. Proprietary interests in Northwest Farm Credit Services, ACA, an affiliate of Northwest Farm Credit Services, FLCA, held by ConAgra Foods Lamb Weston, Inc. (as successor to ConAgra Foods, Inc.) in connection with the loan by Northwest Farm Credit Services, FLCA to ConAgra Foods Lamb Weston, Inc. listed in subsection (4) on Schedule 8.01.
5. Investments in Existing Joint Ventures.
Schedule 8.09
Restrictive Agreements Existing on the Closing Date
None.
Schedule 11.02
Certain Addresses for Notices
(i) | For each Loan Party : |
Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk J. Spytek
Email: eryk.spytek@conagra.com
Borrowers website: www.lambweston.com
with a copy to
Jones Day
250 Vesey Street
New York, NY 10281
Attention: Charles N. Bensinger III
Facsimile: 1-212-755-7306
Email: cnbensinger@jonesday.com
(ii) | For the Administrative Agent & Swingline Lender: |
Arlene Minor
Bank of America
Mail Code: TX1-492-14-11
Bank of America Plaza
901 Main Street
Dallas, TX 75202-3714
Telephone: 972-338-3807
Fax: 214-290-9412
Email: Arlene.l.minor@baml.com
For the Administrative Agent & Swingline Lender:
Trade Operations
Mail Code: PA6-580-02-30
1 Fleet Way
Scranton, PA 18507
Fax: 800-755-8743
Email: Scranton_standby_LC@bankofamerica.com
For the all other notices to Administrative Agent:
Bank of America Gateway Village
Mail Code: NC1-026-06-03
900 West Trade Street
Charlotte, NC 28255-0001
Attention: Darleen R. DiGrazia
Telephone: 980-388-5001
Fax: 704-409-0645
Email: Darleen.r.digrazia@baml.com
Schedule 11.06(e)
Voting Participants
Lender |
Total Allocation | Revolver | Revolver % | Term Loan A | Term Loan A % | |||||||||||||||
Northwest Farm Credit Services, PCA |
$ | 25,000,000.00 | $ | 10,638,298.00 | 5.88235300622837 | % | $ | 14,361,702.00 | 5.88235300622837 | % | ||||||||||
CoBank, FCB |
$ | 65,000,000.00 | $ | 27,659,574.00 | 15.2941173738408 | % | $ | 37,340,426.00 | 15.2941173738408 | % | ||||||||||
Farm Credit Services of America, FLCA |
$ | 40,000,000.00 | $ | 17,021,277.00 | 9.41176492055363 | % | $ | 22,978,723.00 | 9.41176492055363 | % | ||||||||||
AgStar Financial Services, FLCA |
$ | 40,000,000.00 | $ | 17,021,277.00 | 9.41176492055363 | % | $ | 22,978,723.00 | 9.41176492055363 | % | ||||||||||
1st Farm Credit Services, FLCA |
$ | 37,500,000.00 | $ | 15,957,447.00 | 8.82352950934256 | % | $ | 21,542,553.00 | 8.82352950934256 | % | ||||||||||
Farm Credit Bank of Texas |
$ | 35,000,000.00 | $ | 14,893,617.00 | 8.23529409813149 | % | $ | 20,106,383.00 | 8.23529409813149 | % | ||||||||||
United FCS, FLCA, d/b/a FCS Commerical Finance Group |
$ | 30,000,000.00 | $ | 12,765,957.00 | 7.05882327570934 | % | $ | 17,234,043.00 | 7.05882327570934 | % | ||||||||||
AgFirst Farm Credit Bank |
$ | 27,000,000.00 | $ | 11,489,362.00 | 6.35294133519723 | % | $ | 15,510,638.00 | 6.35294133519723 | % | ||||||||||
American AgCredit, FLCA |
$ | 20,000,000.00 | $ | 8,510,638.00 | 4.70588218380623 | % | $ | 11,489,362.00 | 4.70588218380623 | % | ||||||||||
GreenStone Farm Credit Services, FLCA |
$ | 20,000,000.00 | $ | 8,510,638.00 | 4.70588218380623 | % | $ | 11,489,362.00 | 4.70588218380623 | % | ||||||||||
AgCountry Farm Credit Services, FLCA |
$ | 20,000,000.00 | $ | 8,510,638.00 | 4.70588218380623 | % | $ | 11,489,362.00 | 4.70588218380623 | % | ||||||||||
Farm Credit Mid-America, FLCA f/k/a Farm Credit Services of Mid-America, FLCA |
$ | 15,000,000.00 | $ | 6,382,979.00 | 3.52941191432526 | % | $ | 8,617,021.00 | 3.52941191432526 | % | ||||||||||
Farm Credit West, FLCA |
$ | 15,000,000.00 | $ | 6,382,979.00 | 3.52941191432526 | % | $ | 8,617,021.00 | 3.52941191432526 | % |
Lender |
Total Allocation | Revolver | Revolver % | Term Loan A | Term Loan A % | |||||||||||||||
Farm Credit East, ACA |
$ | 15,000,000.00 | $ | 6,382,979.00 | 3.52941191432526 | % | $ | 8,617,021.00 | 3.52941191432526 | % | ||||||||||
Capital Farm Credit, FLCA |
$ | 12,000,000.00 | $ | 5,106,383.00 | 2.82352942087197 | % | $ | 6,893,617.00 | 2.82352942087197 | % | ||||||||||
AgChoice Farm Credit, ACA for itself and/or agent/nominee for AgChoice Farm Credit, FLCA |
$ | 8,500,000.00 | $ | 3,617,021.00 | 1.99999984517647 | % | $ | 4,882,979.00 | 1.99999984517647 | % |
EXHIBIT A-1
FORM OF LOAN NOTICE
Date: ,
To: | Bank of America, N.A., as Administrative Agent |
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of November 9, 2016 (as amended, restated, extended, supplemented or otherwise modified from time to time, the Agreement ; the terms defined therein being used herein as therein defined), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
The undersigned hereby requests (select one):
☐ A Borrowing of [Revolving A][Revolving B][Term A] Loans
☐ A conversion or continuation of [Revolving A][Revolving B][Term A] Loans
1. | On (a Business Day). |
2. | In the amount of |
3. | Denominated in 1 |
4. | Comprised of [Base Rate][Eurocurrency Rate] Loans |
5. | For Eurocurrency Rate Loans: with an Interest Period of months. |
[The Revolving A Borrowing requested herein complies with the proviso to the first sentence of Section 2.01(a) of the Agreement.] 2
[The Revolving B Borrowing requested herein complies with the proviso to the first sentence of Section 2.01(b) of the Agreement.] 3
1 | Indicate Dollars or applicable Alternative Currency. |
2 | Include this sentence in the case of Revolving A Borrowing. |
3 | Include this sentence in the case of Revolving B Borrowing. |
A-1-1
[The Borrower hereby represents and warrants that the conditions specified in Sections 5.02(a) and (b) of the Agreement shall be satisfied on and as of the date of the Borrowing.] 4
LAMB WESTON HOLDINGS, INC. | ||
By: | ||
Name: | ||
Title: |
4 | To be included only for new Borrowings. |
A-1-2
EXHIBIT A-2
FORM OF SWING LINE LOAN NOTICE
Date: ,
To: | Bank of America, N.A., as Swing Line Lender |
Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of November 9, 2016 (as amended, restated, extended, supplemented or otherwise modified from time to time, the Agreement ; the terms defined therein being used herein as therein defined), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
The undersigned hereby requests a Swing Line Loan:
1. | On (a Business Day). |
2. | In the amount of $ . |
The Swing Line Borrowing requested herein complies with the requirements of the proviso to the first sentence of Section 2.04(a) of the Agreement.
The Borrower hereby represents and warrants that the conditions specified in Sections 5.02(a) and (b) of the Agreement shall be satisfied on and as of the date of the Borrowing.
LAMB WESTON HOLDINGS, INC. | ||
By: | ||
Name: | ||
Title: |
A-2-1
EXHIBIT A-3
[Form of]
Letter of Credit Report
TO: | Bank of America, N.A., as Administrative Agent |
RE: | Credit Agreement, dated as of November 9, 2016 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the Credit Agreement ), by and among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender. Unless otherwise defined herein, capitalized terms used in this report shall have the meanings set forth in the Credit Agreement. |
DATE: | [Date] |
The undersigned, [insert name of L/C Issuer] (the L/C Issuer ) hereby delivers this report to the Administrative Agent, pursuant to the terms of Section 2.03(m) of the Credit Agreement.
[The L/C Issuer plans to issue, amend, renew, increase or extend the following Letter(s) of Credit on [insert date].
L/C No. |
Maximum
Face Amount |
Current
Face Amount |
Currency |
Financials
or Performance SBLC |
Beneficiary
Name |
Issuance
Date |
Expiry
Date |
Auto
Renewal |
Date of
Amendment |
Amount of
Amendment |
]
[The L/C Issuer made a payment, with respect to L/C No. , on [insert date, which shall be a Business Day] in the amount of [$] ].
[The Borrower failed to reimburse the L/C Issuer for a payment made in the amount of [$][insert amount of such payment] pursuant to L/C No. on [insert date of such failure, which shall be a Business Day], with respect to L/C No. .]
A-3-1
Set forth in the table below is a description of each Letter of Credit issued by the undersigned and outstanding on the date hereof.
L/C No. |
Maximum
Face Amount |
Current
Face Amount |
Currency |
Financials
or Performance SBLC |
Beneficiary
Name |
Issuance
Date |
Expiry
Date |
Auto
Renewal |
Date of
Amendment |
Amount of
Amendment |
Delivery of an executed counterpart of a signature page of this notice by fax transmission or other electronic mail transmission (e.g. pdf or tif) shall be effective as delivery of a manually executed counterpart of this notice.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-3-2
[L/C ISSUER], | ||
as an L/C Issuer | ||
By: | ||
Name: | ||
Title: |
A-3-3
EXHIBIT A-4
[Form of]
Additional L/C Issuer Notice
TO: | Bank of America, N.A., as Administrative Agent |
RE: | Credit Agreement, dated as of November 9, 2016 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the Credit Agreement ), by and among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender. Unless otherwise defined herein, capitalized terms used in this Notice shall have the meanings set forth in the Credit Agreement. |
DATE: | [Date] |
[Insert Name of additional L/C Issuer] ( Lender ), a [Revolving A Lender][Revolving B Lender] under the Credit Agreement and the Borrower hereby provide notice to the Administrative Agent and the L/C Issuer(s) that the Lender wishes to become an L/C Issuer for an amount of $[ ] under the Credit Agreement.
It is hereby agreed that upon receipt by the Administrative Agent of a fully executed copy of this Notice, the Lender shall be deemed an L/C Issuer under the Credit Agreement.
Delivery of an executed counterpart of a signature page of this notice by fax transmission or other electronic mail transmission (e.g. pdf or tif) shall be effective as delivery of a manually executed counterpart of this notice.
A duly authorized officer of the undersigned has executed this notice as of the day and year set forth above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-4-1
LAMB WESTON HOLDINGS, INC., | ||
a Delaware corporation | ||
By: |
|
|
Name: | ||
Title: | ||
[LENDERS NAME] | ||
By: |
|
|
Name: | ||
Title: |
Acknowledged and Agreed: | ||
BANK OF AMERICA, N.A. | ||
as Administrative Agent | ||
By: |
|
|
Name: | ||
Title: |
A-4-2
EXHIBIT B
FORM OF NOTE
___________, ____
FOR VALUE RECEIVED, the undersigned (the Borrower ), hereby promises to pay to or its registered assigns (the Lender ), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of the [Revolving A][Revolving B][Term A] Loans from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of November 9, 2016 (as amended, restated, extended, supplemented or otherwise modified from time to time, the Agreement ; the terms defined therein being used herein as therein defined), among the Borrower, the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
The Borrower promises to pay interest on the unpaid principal amount of the [Revolving A][Revolving B][Term A] Loans made by the Lender from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in the currency in which such Loan is denominated in immediately available funds at the Administrative Agents Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranty and is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. The [Revolving A][Revolving B][Term A] Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
B-1
LAMB WESTON HOLDINGS, INC. |
||
By: |
|
|
Name: |
|
|
Title: |
|
B-2
LOANS AND PAYMENTS WITH RESPECT THERETO
Date |
Type of
|
Amount of Loan
|
End of Interest
|
Amount of
|
Outstanding
|
Notation Made
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
B-3
EXHIBIT C-1
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders that Are Not Partnerships for U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of November 9, 2016 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement ), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
Pursuant to the provisions of Section 3.01 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.
The undersigned has furnished the Borrower and the Administrative Agent with a certificate of its non-U.S. Person status on an IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER] |
||
By: |
|
|
Name: |
||
Title: |
Date: ________ __, 20[ ]
C-1-1
EXHIBIT C-2
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants that Are Not Partnerships for U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of November 9, 2016 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement ), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
Pursuant to the provisions of Section 3.01 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT] |
||
By: |
|
|
Name: |
||
Title: |
Date: ________ __, 20[ ]
C-2-1
EXHIBIT C-3
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants that Are Partnerships for U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of November 9, 2016 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement ), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
Pursuant to the provisions of Section 3.01 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.
The undersigned has furnished its participating Lender with an IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partners/members beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT] |
||
By: |
|
|
Name: |
||
Title: |
Date: ________ __, 20[ ]
C-3-1
EXHIBIT C-4
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders that Are Partnerships for U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of November 9, 2016 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement ), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
Pursuant to the provisions of Section 3.01 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.
The undersigned has furnished the Borrower and the Administrative Agent with an IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partners/members beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER] |
||
By: |
|
|
Name: |
||
Title: |
Date: ________ __, 20[ ]
C-4-1
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ________, ____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of November 9, 2016 (as amended, restated, extended, supplemented or otherwise modified from time to time, the Agreement ; the terms defined therein being used herein as therein defined), among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.
The undersigned Financial Officer hereby certifies as of the date hereof that he/she is the of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. The Borrower has delivered [(i)] the year-end audited consolidated balance sheet and related statements of income, stockholders equity and cash flows required by Section 7.01(a) of the Agreement for the fiscal year of the Borrower and its consolidated Subsidiaries ended as of the above date, together with the report of an independent certified public accountant of recognized national standing (without a going concern or like qualification or exception (except for qualifications or exceptions resulting from pending maturity of Indebtedness under the Agreement)) required by such section [and (ii) the consolidated balance sheet and related statements of income and cash flows of the Borrower and its Restricted Subsidiaries as at the end of such fiscal year.] 1 Such financial statements fairly present in all material respects the consolidated financial condition and results of operations of the Borrower and its Subsidiaries [or its Restricted Subsidiaries, as applicable,] in accordance with GAAP [(except, in the case of the financial statements of the Borrower and its Restricted Subsidiaries, for the exclusion of Unrestricted Subsidiaries)] as at the end of and for such fiscal year.
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. The Borrower has delivered the unaudited consolidated balance sheet and related statements of income and cash flows required by Section 7.01(b) of the Agreement for the fiscal quarter of the Borrower and its Subsidiaries ended as of the above date. Such financial statements fairly present the consolidated financial condition and results of operations of the Borrower and its consolidated Subsidiaries in accordance with GAAP as at such date and for such period, subject to normal year-end and audit adjustments and the absence of certain footnotes.
1 |
To be included if the Borrower has any Unrestricted Subsidiaries. |
D-1
2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition of the Borrower during the accounting period covered by such financial statements.
3. Based on the review described in paragraph 2 hereof,
[select one:]
[to the knowledge of the undersigned, during such fiscal period no Default has occurred and is continuing.]
or
[to the knowledge of the undersigned, the following is a list of each Default that has occurred during such fiscal period and (i) its nature and status and (ii) any action taken or proposed to be taken with respect to such Default.]
4. to the knowledge of the undersigned, since [the date of the audited financial statements referred to in Section 6.04 of the Agreement] 2 [the date of the most recently delivered audited annual financial statements] 3 , the Borrower has not had any change in GAAP or the application thereof [except as follows , and such change has had the following effect on the attached financial statements ].
5. The financial covenant analyses and information demonstrating compliance with Section 8.11 of the Agreement set forth on Schedule 2 attached hereto are true and accurate in all material respects on and as of the date of this Certificate.
6. Attached hereto as Schedule 3 is a schedule containing [(i)] a report setting forth the information required by Section 4(f) of the Security Agreement or confirmation that there has been no change in such information since the Closing Date or the date of the last Compliance Certificate delivered prior hereto [(ii) a list of any Instrument, Tangible Chattel Paper or Document that is required to be delivered concurrently with this Certificate pursuant to Section 4(a)(i) of the Security Agreement,] [and] [[(ii)][(iii)] an updated Schedule 2(c) to the Security Agreement containing information required by Section 4(d) thereof with respect to Commercial Tort Claims not previously disclosed to the Administrative Agent, [and] [(iii)][(iv)] a listing of any Patents, Trademarks or Copyrights required to be disclosed by Section 5 of the Security Agreement [and] [(iv)][(v)] a list of any Pledged Equity required to be disclosed pursuant to Section 4(g) of the Security Agreement]. 4
2 | To be used for the initial Compliance Certificate. |
3 | To be used for all Compliance Certificates after the initial Compliance Certificate. |
4 | To be included with Compliance Certificate, if applicable. |
D-2
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of , .
LAMB WESTON HOLDINGS, INC. |
||
By: |
|
|
Name: |
|
|
Title: |
|
D-3
SCHEDULE 1
to Compliance Certificate
[Audited annual][Unaudited quarterly] financial statements
For the [Year][Quarter] ended ___________________
D-4
For the Quarter/Year ended ___________________
SCHEDULE 2
to Compliance Certificate
($ in 000s)
I. Consolidated Net Leverage Ratio. |
|
|||||
A. Consolidated EBITDA | ||||||
1. |
Consolidated Net Income: (Line A.1(i)- A.1(ii)- A.1(iii)- A.1(vi)- A.1(v)) |
$_____ | ||||
(i) The consolidated net income (or loss) attributable to the Borrower for such period determined on a consolidated basis in accordance with GAAP | $_____ | |||||
(ii) to the extent included in the Borrowers net income, the net income (or loss) of any Person that is not a Restricted Subsidiary, except (x) to the extent such income has actually been distributed in cash to the Borrower or any Restricted Subsidiary during such period and (y) in the case of the Existing Joint Ventures, for other equity of the Borrower and its Restricted Subsidiaries in the earnings of the Existing Joint Ventures in excess of the amount included pursuant to clause (1)(i)(x) so long as the amount included in this clause (1)(i)(y) for any period does not exceed 6.0% of Consolidated EBITDA for such period | $_____ | |||||
(iii) to the extent included in the Borrowers net income, gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP | $_____ | |||||
(iv) to the extent included in the Borrowers net income, the cumulative effect of any change in accounting principles | $_____ | |||||
(v) to the extent included in the Borrowers net income, gains and losses from dispositions of assets outside the ordinary course of business or upon early retirement of Indebtedness | $_____ | |||||
2. | Other than with respect to clause (iv) below, an amount which, in the determination of Consolidated Net Income for such period, has been deducted for, without duplication: |
D-5
(i) |
Consolidated Interest Expense (Line A.2(i)(1)- A.2(i)(2)+ A.2(i)(3)) |
$_____ | ||||
(1) All interest in respect of Consolidated Funded Indebtedness (including the interest component of synthetic leases, account receivables securitization programs, off-balance sheet loans or similar off-balance sheet financing products) accrued during such period (whether or not actually paid during such period) determined after giving effect to any net payments made or received under interest rate Swap Contracts | $_____ | |||||
(2) The sum of (i) all interest income during such period and (ii) to the extent included in clause (i) above, the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including write-offs or amortization of fees and expenses related to Permitted Receivables Financings), and amounts paid (or plus any amounts received) on early terminations of Swap Contracts | $_____ | |||||
(3) The loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing | $_____ | |||||
(ii) |
provision for taxes based on income, profits or capital of the Borrower and its Restricted Subsidiaries, including, without limitation, federal, state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations | $_____ | ||||
(iii) |
depreciation and amortization expense and all other non-cash charges (including impairment charges), expenses or losses (except for any such expense that (x) requires accrual of a reserve for anticipated future cash payments for any period or (y) represents a write-down of current assets) | $_____ | ||||
(iv) |
(1) pro forma costs savings permitted to be reflected in pro forma financial statements prepared in accordance with Regulation S-X of the Securities Exchange Act of 1934 and (2) the amount of pro forma cost savings, operating expense reductions and synergies (collectively, Cost Savings ) that are reasonably expected by the |
D-6
Borrower to result over the next succeeding four Fiscal Quarter period (calculated as though such Cost Savings had been realized on the first day of such period) as a result of, or in connection with, actions (including Permitted Acquisitions or Dispositions outside the ordinary course of business) consummated during such period or expected to be taken within twelve months, provided that (A) such Cost Savings are reasonably identifiable, quantifiable and factually supportable, (B) the aggregate amount of such Cost Savings added pursuant to this clause (iv)(2) during such period shall not exceed an amount equal to 10% of Consolidated EBITDA for such period (calculated without giving effect to any amounts added back pursuant to this clause (iv)(2)) and (C) such pro forma Cost Savings shall only be added back for quarters ending on or prior to the last day of the fourth full Fiscal Quarter following the applicable action, and in each case described in this clause (iv), no Cost Savings shall be added pursuant to this clause (iv) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period | $_____ | |||
(v) | (1) non-recurring, extraordinary or unusual cash charges, expenses or losses not exceeding $25,000,000 in any four Fiscal Quarter period and (2) all charges, expenses or losses in connection with the Transactions that are incurred or accrued prior to the second anniversary of the Closing Date | $_____ | ||
(vi) | any contingent or deferred payments (including earn-out payments, non-compete payments and consulting payments but excluding ongoing royalty payments) made in connection with any Permitted Acquisition | $_____ | ||
(vii) | the amount of write-offs or amortization of deferred financing fees, commissions, fees and expenses (including any write-offs or amortization of fees and expenses related to Permitted Receivables Financings) | $_____ | ||
(viii) | losses from foreign exchange translation adjustments or Swap Contracts during such period | $_____ | ||
(ix) | losses associated with discontinued operations (but only after such operations are no longer owned or operated by the Borrower or a Restricted Subsidiary) | $_____ |
D-7
D-8
B.Consolidated Funded Indebtedness: |
||||
The sum of: |
||||
(i) the outstanding principal amount of all obligations for borrowed money, whether current or long-term (including the Loans) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest payments are customarily made |
$ | _____ | ||
(ii) all obligations arising under letters of credit (including standby and commercial), but only to the extent consisting of unpaid reimbursement obligations in respect of drawn amounts under letters of credit |
$ | _____ | ||
(iii) all Capitalized Lease Obligations |
$ | _____ |
1 | Provided that Consolidated EBITDA for certain periods specified in the definition thereof in the Credit Agreement shall be the amount specified, or determined as set forth, therein. |
D-9
(iv) all obligations issued or assumed as the deferred purchase price of assets or services purchased (other than contingent earn-out payments and other contingent deferred payments, and trade debt incurred in the ordinary course of business) which would appear as liabilities on a balance sheet in accordance with GAAP | $_____ | |||
(v) all Disqualified Equity Interests of the Borrower and its Restricted Subsidiaries | $_____ | |||
(vi) all Guarantees with respect to outstanding Indebtedness of the type specified in clauses (i) through (v) above of a Person that is not Borrower or any of its Restricted Subsidiaries | $_____ | |||
(vii) all Indebtedness of the types referred to in clauses (i) through (vi) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or similar limited liability entity) in which the Borrower or any of its Restricted Subsidiaries is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person | $_____ | |||
1. | Consolidated Funded Indebtedness (Line B(i)+ B(ii)+ B(iii)+ B(iv)+ B(v)+ B(vi)+ B(vii)) | $_____ |
D-10
C. Consolidated Net Leverage Ratio (Line I.C.1 : Line I.C.2): | ____: ___ | |||
1. | Consolidated Funded Indebtedness (Line I.B.1), minus (i) unrestricted cash and Cash Equivalents of Loan Parties (cash or Cash Equivalents (x) placed on deposit with a trustee to discharge or defease Indebtedness or (y) to the extent proceeds of Indebtedness incurred to finance an acquisition and held in escrow pending the consummation of such acquisition to consummate such acquisition or prepay such Indebtedness shall be considered unrestricted to the extent the related Indebtedness is included in Consolidated Funded Indebtedness) and (ii) to the extent not prohibited from being distributed to a Loan Party pursuant to any Law, Contractual Obligation or Organization Document, 75% of the amount of unrestricted cash and Cash Equivalents of Restricted Subsidiaries that are not Loan Parties (cash or Cash Equivalents segregated or held in escrow to prepay Indebtedness or to consummate an acquisition shall be considered unrestricted) | $_____ | ||
to | ||||
2. | Consolidated EBITDA for the period of four consecutive Fiscal Quarters ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter most recently ended prior to such date for which financial statements have been delivered pursuant to Section 7.01(a) or (b) of the Credit Agreement). | $_____ |
D-11
II. | Consolidated Interest Coverage Ratio. (Line II(i) : Line II(ii)) _____ : _____ |
The ratio, determined as of the end of each Fiscal Quarter of the Borrower for the most- recently ended four Fiscal Quarters, of :
(i) Consolidated EBITDA (Line I.A.4) | $_____ | |||
to | ||||
(ii) Consolidated Interest Expense paid or payable in cash (and, to the extent not otherwise included in Consolidated Interest Expense, the loss or discount on the sale of Transferred Assets to any Receivables Financier in connection with a Permitted Receivables Financing). | $_____ |
D-12
SCHEDULE 3
to Compliance Certificate
For the [Year][Quarter] ended ___________________
☐ | By checking this box, the Borrower confirms that except as previously disclosed, no Obligor has had any change to its legal name, jurisdiction of formation or form of organization at or before the date of this Compliance Certificate. |
☐ | By checking this box, the Borrower confirms that there is no change in the Collateral required to be delivered to the Administrative Agent pursuant to Section 4(a)(i) of the Security Agreement since the [Closing Date][date of the last such list]. If you check this box, please write None on the list below. |
Below is a list of all Instrument, Tangible Chattel Paper or Document required to be delivered to the Administrative Agent pursuant to Section 4(a)(i) of the Security Agreement:
(please add more lines as necessary)
☐ By checking this box, the Borrower confirms that there are no updates to Schedule 2(c) to Security Agreement with respect to Commercial Tort Claims not previously disclosed to the Administrative Agent. If you check this box, please write None on the list below.
Below is a list of updates to Schedule 2(c) to Security Agreement with respect to Commercial Tort Claims not previously disclosed to the Administrative Agent:
(please add more lines as necessary)
☐ | By checking this box, the Borrower confirms that except as previously disclosed, there are no updates to the listing of any Patents, Trademarks or Copyrights required to be disclosed by Section 5 of the Security Agreement. If you check this box, please write None on the list below. |
D-13
Below is a listing of any Patents, Trademarks or Copyrights required to be disclosed by Section 5 of the Security Agreement and not previously disclosed to the Administrative Agent:
(please add more lines as necessary)
☐ | By checking this box, the Borrower confirms that except as previously disclosed, since the [Closing Date][date of the last such list] no Obligor has acquired any Pledged Equity consisting of an interest in a partnership or a limited liability company that (and the terms of any such existing Pledged Equity have not changed so that it) (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a Securities Account or (v) constitutes a Security or a Financial Asset. If you check this box, please write None on the list below. |
Below is a listing of any Pledged Equity required to be disclosed by Section 4(g) of the Security Agreement and not previously disclosed to the Administrative Agent:
(please add more lines as necessary)
D-14
EXHIBIT E
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this Agreement ), dated as of , 20 , is by and between , a , (the New Subsidiary ), and Bank of America, N.A., in its capacity as Administrative Agent under that certain Credit Agreement, dated as of November 9, 2016 (as amended, restated, amended and restated, modified and supplemented from time to time, the Credit Agreement ) by and among LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ), the Guarantors from time to time party thereto, each lender from time to time party thereto (collectively, the Lenders and individually, a Lender ), the L/C Issuers from time to time party thereto, and BANK OF AMERICA, N.A., as Administrative Agent, Collateral Agent and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement.
Pursuant to the terms and conditions of Section 7.10 of the Credit Agreement, the New Subsidiary is required to become a Guarantor.
Accordingly, the New Subsidiary hereby agrees with the Administrative Agent, for the benefit of the Lenders, as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Credit Agreement and a Guarantor for all purposes of the Credit Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1 , the New Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each holder of the Obligations, as provided in Article IV, and subject to the limitations set forth therein, of the Credit Agreement, the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof.
2. [The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Security Agreement, and shall have all the obligations of an Obligor (as such term is defined in the Security Agreement) thereunder as if it had executed the Security Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, except during a Collateral Suspension Period, all of the terms, provisions and conditions contained in the Security Agreement. Without limiting the generality of the foregoing terms of this paragraph 2 , the New Subsidiary hereby grants to the Collateral Agent, for the ratable benefit of the holders of the Secured Obligations (as such term is defined in the Security Agreement), a continuing security interest in, any and all right, title and interest of the New Subsidiary in and to the Collateral (as such term is defined in the Security
E-1
Agreement) of the New Subsidiary. The New Subsidiary hereby represents and warrants to the Collateral Agent, for the benefit of the holders of the Secured Obligations, that the supplements to the schedules to the Perfection Certificate attached hereto as Annex I are true and correct in all material respects (except the information therein with respect to the exact legal name of the New Subsidiary shall be correct and complete in all respects).
3. In furtherance of the foregoing, the New Subsidiary hereby grants and pledges to the Collateral Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in and any and all right, title and interest of the New Subsidiary in and to all Pledged Equity listed on the attached schedules to the Perfection Certificate and all other Collateral to secure the prompt payment and performance in full when due, whether at stated maturity, by acceleration, as a mandatory prepayment or otherwise, of the Secured Obligations.] 1
4. The New Subsidiary hereby waives acceptance by the Administrative Agent, the Lenders and each other holder of the Obligations of the guaranty by the New Subsidiary under Article IV of the Credit Agreement upon the execution of this Agreement by the New Subsidiary.
5. This Agreement may be executed in counterparts (and by the different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of this Agreement by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.
6. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
1 | To be included only if a Collateral Suspension Period is not in effect. |
E-2
IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the holders of the Obligations, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
NEW SUBSIDIARY: |
[NEW SUBSIDIARY] |
|||
By: |
|
|||
Name: |
||||
Title: |
E-3
Acknowledged and accepted:
BANK OF AMERICA, N.A., |
||
as Administrative Agent and Collateral Agent |
||
By: |
|
|
Name: | ||
Title: |
E-4
Annex I
Supplements to Perfection Certificate Schedules
E-5
EXHIBIT F
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this Assignment and Assumption ) is dated as of the Effective Date set forth below and is entered into by and between [the][each] 1 Assignor identified in item 1 below ([the][each, an] Assignor ) and [the][each] 2 Assignee identified in item 2 below ([the][each, an] Assignee ). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] 3 hereunder are several and not joint.] 4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, amended and restated, modified and supplemented from time to time, the Credit Agreement ), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignors][the respective Assignors] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, any Letters of Credit and any Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any]
1 | For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language. |
2 | For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language. |
3 | Select as appropriate. |
4 |
Include bracketed language if there are either multiple Assignors or multiple Assignees. |
F-1
Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] Assigned Interest ). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
1. | Assignor[s]: | |||||
|
||||||
|
||||||
2. | Assignee[s]: | |||||
|
||||||
|
[for each Assignee, indicate if such Assignee is a Lender or an [Affiliate][Approved Fund] of [ identify Lender ]]
3. | Borrower(s) : Lamb Weston Holdings, Inc. |
4. | Administrative Agent : Bank of America, N.A., as the administrative agent under the Credit Agreement |
5. | Credit Agreement :Credit Agreement, dated as of November 9, 2016, among Lamb Weston Holdings, Inc., a Delaware corporation, the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender |
F-2
6. | Assigned Interest : |
Assignor[s] 5 |
Assignee[s] 6 |
Facility Assigned 7 |
Aggregate Amount of Commitment/Loans for all Lenders 8 |
Amount of Commitment/Loans Assigned |
Percentage Assigned of Commitment/ Loans 9 |
CUSIP Number |
||||||
$________________ | $_________ | ____________% | ||||||||||
$________________ | $_________ | ____________% | ||||||||||
$________________ | $_________ | ____________% |
[7. | Trade Date : __________________] 10 |
Effective Date: , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR |
||
[NAME OF ASSIGNOR] |
||
By: |
|
|
Name: |
||
Title: |
5 | List each Assignor, as appropriate. |
6 | List each Assignee, as appropriate. |
7 | Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. Revolving A Commitment, Revolving B Commitment, Term A Loan Commitment, etc.). |
8 | Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. |
9 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. |
10 | To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. |
F-3
ASSIGNEE |
||
[NAME OF ASSIGNEE] |
||
By: |
|
|
Name: |
||
Title: |
[Consented to and] 11 Accepted:
BANK OF AMERICA, N.A., as |
||
Administrative Agent | ||
By: |
|
|
Name: |
||
Title: |
[Consented to:] 12 | ||
By: |
|
|
Name: |
||
Title: |
11 | To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
12 | To be added only if the consent of the Borrower and/or other parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of the Credit Agreement. |
F-4
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties .
1.1. Assignor . [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it [is][is not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee . [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 11.06(b)(iii) , (v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 11.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation (including any tax forms or documentation) required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor 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 the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
F-5
2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or other electronic mail transmission (e.g. pdf or tif) shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
F-6
EXHIBIT G-1
[FORM OF]
PERMITTED PARI PASSU INTERCREDITOR AGREEMENT
Dated as of [ ], 20[ ]
among
BANK OF AMERICA, N.A.,
as Administrative Agent for the Credit Agreement Secured Parties,
[ ]
as the Additional First Lien Agent,
[ ]
as the Initial Additional Authorized Representative,
and
each additional Authorized Representative from time to time party hereto
G-1-1
PERMITTED PARI PASSU INTERCREDITOR AGREEMENT, dated as of [ ], 20[ ] (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time, this Agreement ), among BANK OF AMERICA, N.A., as collateral agent and administrative agent for the Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the Administrative Agent ), [ ], as collateral agent for the Additional First Lien Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the Additional First Lien Agent ), [ ], as Authorized Representative (as defined below) for the Initial Additional First Lien Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the Initial Additional Authorized Representative ), and each additional Authorized Representative from time to time party hereto for the other Additional First Lien Secured Parties of the Series (as defined below) with respect to which it is acting in such capacity, and acknowledged and agreed by LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ) and the other Grantors (as defined below) party hereto.
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Administrative Agent (for itself and on behalf of the Credit Agreement Secured Parties), the Additional First Lien Agent (for itself and on behalf of the Additional First Lien Secured Parties), the Initial Additional Authorized Representative (for itself and on behalf of the Initial Additional First Lien Secured Parties) and each additional Authorized Representative (for itself and on behalf of the Additional First Lien Secured Parties of the applicable Series) agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms . Capitalized terms used but not otherwise defined herein have the meanings set forth in the Credit Agreement or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:
Additional First Lien Agent has the meaning assigned to such term in the introductory paragraph of this Agreement; provided, that following the Discharge of the Initial Additional First Lien Obligations, the Additional First Lien Agent shall be the Authorized Representative of a Series of Additional First Lien Obligations then outstanding as designated by (i) if prior to the Discharge of Credit Agreement Obligations, the Major Non-Controlling Authorized Representative, or (ii) if after the Discharge of Credit Agreement Obligations, the Applicable Authorized Representative.
Additional First Lien Debt Documents means, with respect to the Initial Additional First Lien Obligations or any Series of Additional First Lien Obligations and any Refinancing of such debt, the notes, indentures, credit agreements, security documents and other operative agreements evidencing or governing such indebtedness and liens securing such indebtedness, including the Initial Additional First Lien Debt Documents and the Additional
G-1-2
First Lien Security Documents and each other agreement entered into for the purpose of securing the Initial Additional First Lien Obligations or any Series of Additional First Lien Obligations; provided that, in each case, the Indebtedness thereunder (other than the Initial Additional First Lien Obligations) has been designated as Additional First Lien Obligations pursuant to Section 5.13 hereto.
Additional First Lien Obligations means all amounts owing to any Additional First Lien Secured Party (including the Initial Additional First Lien Secured Parties) pursuant to the terms of any Additional First Lien Debt Document (including the Initial Additional First Lien Debt Documents), including, without limitation, all amounts in respect of any principal, premium, interest (including any interest accruing subsequent to the commencement of a Bankruptcy Case at the rate provided for in the respective Additional First Lien Debt Document, whether or not such interest is an allowed claim under any such proceeding or under applicable state, federal or foreign law), penalties, fees, expenses, indemnification, reimbursements, damages and other liabilities, and guarantees of the foregoing amounts.
Additional First Lien Secured Party means the holders of any Additional First Lien Obligations and any Authorized Representative with respect thereto, and shall include the Initial Additional First Lien Secured Parties.
Additional First Lien Security Documents means any collateral agreement, security agreement or any other document now existing or entered into after the date hereof that create Liens on any assets or properties of any Grantor to secure the Additional First Lien Obligations.
Additional Senior Class Debt has the meaning assigned to such term in Section 5.13.
Additional Senior Class Debt Parties has the meaning assigned to such term in Section 5.13.
Additional Senior Class Debt Representative has the meaning assigned to such term in Section 5.13.
Administrative Agent has the meaning assigned to such term in the introductory paragraph of this Agreement.
Agreement has the meaning assigned to such term in the introductory paragraph of this Agreement.
Applicable Authorized Representative means, with respect to any Shared Collateral, (i) until the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date, the Administrative Agent and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date, the Major Non-Controlling Authorized Representative.
G-1-3
Applicable Collateral Agent means (i) until the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date, the Administrative Agent and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date, the Additional First Lien Agent.
Authorized Representative means, at any time, (i) in the case of any Credit Agreement Obligations or the Credit Agreement Secured Parties, the Administrative Agent, (ii) in the case of the Initial Additional First Lien Obligations or the Initial Additional First Lien Secured Parties, the Initial Additional Authorized Representative, and (iii) in the case of any Additional Senior Class Debt or Additional Senior Class Debt Parties that become subject to this Agreement after the date hereof, the Additional Senior Class Debt Representative named as the New Representative for such Series in the applicable Joinder Agreement.
Bankruptcy Case has the meaning assigned to such term in Section 2.05(b).
Bankruptcy Code means Title 11 of the United States Code, as amended.
Bankruptcy Laws means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, administration, rearrangement, judicial management, receivership, insolvency, reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise), or similar federal, state, or foreign debtor relief laws (including under any applicable corporate statute) of the United States or other applicable jurisdictions from time to time in effect.
Borrower has the meaning assigned to such term in the introductory paragraph of this Agreement.
Collateral means all assets and properties subject to any Lien created pursuant to any First Lien Security Document to secure one or more Series of First Lien Obligations.
Collateral Agent means (i) in the case of any Credit Agreement Obligations, the Administrative Agent, and (ii) in the case of the Additional First Lien Obligations, the Additional First Lien Agent.
Controlling Secured Parties means, with respect to any Shared Collateral, (i) at any time when the Administrative Agent is the Applicable Collateral Agent, the Credit Agreement Secured Parties and (ii) at any other time, the Series of First Lien Secured Parties whose Authorized Representative is the Applicable Authorized Representative for such Shared Collateral.
Credit Agreement means that certain Credit Agreement, dated as of [ ], 2016, among the Borrower, the other Grantors from time to time party thereto, the Administrative Agent, the lenders from time to time party thereto and the other parties from time to time party thereto, as amended, restated, amended and restated, extended, supplemented, Refinanced or otherwise modified from time to time.
G-1-4
Credit Agreement Loan Documents means the Credit Agreement and the other Loan Documents (as such term is defined in the Credit Agreement).
Credit Agreement Obligations means the Obligations (as such term is defined in the Credit Agreement).
Credit Agreement Secured Parties means the Secured Parties (as such term is defined in the Security Agreement).
Credit Agreement Security Agreement means that certain Security and Pledge Agreement, dated as of [ ], 2016, among the Borrower, the other Grantors from time to time party thereto and the Administrative Agent, as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time.
Credit Agreement Security Documents means the Credit Agreement Security Agreement, the other Collateral Documents (as defined in the Credit Agreement) and each other agreement entered into in favor of the Administrative Agent for the purpose of securing any Credit Agreement Obligations.
DIP Financing has the meaning assigned to such term in Section 2.05(b).
DIP Financing Liens has the meaning assigned to such term in Section 2.05(b).
DIP Lenders has the meaning assigned to such term in Section 2.05(b).
Discharge means, with respect to any Series of First Lien Obligations, except (x) in connection with a Refinancing pursuant to Section 2.08 and (y) as set forth in the definition of Discharge of Credit Agreement Obligations:
(a) payment in full in cash of all First Lien Obligations of such Series (other than any indemnification obligations for which no claim or demand for payment, whether oral or written, has been made at such time);
(b) termination or expiration of all commitments, if any, to extend credit that would constitute First Lien Obligations of such Series; and
(c) termination of all letters of credit issued under the Credit Agreement Loan Documents or Additional First Lien Debt Documents, as applicable, or providing cash collateral or backstop letters of credit acceptable to the Administrative Agent or applicable Additional First Lien Agent, respectively, or the applicable issuing bank, in an amount and in a manner reasonably satisfactory thereto.
Discharge of Credit Agreement Obligations means the Discharge of the Credit Agreement Obligations; provided, that the Discharge of Credit Agreement Obligations shall not be deemed to have occurred in connection with a Refinancing of such Credit Agreement Obligations with additional First Lien Obligations secured by such Shared Collateral under an Additional First Lien Debt Document which has been designated in writing by the Administrative Agent (under the Credit Agreement as so Refinanced) to the Additional First Lien Agent and each other Authorized Representative as the Credit Agreement for purposes of this Agreement.
G-1-5
Event of Default means an Event of Default (or similarly defined term) as defined in any First Lien Debt Document.
First Lien Debt Documents means, collectively, (i) the Credit Agreement Loan Documents, and (ii) the Additional First Lien Debt Documents.
First Lien Obligations means, collectively, (i) the Credit Agreement Obligations and (ii) each Series of Additional First Lien Obligations.
First Lien Secured Parties means (i) the Credit Agreement Secured Parties and (ii) the Additional First Lien Secured Parties with respect to each Series of Additional First Lien Obligations.
First Lien Security Documents means (i) the Credit Agreement Security Documents, and (ii) the Additional First Lien Security Documents.
Grantors means the Borrower and each other Restricted Subsidiary of the Borrower that has granted a security interest to any First Lien Secured Party pursuant to any First Lien Debt Document. The Grantors (other than the Borrower) existing on the date hereof are set forth in Annex I hereto.
Impairment has the meaning assigned to such term in Section 1.03.
Initial Additional Authorized Representative has the meaning assigned to such term in the introductory paragraph of this Agreement.
Initial Additional First Lien Agreement mean that certain [Indenture] [Other Agreement], dated as of [ ], among [the Borrower], [the Grantors identified therein] and [ ], as [trustee][administrative agent], as amended, restated, amended and restated, extended, supplemented, Refinanced or otherwise modified from time to time.
Initial Additional First Lien Debt Documents means the Initial Additional First Lien Agreement, the Initial Additional First Lien Security Agreement and any security documents and other operative agreements evidencing or governing the Indebtedness thereunder, and the Liens securing such Indebtedness, including any agreement entered into for the purpose of securing the Initial Additional First Lien Obligations.
Initial Additional First Lien Obligations means the [Obligations] as such term is defined in the Initial Additional First Lien Security Agreement.
Initial Additional First Lien Secured Parties means the Additional First Lien Agent, the Initial Additional Authorized Representative and [the holders] [the lenders] of the Initial Additional First Lien Obligations [issued pursuant to] [outstanding under] the Initial Additional First Lien Agreement.
G-1-6
Initial Additional First Lien Security Agreement means the [security agreement], dated as of the date hereof, among the Borrower, the Additional First Lien Agent and the other parties thereto, as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time.
Insolvency or Liquidation Proceeding means:
(1) any case commenced by or against the Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, arrangement (including under any applicable corporate statute), recapitalization or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Borrower or any other Grantor or any similar case or proceeding relative to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution or other winding up of or relating to the Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.
Intervening Creditor has the meaning assigned to such term in Section 2.01(a).
Joinder Agreement means a joinder to this Agreement in the form of Annex II hereto required to be delivered by an Authorized Representative to each Collateral Agent pursuant to Section 5.13 hereof in order to establish an additional Series of Additional First Lien Obligations and add Additional First Lien Secured Parties hereunder.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Major Non-Controlling Authorized Representative means, with respect to any Shared Collateral, the Authorized Representative of the Series of Additional First Lien Obligations that constitutes the largest outstanding principal amount of any then outstanding Series of First Lien Obligations with respect to such Shared Collateral; provided , however , that if there are two outstanding Series of Additional First Lien Obligations which have an equal outstanding principal amount, the Series of Additional First Lien Obligations with the earlier maturity date shall be considered to have the larger outstanding principal amount for purposes of this definition.
New York UCC means the Uniform Commercial Code as from time to time in effect in the State of New York.
G-1-7
Non-Controlling Authorized Representative means, at any time with respect to any Shared Collateral, any Authorized Representative that is not the Applicable Authorized Representative at such time with respect to such Shared Collateral.
Non-Controlling Authorized Representative Enforcement Date means, with respect to any Non-Controlling Authorized Representative, the date which is 120 days (throughout which 120 day period such Non-Controlling Authorized Representative was the Major Non-Controlling Authorized Representative) after the occurrence of both (i) an Event of Default (under and as defined in the Additional First Lien Debt Document under which such Non-Controlling Authorized Representative is the Authorized Representative) and (ii) each Collateral Agents and each other Authorized Representatives receipt of written notice from such Non-Controlling Authorized Representative certifying that (x) such Non-Controlling Authorized Representative is the Major Non-Controlling Authorized Representative and that an Event of Default (under and as defined in the Additional First Lien Debt Document under which such Non-Controlling Authorized Representative is the Authorized Representative) has occurred and is continuing and (y) the Additional First Lien Obligations of the Series with respect to which such Non-Controlling Authorized Representative is the Authorized Representative are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable Additional First Lien Debt Document; provided that the Non-Controlling Authorized Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Shared Collateral (1) at any time the Administrative Agent has commenced and is diligently pursuing any enforcement action with respect to such Shared Collateral or (2) at any time the Grantor that has granted a security interest in such Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
Non-Controlling Secured Parties means, with respect to any Shared Collateral, the First Lien Secured Parties which are not Controlling Secured Parties with respect to such Shared Collateral.
Pledged or Controlled Collateral means any Shared Collateral in the possession or control of a Collateral Agent (or its agents or bailees), to the extent that possession or control thereof or of any account in which such Shared Collateral is held perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction. Pledged or Controlled Collateral includes, without limitation, any Certificated Securities, Promissory Notes, Instruments and Chattel Paper or any Deposit Account, commodities account or securities account, in each case, delivered to or in the possession or control of the Collateral Agent under the terms of the First Lien Debt Documents.
Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrue after the commencement of any Insolvency or Liquidation Proceeding whether or not allowed or allowable as a claim in any such Insolvency or Liquidation Proceeding.
Proceeds has the meaning assigned to such term in Section 2.01(a).
G-1-8
Refinance means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. Refinanced and Refinancing have correlative meanings.
Series means (a) with respect to the First Lien Secured Parties, each of (i) the Credit Agreement Secured Parties (in their capacities as such), (ii) the Initial Additional First Lien Secured Parties (in their capacities as such), and (iii) the Additional First Lien Secured Parties (in their capacities as such) that become subject to this Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such Additional First Lien Secured Parties) and (b) with respect to any First Lien Obligations, each of (i) the Credit Agreement Obligations, (ii) the Initial Additional First Lien Obligations, and (iii) the Additional First Lien Obligations incurred pursuant to any Additional First Lien Debt Document, which pursuant to any Joinder Agreement are to be represented hereunder by a common Authorized Representative (in its capacity as such for such Additional First Lien Obligations).
Shared Collateral means, at any time, Collateral in which the holders of two or more Series of First Lien Obligations hold a valid and perfected security interest at such time. If more than two Series of First Lien Obligations are outstanding at any time and the holders of less than all Series of First Lien Obligations hold a valid and perfected security interest in any Collateral at such time, then such Collateral shall constitute Shared Collateral for those Series of First Lien Obligations that hold a valid security interest in such Collateral at such time and shall not constitute Shared Collateral for any Series which does not have a valid and perfected security interest in such Collateral at such time.
SECTION 1.02. Terms Generally . The definitions of terms herein shall apply equally to 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. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, amended and restated, supplemented or otherwise modified (as permitted hereby, if applicable) and, with respect to any statute or regulation, all statutory and regulatory provisions consolidating, replacing or interpreting such statute or regulation, (ii) any reference herein to any Person shall be construed to include such Persons successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly
G-1-9
qualified herein, the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (vi) the term or is not exclusive.
SECTION 1.03. Impairments . It is the intention of the First Lien Secured Parties of each Series that the holders of First Lien Obligations of such Series (and not the First Lien Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x) any of the First Lien Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of First Lien Obligations), (y) any of the First Lien Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of First Lien Obligations and/or (z) any intervening security interest exists securing any other obligations (other than another Series of First Lien Obligations) on a basis ranking prior to the security interest of such Series of First Lien Obligations but junior to the security interest of any other Series of First Lien Obligations or (ii) the existence of any Collateral for any other Series of First Lien Obligations that is not Shared Collateral (any such condition referred to in the foregoing clause (i) or (ii) with respect to any Series of First Lien Obligations, an Impairment of such Series). In the event of any Impairment with respect to any Series of First Lien Obligations, the results of such Impairment shall be borne solely by the holders of such Series of First Lien Obligations, and the rights of the holders of such Series of First Lien Obligations (including, without limitation, the right to receive distributions in respect of such Series of First Lien Obligations pursuant to Section 2.01) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such First Lien Obligations subject to such Impairment.
ARTICLE II
Priorities and Agreements with Respect to Shared Collateral
SECTION 2.01. Priority of Claims .
(a) Anything contained herein or in any of the First Lien Debt Documents to the contrary notwithstanding (but subject to Section 1.03), if an Event of Default has occurred and is continuing, and the Applicable Collateral Agent or any First Lien Secured Party is taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in respect of any Shared Collateral in any Bankruptcy Case of the Borrower or any other Grantor (including any adequate protection payments) or any First Lien Secured Party receives any payment pursuant to any intercreditor agreement (other than this Agreement) with respect to any Shared Collateral, the proceeds of any sale, collection or other liquidation of any such Collateral by any First Lien Secured Party or received by the Applicable Collateral Agent or any First Lien Secured Party pursuant to any such intercreditor agreement with respect to such Shared Collateral and proceeds of any such distribution (subject, in the case of any such distribution, to the sentence immediately following) to which the First Lien Obligations are entitled under any intercreditor agreement (other than this Agreement) (all proceeds of any sale, collection or other liquidation of any Collateral and all proceeds of any such distribution being collectively referred to as Proceeds ) shall be applied (i) FIRST, to the payment of all amounts owing to each Collateral Agent (in its capacity as such) pursuant to the terms of any First Lien Debt Document,
G-1-10
(ii) SECOND, subject to Section 1.03, to the payment in full of the First Lien Obligations of each Series on a ratable basis, with such Proceeds to be applied to the First Lien Obligations of a given Series in accordance with the terms of the applicable First Lien Debt Documents; provided that following the commencement of any Insolvency or Liquidation Proceeding with respect to any Grantor, solely as among the holders of First Lien Obligations and solely for purposes of this clause SECOND and not any other documents governing First Lien Obligations, in the event the value of the Shared Collateral is not sufficient for the entire amount of Post-Petition Interest on the First Lien Obligations to be allowed under Section 506(a) and (b) of the Bankruptcy Code or any other applicable provision of the Bankruptcy Code or other Bankruptcy Law in such Insolvency or Liquidation Proceeding, the amount of First Lien Obligations of each Series of First Lien Obligations shall include only the maximum amount of Post-Petition Interest on the First Lien Obligations allowable under Section 506(a) and (b) of the Bankruptcy Code or any other applicable provision of the Bankruptcy Code or other Bankruptcy Law in such Insolvency or Liquidation Proceeding; and (iii) THIRD, after the Discharge of all First Lien Obligations, to the Borrower and the other Grantors or their successors or assigns, as their interests may appear, or to whosoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. If, despite the provisions of this Section 2.01(a), any First Lien Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the First Lien Obligations to which it is then entitled in accordance with this Section 2.01(a), such First Lien Secured Party shall hold such payment or recovery in trust for the benefit of all First Lien Secured Parties for distribution in accordance with this Section 2.01(a). Notwithstanding the foregoing, with respect to any Shared Collateral upon which a third party (other than a First Lien Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of First Lien Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of First Lien Obligations (such third party, an Intervening Creditor ), the value of any Shared Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of First Lien Obligations with respect to which such Impairment exists.
(b) It is acknowledged that the First Lien Obligations of any Series may, subject to the limitations set forth in the then extant First Lien Debt Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or the provisions of this Agreement defining the relative rights of the First Lien Secured Parties of any Series.
(c) Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of First Lien Obligations granted on the Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any jurisdiction, any applicable real estate laws, or any other applicable law or the First Lien Debt Documents or any defect or deficiencies in the Liens securing the First Lien Obligations of any Series or any other circumstance whatsoever (but, in each case, subject to Section 1.03), each First Lien Secured Party hereby agrees that the Liens securing each Series of First Lien Obligations on any Shared Collateral shall be of equal priority.
G-1-11
(d) Notwithstanding anything in this Agreement or any other First Lien Debt Documents to the contrary, Collateral consisting of cash and cash equivalents pledged to secure Credit Agreement Obligations consisting of reimbursement obligations in respect of Letters of Credit or otherwise held by the Administrative Agent pursuant to Section 2.03, 2.04 or 2.15 of the Credit Agreement (or any equivalent successor provision) shall be applied as specified in the Credit Agreement and will not constitute Shared Collateral.
SECTION 2.02. Actions with Respect to Shared Collateral; Prohibition on Contesting Liens .
(a) Only the Applicable Collateral Agent shall act or refrain from acting with respect to any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral). At any time when the Administrative Agent is the Applicable Collateral Agent, no Additional First Lien Secured Party shall, or shall instruct any Collateral Agent to, and no Collateral Agent (other than the Applicable Collateral Agent) shall commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any Additional First Lien Security Document, applicable law or otherwise, it being agreed that only the Administrative Agent (or a person authorized by it), acting in accordance with the Credit Agreement Security Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral at such time.
(b) With respect to any Shared Collateral at any time when the Additional First Lien Agent is the Applicable Collateral Agent, (i) the Applicable Collateral Agent shall act only on the instructions of the Applicable Authorized Representative, (ii) the Applicable Collateral Agent shall not follow any instructions with respect to such Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral) from any Non-Controlling Authorized Representative (or any other First Lien Secured Party other than the Applicable Authorized Representative) and (iii) no Non-Controlling Authorized Representative or other First Lien Secured Party (other than the Applicable Authorized Representative) shall, or shall instruct the Applicable Collateral Agent to, commence any judicial or non judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any First Lien Security Document, applicable law or otherwise, it being agreed that only the Applicable Collateral Agent, acting on the instructions of the Applicable Authorized Representative and in accordance with the Additional First Lien Security Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral.
(c) Notwithstanding the equal priority of the Liens securing each Series of First Lien Obligations, the Applicable Collateral Agent (acting on the instructions of the
G-1-12
Applicable Authorized Representative) may deal with the Shared Collateral as if such Applicable Collateral Agent had a senior Lien on such Collateral. No Non-Controlling Authorized Representative or Non-Controlling Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Applicable Collateral Agent, the Applicable Authorized Representative or the Controlling Secured Party or any other exercise by the Applicable Collateral Agent, the Applicable Authorized Representative or the Controlling Secured Party of any rights and remedies relating to the Shared Collateral. The foregoing shall not be construed to limit the rights and priorities of any First Lien Secured Party, any Collateral Agent or any Authorized Representative with respect to any Collateral not constituting Shared Collateral.
(d) Each of the First Lien Secured Parties agrees that it will not (and hereby waives any right to) question or contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment or enforceability of a Lien held by or on behalf of any of the First Lien Secured Parties on all or any part of the Collateral, or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Collateral Agent or any Authorized Representative to enforce this Agreement.
SECTION 2.03. No Interference; Payment Over .
(a) Each First Lien Secured Party agrees that (i) it will not (and shall be deemed to have waived any right to) challenge, contest, or question, or support any other Person in challenging, contesting, or questioning, in any proceeding (including any Insolvency or Liquidation Proceeding) the validity or enforceability of any First Lien Obligations of any Series or any First Lien Security Document or the validity, attachment, perfection or priority of any Lien under any First Lien Security Document or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement, (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Shared Collateral by the Applicable Collateral Agent, (iii) except as provided in Section 2.02, it shall have no right to (A) exercise, or direct the Applicable Collateral Agent or any other First Lien Secured Party to exercise, any right, remedy or power with respect to any Shared Collateral (including pursuant to any intercreditor agreement) or (B) consent to the exercise by the Applicable Collateral Agent or any other First Lien Secured Party of any right, remedy or power with respect to any Shared Collateral, (iv) it will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Applicable Collateral Agent or any other First Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Applicable Collateral Agent, any Applicable Authorized Representative or any other First Lien Secured Party shall be liable for any action taken or omitted to be taken by the Applicable Collateral Agent, such Applicable Authorized Representative or other First Lien Secured Party with respect to any Shared Collateral in accordance with the provisions of this Agreement, (v) it will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshalled upon any foreclosure or other disposition of such Collateral and (vi) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the Applicable Collateral Agent or any other First Lien Secured Party to enforce this Agreement.
G-1-13
(b) Each First Lien Secured Party hereby agrees that if it shall obtain possession of any Shared Collateral or shall realize any proceeds or payment in respect of any such Shared Collateral, pursuant to any First Lien Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any intercreditor agreement, other than this Agreement), at any time prior to the Discharge of each of the First Lien Obligations, then it shall hold such Shared Collateral, proceeds or payment in trust for the other First Lien Secured Parties having a security interest in such Shared Collateral, and promptly transfer such Shared Collateral, proceeds or payment, as the case may be, to the Applicable Collateral Agent, to be distributed in accordance with the provisions of Section 2.01.
SECTION 2.04. Automatic Release of Liens .
(a) If at any time the Applicable Collateral Agent forecloses upon or otherwise exercises remedies against any Shared Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of the other Collateral Agent for the benefit of each Series of First Lien Secured Parties upon such Shared Collateral will automatically be released and discharged as and when, but only to the extent, such Liens of the Applicable Collateral Agent on such Shared Collateral are released and discharged; provided that any proceeds of any Shared Collateral realized therefrom shall be applied pursuant to Section 2.01.
(b) Each Collateral Agent and Authorized Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all such authorizations and other instruments as shall reasonably be requested by the Applicable Collateral Agent or the Borrower to evidence and confirm any release of Shared Collateral provided for in this Section 2.04.
SECTION 2.05. Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings .
(a) This Agreement shall continue in full force and effect notwithstanding the commencement of any Insolvency or Liquidation Proceeding, including any proceeding under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law by or against any Grantor or any Subsidiary of a Grantor. Without limiting the generality of the foregoing, it is acknowledged and agreed that this Agreement constitutes an agreement within the scope of Section 510(a) of the Bankruptcy Code, including with respect to the provisions of this Article II, and all references to Grantor shall include any Grantor as debtor and debtor in possession (and any receiver, trustee, or other estate representative for such Grantor, as the case may be) in any Insolvency or Liquidation Proceeding.
(b) If the Borrower and/or any other Grantor shall become subject to a case (a Bankruptcy Case ) under the Bankruptcy Code or any other Bankruptcy Law and shall, as debtor(s)-in-possession, move for approval of financing ( DIP Financing ) to be provided by one or more lenders (the DIP Lenders ) under Section 364 of the Bankruptcy Code or any
G-1-14
equivalent provision of any other Bankruptcy Law or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each First Lien Secured Party (other than any Controlling Secured Party or Authorized Representative of any Controlling Secured Party) agrees that it will raise no objection to any such financing or to the Liens on the Shared Collateral securing the same ( DIP Financing Liens ) or to any use of cash collateral that constitutes Shared Collateral, unless any Controlling Secured Party, or an Authorized Representative of any Controlling Secured Party, shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any First Lien Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the First Lien Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral as set forth herein), in each case so long as (A) the First Lien Secured Parties of each Series retain the benefit of their Liens on all such Shared Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding, with the same priority vis-á-vis all the other First Lien Secured Parties (other than any Liens of the First Lien Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (B) the First Lien Secured Parties of each Series are granted Liens on any additional collateral pledged to any First Lien Secured Parties as adequate protection or otherwise in connection with such DIP Financing or use of cash collateral, with the same priority vis-á-vis the First Lien Secured Parties (other than any Liens of the First Lien Secured Parties constituting DIP Financing Liens) as set forth in this Agreement, (C) if any amount of such DIP Financing or cash collateral is applied to repay any of the First Lien Obligations, such amount is applied pursuant to Section 2.01, and (D) if any First Lien Secured Parties are granted adequate protection with respect to First Lien Obligations subject hereto, including in the form of periodic payments, in connection with such DIP Financing or use of cash collateral, the proceeds of such adequate protection are applied pursuant to Section 2.01; provided that the First Lien Secured Parties of each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any Collateral subject to Liens in favor of the First Lien Secured Parties of such Series or their Authorized Representative that does not or shall not constitute Shared Collateral; and provided , further , that the First Lien Secured Parties receiving adequate protection shall not object to any other First Lien Secured Party receiving adequate protection comparable to any adequate protection granted to such First Lien Secured Parties in connection with a DIP Financing or use of cash collateral.
SECTION 2.06. Reinstatement . In the event that any of the First Lien Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement of a preference under the Bankruptcy Code or any other Bankruptcy Law, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such First Lien Obligations shall again have been paid in full in cash.
G-1-15
SECTION 2.07. Insurance . As between the First Lien Secured Parties, the Applicable Collateral Agent (and in the case of the Additional First Lien Agent acting in such capacity, acting at the direction of the Applicable Authorized Representative) shall have the right to adjust or settle any insurance policy or claim covering or constituting Shared Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral.
SECTION 2.08. Refinancings . The First Lien Obligations of any Series may be Refinanced, in whole or in part, or otherwise amended or modified from time to time, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any First Lien Debt Document) of, any First Lien Secured Party of any other Series, all without affecting the priorities provided for herein or the other provisions hereof; provided that the Authorized Representative of the holders of any such Refinancing indebtedness shall have executed a Joinder Agreement on behalf of the holders of such Refinancing indebtedness.
SECTION 2.09. Applicable Collateral Agent as Gratuitous Bailee for Perfection .
(a) The Pledged or Controlled Collateral shall be delivered, or control thereof shall be transferred, to the Applicable Collateral Agent, and the Applicable Collateral Agent agrees to hold (and, pending delivery or transfer of control of the Pledged or Controlled Collateral to the Applicable Collateral Agent, each other Collateral Agent and each Authorized Representative agrees to hold) any Shared Collateral constituting Pledged or Controlled Collateral that is part of the Collateral from time to time in its possession or control (or in the possession or control of any agent or bailee) as gratuitous bailee for the benefit of and on behalf of each other First Lien Secured Party and any assignee, or if the Applicable Collateral Agent shall at any time obtain any landlord waiver or bailees letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, the Applicable Collateral Agent agrees to take such actions with respect to such landlord waiver, bailees letter or similar agreement or arrangement, as sub-agent or gratuitous bailee for the benefit of each other First Lien Secured Party and any assignee, in each case, solely for the purpose of perfecting the security interest granted in such Pledged or Controlled Collateral, if any, pursuant to the applicable First Lien Debt Documents, subject to the terms and conditions of this Section 2.09; provided , that at any time the Administrative Agent ceases to be the Applicable Collateral Agent, the Administrative Agent, at the request of the Additional First Lien Agent, shall promptly deliver all Pledged or Controlled Collateral to the Additional First Lien Agent, in its capacity as the successor Applicable Collateral Agent, together with any necessary endorsements (or otherwise allow the Additional First Lien Agent to obtain control of such Pledged or Controlled Collateral). Upon the written request of the Applicable Collateral Agent, the Borrower shall take such further action as is reasonably required to effectuate the transfer contemplated hereby.
(b) In the event that any First Lien Secured Party other than the Applicable Collateral Agent receives any Pledged or Controlled Collateral, then such First Lien Secured Party shall promptly deliver, or transfer control of, such Pledged or Controlled Collateral (including any Proceeds therefrom), together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, to the Applicable Collateral Agent.
G-1-16
(c) In the event that the Applicable Collateral Agent (or any agent or bailee thereof) has Lien filings against Intellectual Property (as defined in the Credit Agreement Security Agreement) that is part of the Shared Collateral that are necessary for the perfection of Liens in such Shared Collateral, the Applicable Collateral Agent, agrees to hold such Liens as sub-agent and gratuitous bailee for the benefit of each other First Lien Secured Party and any assignee, in each case, solely for the purpose of perfecting the security interest granted in such Pledged or Controlled Collateral, if any, pursuant to the applicable First Lien Debt Documents, subject to the terms and conditions of this Section 2.09.
(d) The duties and responsibilities of each Collateral Agent under this Section 2.09 shall be limited solely to holding any Pledged or Controlled Collateral as gratuitous bailee or sub-agent, as applicable, for the benefit of each other First Lien Secured Party for purposes of perfecting the Lien held by such First Lien Secured Parties thereon.
SECTION 2.10. Amendments to First Lien Security Documents .
(a) Without the prior written consent of the Administrative Agent, the Additional First Lien Agent, on behalf of itself and each other Additional First Lien Secured Party, agrees that no Additional First Lien Security Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Additional First Lien Security Document, would be prohibited by, or would require any Grantor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(b) Without the prior written consent of the Additional First Lien Agent, in its capacity as a Collateral Agent, the Administrative Agent agrees that no Credit Agreement Security Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Credit Agreement Security Document, would be prohibited by, or would require any Grantor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(c) In making determinations required by this Section 2.10, each Collateral Agent may conclusively rely on an officers certificate of the Borrower.
ARTICLE III
Existence and Amounts of Liens and Obligations
SECTION 3.01. Determinations with Respect to Amounts of Liens and Obligations . Whenever a Collateral Agent or any Authorized Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any First Lien Obligations of any Series, or the Shared Collateral subject to any Lien securing the First Lien Obligations of any Series, it may request that such information be furnished to it in writing by each other Authorized Representative or Collateral Agent and shall be entitled to make such determination on the basis of the information
G-1-17
so furnished; provided , however , that if an Authorized Representative or a Collateral Agent shall fail or refuse reasonably promptly to provide the requested information, the requesting Collateral Agent or Authorized Representative shall be entitled to make any such determination by such method as it may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of the Borrower. Each Collateral Agent and each Authorized Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Grantor, any First Lien Secured Party or any other Person as a result of such determination.
ARTICLE IV
The Applicable Collateral Agent
SECTION 4.01. Authority .
(a) Notwithstanding any other provision of this Agreement, nothing herein shall be construed to impose any fiduciary or other duty on any Applicable Collateral Agent to any Non-Controlling Secured Party or give any Non-Controlling Secured Party the right to direct any Applicable Collateral Agent, except that each Applicable Collateral Agent shall be obligated to distribute proceeds of any Shared Collateral in accordance with Section 2.01.
(b) In furtherance of the foregoing, each Non-Controlling Secured Party acknowledges and agrees that the Applicable Collateral Agent shall be entitled, for the benefit of the First Lien Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Collateral as provided herein and in the First Lien Debt Documents, as applicable, pursuant to which the Applicable Collateral Agent is the Collateral Agent for such Shared Collateral, without regard to any rights to which the Non-Controlling Secured Parties would otherwise be entitled as a result of the First Lien Obligations held by such Non-Controlling Secured Parties. Without limiting the foregoing, each Non-Controlling Secured Party agrees that none of the Applicable Collateral Agent, the Applicable Authorized Representative or any other First Lien Secured Party shall have any duty or obligation first to marshal or realize upon any type of Shared Collateral (or any other Collateral securing any of the First Lien Obligations), or to sell, dispose of or otherwise liquidate all or any portion of such Shared Collateral (or any other Collateral securing any First Lien Obligations), in any manner that would maximize the return to the Non-Controlling Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Non-Controlling Secured Parties from such realization, sale, disposition or liquidation. Each of the First Lien Secured Parties waives any claim it may now or hereafter have against any Collateral Agent or the Authorized Representative of any other Series of First Lien Obligations or any other First Lien Secured Party of any other Series arising out of (i) any actions which any Collateral Agent, Authorized Representative or any First Lien Secured Party takes or omits to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the First Lien Obligations from any account debtor, guarantor or any other party) in accordance with the First Lien Debt Documents or any other agreement related thereto
G-1-18
or to the collection of the First Lien Obligations or the valuation, use, protection or release of any security for the First Lien Obligations, in each case, in a manner that would not violate the terms of this Agreement (ii) any election by any Applicable Authorized Representative or any holders of First Lien Obligations, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to Section 2.05, any borrowing, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, by any Grantor or any Subsidiary of a Grantor, as debtor-in-possession. Notwithstanding any other provision of this Agreement, the Applicable Collateral Agent shall not accept any Shared Collateral in full or partial satisfaction of any First Lien Obligations pursuant to Section 9-620 of the Uniform Commercial Code of any jurisdiction, without the consent of each Authorized Representative representing holders of First Lien Obligations for which such Collateral constitutes Shared Collateral.
SECTION 4.02. The Applicable Collateral Agent shall not have any duties or obligations to any First Lien Secured Party except those expressly set forth herein and in any other First Lien Debt Document. Without limiting the generality of the foregoing, the Applicable Collateral Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby; provided that the Applicable Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Applicable Collateral Agent to liability or that is contrary to this Agreement or applicable law;
(c) shall not, except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Grantor or any of its Affiliates that is communicated to or obtained by the Person serving as the Applicable Collateral Agent or any of its Affiliates in any capacity;
(d) shall not, except as expressly set forth herein, be liable for any action taken or not taken by it (1) in the absence of its own gross negligence or willful misconduct or (2) in reliance on a certificate from the Borrower stating that such action is not prohibited by the terms of this Agreement. The Applicable Collateral Agent shall be deemed not to have knowledge of any Event of Default under any Series of First Lien Obligations unless and until notice describing such Event of Default and referencing the applicable First Lien Debt Documents is given to the Applicable Collateral Agent;
(e) shall not be responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement or any other First Lien Security Document, (2) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or
G-1-19
Event of Default, (4) the validity, enforceability, effectiveness or genuineness of this Agreement, any other First Lien Security Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the First Lien Security Documents, (5) the value or the sufficiency of any Collateral for any Series of First Lien Obligations, or (6) the satisfaction of any condition set forth in any First Lien Debt Document, other than to confirm receipt of items expressly required to be delivered to the Applicable Collateral Agent; and
(f) need not segregate money held hereunder from other funds except to the extent required by law or as otherwise agreed in writing and shall be under no liability for interest on any money received by it hereunder except to the extent required by law or as otherwise agreed in writing.
ARTICLE V
Miscellaneous
SECTION 5.01. Notices . All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(a) if to the Administrative Agent, to it at:
Bank of America, N.A.
[ ] 1
(b) if to the Additional First Lien Agent or the Initial Additional Authorized Representative, to it at [ADDRESS], Attention: [ ] , Facsimile No.: [ ]; email: [ ];
(c) if to any Grantor, to the Borrower, at:
c/o Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk J. Spytek
Email: eryk.spytek@conagra.com
with a copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, NY 10281
Attention: Charles N. Bensinger III
Facsimile: 1-212-755-7306
1 | To be provided by Administrative Agent/Cahill. |
G-1-20
Email: cnbensinger@jonesday.com
(d) if to any other Applicable Authorized Representative, to it at the address set forth in the applicable Joinder Agreement.
Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and, may be personally served, sent by facsimile, electronically mailed or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a facsimile or electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth above or from time to time, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. As agreed to in writing among each Authorized Representative from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable Person provided from time to time by such Person.
SECTION 5.02. Waivers; Amendment; Joinder Agreements .
(a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by Section 5.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Authorized Representative and, each Collateral Agent; provided that any such amendment, supplement or waiver which by the terms of this Agreement requires the Borrowers consent or which increases or could reasonably be expected to increase the obligations or reduces or could reasonably be expected to reduce the rights of, imposes additional duties on, or otherwise adversely affects the Borrower or any other Grantor, shall require the consent of the Borrower.
(c) Notwithstanding the foregoing, without the consent of any First Lien Secured Party, any Authorized Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 5.13 and upon such execution and delivery, such Authorized Representative and the Additional First Lien Secured Parties and Additional First Lien Obligations of the Series for which such Authorized Representative is acting shall be subject to the terms hereof.
G-1-21
(d) Notwithstanding the foregoing, without the consent of any other Authorized Representative or First Lien Secured Party, the Collateral Agents may, and at the request of the Borrower shall, effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any Additional First Lien Obligations or any Refinancing of First Lien Obligations in compliance with the Credit Agreement and the other First Lien Debt Documents; provided, that the Collateral Agents may condition their execution and delivery of any such amendment or modification on receipt of an officers certificate from the Borrower certifying that such incurrence or Refinancing is permitted by the then extant First Lien Debt Documents.
SECTION 5.03. Parties in Interest . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, as well as the other First Lien Secured Parties, all of which are intended to be bound by, and to be third party beneficiaries of, this Agreement.
SECTION 5.04. Survival of Agreement . All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
SECTION 5.05. Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.
SECTION 5.06. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 5.07. GOVERNING LAW . THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 5.08. Submission to Jurisdiction Waivers; Consent to Service of Process . Each Collateral Agent and each Authorized Representative, on behalf of itself and the First Lien Secured Parties of the Series for which it is acting, irrevocably and unconditionally:
G-1-22
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the First Lien Debt Documents, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York located in the Borough of Manhattan, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Authorized Representative) at the address set forth in Section 5.01;
(d) agrees that nothing herein shall affect the right of any other party hereto (or any First Lien Secured Party) to effect service of process in any other manner permitted by law; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 5.08 any special, exemplary, punitive or consequential damages.
SECTION 5.09. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 5.10. Headings . Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 5.11. Conflicts . In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the First Lien Debt Documents, the provisions of this Agreement shall control.
G-1-23
SECTION 5.12. Provisions Solely to Define Relative Rights . The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the First Lien Secured Parties in relation to one another. None of the Borrower, any other Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement ( provided that nothing in this Agreement (other than Section 2.04 or 2.09) is intended to or will amend, waive or otherwise modify the provisions of the Credit Agreement or any Additional First Lien Debt Documents), and none of the Borrower or any other Grantor may rely on the terms hereof (other than Sections 2.04, 2.05, 2.08, 2.09, 2.10 and Article V). Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the First Lien Obligations as and when the same shall become due and payable in accordance with their terms.
SECTION 5.13. Additional Senior Debt . To the extent, but only to the extent, permitted by the provisions of the then extant First Lien Debt Documents, the Grantors may incur additional indebtedness and related obligations after the date hereof that is permitted by the then extant First Lien Debt Documents to be incurred and secured by any asset of a Grantor that would constitute Shared Collateral on an equal and ratable basis as the Liens securing the First Lien Obligations (such indebtedness referred to as Additional Senior Class Debt ). Any such Additional Senior Class Debt may be secured by a Lien and may be Guaranteed by the Grantors on a senior basis, in each case under and pursuant to the Additional First Lien Debt Documents relating thereto, if and subject to the condition that the Authorized Representative of any such Additional Senior Class Debt (each an Additional Senior Class Debt Representative ), acting on behalf of the holders of such Additional Senior Class Debt (such Authorized Representative and holders in respect of any Additional Senior Class Debt being referred to as the Additional Senior Class Debt Parties ), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (iv) of the immediately succeeding paragraph.
In order for an Additional Senior Class Debt Representative to become a party to this Agreement,
(i) such Additional Senior Class Debt Representative, each Collateral Agent, the Applicable Authorized Representative and each Grantor shall have executed and delivered an instrument substantially in the form of Annex II (with such changes as may be reasonably approved by such Collateral Agent, the Additional Senior Class Debt Representative and the Borrower) pursuant to which such Additional Senior Class Debt Representative becomes an Authorized Representative hereunder, and the Additional Senior Class Debt in respect of which such Additional Senior Class Debt Representative is the Authorized Representative and the related Additional Senior Class Debt Parties become subject hereto and bound hereby;
(ii) the Borrower shall have (x) delivered to each Collateral Agent true and complete copies of each of the Additional First Lien Debt Documents relating to such Additional Senior Class Debt, certified as being true and correct by a Responsible Officer of the Borrower, and (y) identified in a certificate of an authorized officer the obligations to be designated as Additional First Lien Obligations and the initial aggregate principal amount or face amount thereof;
G-1-24
(iii) all filings, recordations and/or amendments or supplements to the First Lien Debt Documents necessary or desirable in the reasonable judgment of the Additional First Lien Agent as a Collateral Agent to confirm and perfect the Liens securing the relevant obligations relating to such Additional Senior Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings or recordations, acceptable provisions to perform such filings or recordations shall have been taken in the reasonable judgment of the Additional First Lien Agent), and all fees and taxes in connection therewith shall have been paid (or acceptable provisions to make such payments shall have been taken in the reasonable judgment of the Additional First Lien Agent); and
(iv) the Additional First Lien Debt Documents, as applicable, relating to such Additional Senior Class Debt shall provide, in a manner reasonably satisfactory to each Collateral Agent, that each Additional Senior Class Debt Party with respect to such Additional Senior Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Additional Senior Class Debt.
Each Authorized Representative acknowledges and agrees that upon execution and delivery of a Joinder Agreement substantially in the form of Annex II by an Additional Senior Class Debt Representative and each Grantor in accordance with this Section 5.13, the Additional First Lien Agent will continue to act in its capacity as Additional First Lien Agent in respect of the then existing Authorized Representatives (other than the Administrative Agent) and such additional Authorized Representative.
SECTION 5.14. Agent Capacities . Except as expressly provided herein or in the Credit Agreement Security Documents, Bank of America, N.A. is acting in the capacity of Administrative Agent. Except as expressly provided herein or in the Additional First Lien Security Documents, [ ] is acting in the capacity of Additional First Lien Agent solely for the Additional First Lien Secured Parties. Except as expressly set forth herein, neither the Administrative Agent nor the Additional First Lien Agent shall have any duties or obligations hereunder in respect of any of the Collateral, all of such duties and obligations, if any, being subject to and governed by the applicable First Lien Debt Documents.
SECTION 5.15. Integration . This Agreement together with the other First Lien Debt Documents represents the agreement of each of the Grantors and the First Lien Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Grantor, any Collateral Agent or any other First Lien Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other First Lien Debt Documents.
[SIGNATURE PAGES FOLLOW]
G-1-25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BANK OF AMERICA, N.A., |
||
as Administrative Agent for the Credit Agreement Secured Parties | ||
By: |
|
|
Name: |
|
|
Title: |
|
|
[ ] , as Additional First Lien Agent |
||
By: |
|
|
Name: |
|
|
Title: |
|
|
[ ] , as Initial Additional Authorized Representative |
||
By: |
|
|
Name: |
|
|
Title: |
|
Acknowledged and Agreed by: |
||
LAMB WESTON HOLDINGS, INC. |
||
By: |
|
|
Name: |
|
|
Title: |
|
THE OTHER GRANTORS | ||
LISTED ON ANNEX I HERETO | ||
By: |
|
|
Name: |
|
|
Title: |
|
ANNEX I
Grantors
Name |
Jurisdiction of
Organization |
Annex I-1
ANNEX II
[FORM OF] JOINDER NO. [ ] dated as of [ ], 20[ ] (this Joinder Agreement ), to PERMITTED PARI PASSU INTERCREDITOR AGREEMENT, dated as of [ ], 20[ ] (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time, the Permitted Pari Passu Intercreditor Agreement ), among BANK OF AMERICA, N.A., as administrative agent and as collateral agent for the Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the Administrative Agent ), [ ], as collateral agent for the Additional First Lien Secured Parties (in such capacity and together with its successors in such capacity, the Additional First Lien Agent ), [ ], as Authorized Representative for the Initial Additional First Lien Secured Parties (in such capacity and together with its successors in such capacity, the Initial Additional Authorized Representative ), and each additional Authorized Representative from time to time party thereto for the other Additional First Lien Secured Parties of the Series with respect to which it is acting in such capacity, and acknowledged and agreed by LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ) and the other Grantors party thereto.
A. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Permitted Pari Passu Intercreditor Agreement.
B. It is a condition to the ability of the Grantors to incur Additional First Lien Obligations and to secure Additional Senior Class Debt with the liens and security interests created by Additional First Lien Security Documents that the Additional Senior Class Debt Representative in respect of such Additional Senior Class Debt become an Authorized Representative and such Additional Senior Class Debt and the Additional Senior Class Debt Parties in respect thereof become subject to and bound by the Permitted Pari Passu Intercreditor Agreement pursuant to Section 5.13 of the Permitted Pari Passu Intercreditor Agreement by the execution and delivery of this Joinder Agreement by the Additional Senior Class Debt Representative. Therefore, the undersigned Additional Senior Class Debt Representative (the New Representative ) is executing this Joinder Agreement in accordance with the provision of the Permitted Pari Passu Intercreditor Agreement in order to become an Authorized Representative thereunder.
Accordingly, each Collateral Agent, the Applicable Authorized Representative and the New Representative agree as follows:
SECTION 1. In accordance with Section 5.13 of the Permitted Pari Passu Intercreditor Agreement, the New Representative by its signature below (i) becomes an Authorized Representative under the Permitted Pari Passu Intercreditor Agreement with all the rights and obligations of an Authorized Representative thereunder and the related Additional Senior Class Debt and Additional Senior Class Debt Parties become subject to and bound by the Permitted Pari Passu Intercreditor Agreement, in each case with the same force and effect as if the New Representative had originally been named therein as an Authorized Representative and (ii) the New Representative, on its behalf and on behalf of such Additional Senior Class Debt Parties, hereby agrees to all the terms and provisions of the Permitted Pari Passu Intercreditor Agreement applicable to it as Authorized Representative and to the Additional Senior Class Debt
Annex II-1
Parties that it represents as Additional First Lien Secured Parties. Each reference to an Authorized Representative in the Permitted Pari Passu Intercreditor Agreement shall be deemed to include the New Representative. The terms of the Permitted Pari Passu Intercreditor Agreement are hereby incorporated herein by reference.
SECTION 2. The New Representative represents and warrants to each Collateral Agent, each Authorized Representative and the other First Lien Secured Parties, individually, that (i) it has full power and authority to enter into this Joinder Agreement in its capacity as [agent] [trustee] under [describe new facility], (ii) this Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, and (iii) the Additional First Lien Debt Documents relating to such Additional Senior Class Debt provide that, upon the New Representatives entry into this Joinder Agreement, the Additional Senior Class Debt Parties in respect of such Additional Senior Class Debt will be subject to and bound by the provisions of the Permitted Pari Passu Intercreditor Agreement as Additional First Lien Secured Parties.
SECTION 3. This Joinder Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder Agreement shall become effective when each Collateral Agent shall have received a counterpart of this Joinder Agreement that bears the signature of the New Representative. Delivery of an executed signature page to this Joinder Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Joinder Agreement.
SECTION 4. Except as expressly supplemented hereby, the Permitted Pari Passu Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Joinder Agreement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Permitted Pari Passu Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the Permitted Pari Passu Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
SECTION 8. The Borrower agrees to reimburse each Collateral Agent, in each case solely in accordance with the terms of the First Lien Debt Document applicable to such
Annex II-2
Collateral Agent, for its reasonable out-of-pocket expenses in connection with this Joinder Agreement including, to the extent included in the First Lien Debt Document applicable to such Collateral Agent, the reasonable fees, other charges and disbursements of counsel.
Annex II-3
IN WITNESS WHEREOF, the New Representative has duly executed this Joinder Agreement to the Permitted Pari Passu Intercreditor Agreement as of the day and year first above written.
[NAME OF NEW REPRESENTATIVE], | ||
as [ ] for the holders of [ ] | ||
By: |
|
|
Name: | ||
Title: |
Address for notices: |
|
attention of: |
Facsimile: |
Annex II-4
Acknowledged by:
[BANK OF AMERICA, N.A.], |
||
as the Applicable Collateral Agent |
||
By: |
|
|
Name: |
||
Title: |
||
[BANK OF AMERICA, N.A.], |
||
as the Applicable Authorized Representative |
||
By: |
|
|
Name: |
||
Title: |
[EACH OTHER COLLATERAL AGENT]
Annex II-5
Acknowledged by:
LAMB WESTON HOLDINGS, INC. |
||
By: |
|
|
Name: |
||
Title: |
||
THE OTHER GRANTORS |
||
LISTED ON SCHEDULE I HERETO |
||
By: |
|
|
Name: |
||
Title: |
Annex II-6
Schedule I to the
Joinder Agreement to the
Permitted Pari Passu Intercreditor Agreement
Grantors
Name |
Jurisdiction of
Organization |
|||
EXHIBIT G-2
[FORM OF]
JUNIOR PRIORITY INTERCREDITOR AGREEMENT
among
BANK OF AMERICA, N.A.,
as Senior Priority Representative for the First Lien Credit Agreement Secured Parties,
[ ],
as Second Priority Representative for the Initial Second Priority Debt Secured Parties,
and
each additional Representative from time to time party hereto
dated as of [ ], 20[ ]
G-2-1
JUNIOR PRIORITY INTERCREDITOR AGREEMENT dated as of [ ], 20[ ] (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time, this Agreement ), among BANK OF AMERICA, N.A. ( Bank of America ) as Representative for the First Lien Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the First Lien Collateral Agent ), [ ], acting in its capacity as [trustee] [administrative agent] [and collateral agent] under the Initial Second Lien Debt Agreement, as Representative for the Initial Second Priority Debt Secured Parties (in such capacity and together with its successors in such capacity, the Initial Second Lien Representative ), and each additional Senior Priority Representative and Second Priority Representative that from time to time becomes a party hereto pursuant to Section 8.09, and acknowledged and agreed by LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ).
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the First Lien Collateral Agent (for itself and on behalf of the First Lien Credit Agreement Secured Parties), the Initial Second Lien Representative (for itself and on behalf of the Initial Second Priority Debt Secured Parties) and each additional Senior Priority Representative (for itself and on behalf of the Additional Senior Secured Parties under the applicable Additional Senior Priority Debt Facility) and each additional Second Priority Representative (for itself and on behalf of the Additional Second Priority Secured Parties under the applicable Additional Second Priority Debt Facility) agree as follows:
ARTICLE 1
D EFINITIONS
SECTION 1.01. Certain Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth in the First Lien Credit Agreement or, if defined in the UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:
Additional Second Priority Debt means any Indebtedness that is incurred, issued or guaranteed by the Borrower and/or any other Guarantor (other than Indebtedness constituting Initial Second Lien Debt Obligations) which Indebtedness and guarantees are secured by Liens on the Second Priority Collateral (or a portion thereof) having the same priority (but without regard to control of remedies, other than as provided by the terms of the applicable Second Priority Debt Documents) as the Liens securing the Initial Second Lien Debt Obligations; provided , however , that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each Senior Priority Debt Document and Second Priority Debt Document in effect at the time of such incurrence and (ii) the Representative for the holders of such Indebtedness shall have become party to (A) this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof and (B) the Second Lien Intercreditor Agreement pursuant to, and by satisfying the conditions set forth therein; provided , further , that, if such Indebtedness will be the initial Additional Second Priority Debt incurred or issued by the Borrower after the incurrence or issuance of the Initial Second Lien Debt Obligations, then the Borrower, the Initial Second Lien Representative and the Representative for the holders of such Indebtedness shall have executed and delivered the Second Lien Intercreditor Agreement. Additional Second Priority Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Guarantors issued in exchange therefor.
G-2-2
Additional Second Priority Debt Documents means, with respect to any series, issue or class of Additional Second Priority Debt, the promissory notes, credit agreements, loan agreements, note purchase agreements, indentures or other operative agreements evidencing or governing such Indebtedness or the Liens securing such Indebtedness, including the Second Priority Collateral Documents.
Additional Second Priority Debt Facility means each credit agreement, loan agreement, note purchase agreement, indenture or other governing agreement with respect to any Additional Second Priority Debt.
Additional Second Priority Debt Obligations means, with respect to any series, issue or class of Additional Second Priority Debt, (a) all principal of, and premium and interest, fees, and expenses (including, without limitation, any interest, fees, or expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding or which would accrue but for the operation of Bankruptcy Laws, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to, such Additional Second Priority Debt, (b) all other amounts payable to the related Additional Second Priority Secured Parties under the related Additional Second Priority Debt Documents and (c) any renewals or extensions of the foregoing.
Additional Second Priority Secured Parties means, with respect to any series, issue or class of Additional Second Priority Debt, the holders of such Indebtedness or any other Additional Second Priority Debt Obligation, the Representative with respect thereto, any trustee or agent therefor under any related Additional Second Priority Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Guarantor under any related Additional Second Priority Debt Documents.
Additional Senior Priority Debt means any Indebtedness that is incurred, issued or guaranteed by the Borrower and/or any other Guarantor (other than Indebtedness constituting First Lien Credit Agreement Obligations) which Indebtedness and guarantees are secured by Liens on the Senior Priority Collateral (or a portion thereof) having the same priority (but without regard to control of remedies) as the Liens securing the First Lien Credit Agreement Obligations; provided , however , that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each Senior Priority Debt Document and Second Priority Debt Document in effect at the time of such incurrence and (ii) the Representative for the holders of such Indebtedness shall have become party to (A) this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof and (B) the Permitted Pari Passu Intercreditor Agreement pursuant to and by satisfying the conditions set forth therein; provided , further , that, if such Indebtedness will be the initial Additional Senior Priority Debt incurred or issued by the Borrower after the Closing Date, then the Borrower, the First Lien Collateral Agent and the Representative for such Indebtedness shall have executed and delivered the Permitted Pari Passu Intercreditor Agreement. Additional Senior Priority Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Guarantors issued in exchange therefor.
G-2-3
Additional Senior Priority Debt Documents means, with respect to any series, issue or class of Additional Senior Priority Debt, the promissory notes, credit agreements, loan agreements, note purchase agreements, indentures, or other operative agreements evidencing or governing such Indebtedness or the Liens securing such Indebtedness, including the Senior Priority Collateral Documents.
Additional Senior Priority Debt Facility means each credit agreement, loan agreement, note purchase agreement, indenture or other governing agreement with respect to any Additional Senior Priority Debt.
Additional Senior Priority Debt Obligations means, with respect to any series, issue or class of Additional Senior Priority Debt, (a) all principal of, and premium and interest, fees, and expenses (including, without limitation, any interest, fees, or expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding or which would accrue but for the operation of Bankruptcy Laws, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to, such Additional Senior Priority Debt, (b) all other amounts payable to the related Additional Senior Secured Parties under the related Additional Senior Priority Debt Documents and (c) any renewals or extensions of the foregoing.
Additional Senior Secured Parties means, with respect to any series, issue or class of Additional Senior Priority Debt, the holders of such Indebtedness or any other Additional Senior Priority Debt Obligation, the Representative with respect thereto, any trustee or agent therefor under any related Additional Senior Priority Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Guarantor under any related Additional Senior Priority Debt Documents.
Agreement has the meaning assigned to such term in the introductory paragraph of this Agreement.
Bank of America has the meaning assigned to such term in the introductory paragraph of this Agreement.
Bankruptcy Code means Title 11 of the United States Code, as amended.
Bankruptcy Laws means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, administration, rearrangement, judicial management, receivership, insolvency, reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise), or similar federal, state, or foreign debtor relief laws (including under any applicable corporate statute) of the United States or other applicable jurisdictions from time to time in effect.
Borrower has the meaning assigned to such term in the introductory paragraph of this Agreement.
Class Debt has the meaning assigned to such term in Section 8.09.
Class Debt Parties has the meaning assigned to such term in Section 8.09.
G-2-4
Class Debt Representatives has the meaning assigned to such term in Section 8.09.
Closing Date means the date hereof.
Collateral means the Senior Priority Collateral and the Second Priority Collateral.
Collateral Documents means the Senior Priority Collateral Documents and the Second Priority Collateral Documents.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
Copyrights means (a) all registered United States copyrights in all work that is subject to copyright protection pursuant to Title 17 of the United States Code, now existing or hereafter created or acquired, all registrations thereof, and all applications in connection therewith, including, without limitation, registrations and applications in the United States Copyright Office any similar office or agency of the United States, any state thereof or any other country or political subdivision thereof, or otherwise, and (b) all renewals thereof.
Debt Facility means any Senior Priority Debt Facility and any Second Priority Debt Facility.
Designated Second Priority Representative means (i) the Initial Second Lien Representative, so long as the Second Priority Debt Facility under the Initial Second Lien Debt Documents is the only Second Priority Debt Facility under this Agreement and (ii) at any time when clause (i) does not apply, the Applicable Authorized Representative (or similarly defined term) (as defined in the Second Lien Intercreditor Agreement) at such time.
Designated Senior Representative means (i) the First Lien Collateral Agent, so long as the Senior Priority Debt Facility under the First Lien Credit Agreement is the only Senior Priority Debt Facility under this Agreement and (ii) at any time when clause (i) does not apply, the Applicable Collateral Agent (or similarly defined term) (as defined in the Permitted Pari Passu Intercreditor Agreement) at such time.
DIP Financing has the meaning assigned to such term in Section 6.01.
Discharge of Senior Obligations means, except to the extent otherwise expressly provided in Section 5.06 and Section 6.04:
(a) payment in full in cash of all Senior Obligations (other than contingent indemnification, tax gross up, expense reimbursement or yield protection obligations, in each case, for which no claim has been made);
G-2-5
(b) termination or expiration of all commitments, if any, to extend credit that would constitute Senior Obligations; and
(c) termination of all letters of credit issued under the Senior Priority Debt Documents or providing cash collateral or backstop letters of credit reasonably acceptable to the applicable Senior Priority Representative or issuing bank in an amount and in a manner reasonably satisfactory to the applicable Senior Priority Representative and issuing bank.
Disposition means any conveyance, sale, lease, assignment, transfer, license or other disposition.
Equity Interests means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
First Lien Collateral Agent has the meaning assigned to such term in the introductory paragraph of this Agreement and shall include any successor administrative agent and collateral agent as provided in Section 10.06 of the First Lien Credit Agreement.
First Lien Credit Agreement means that certain Credit Agreement, dated as of November 9, 2016, among the Borrower, the Guarantors from time to time party thereto, the lenders from time to time party thereto, Bank of America, as administrative agent and collateral agent, and the other parties thereto.
First Lien Credit Agreement Credit Documents means the First Lien Credit Agreement and the other Loan Documents as defined in the First Lien Credit Agreement.
First Lien Credit Agreement Obligations means the Obligations (as such term is defined in the First Lien Credit Agreement).
First Lien Credit Agreement Secured Parties means the Secured Parties (as such term is defined in the Security Agreement).
Grantors means the Borrower and each Subsidiary of the Borrower that has granted a security interest pursuant to any Collateral Document to secure any Secured Obligations.
Guarantors means the Guarantors as defined in the First Lien Credit Agreement.
G-2-6
Initial Second Lien Debt Agreement mean that certain [Indenture] [Other Agreement], dated as of [ ], among [the Borrower], [the Guarantors identified therein] and [ ], as [trustee][administrative agent].
Initial Second Lien Debt Documents means the Initial Second Lien Debt Agreement and the other [Loan Documents] as defined in the Initial Second Lien Debt Agreement.
Initial Second Lien Debt Obligations means the [Obligations] as defined in the Initial Second Lien Debt Agreement.
Initial Second Priority Debt Secured Parties means the holders of the Initial Second Lien Debt Obligations.
Initial Second Lien Representative has the meaning assigned to such term in the introductory paragraph of this Agreement and shall include any successor [administrative agent] [trustee] [and collateral agent] as provided in Section [ ] of the Initial Second Lien Debt Agreement.
Insolvency or Liquidation Proceeding means:
(1) any case commenced by or against the Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, arrangement (including under any applicable corporate statute), recapitalization or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Borrower or any other Grantor or any similar case or proceeding relative to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, or other winding up of or relating to the Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.
Intellectual Property means, with respect to any Grantor, all intellectual and similar property of every kind and nature now owned or hereafter acquired by such Grantor, including Patents, Copyrights, Trademarks and all related documentation and registrations and all additions, improvements or accessions to any of the foregoing.
Joinder Agreement means a supplement to this Agreement in the form of Annex I or Annex II hereof required to be delivered by a Representative to the Designated Senior Representative or Designated Second Priority Representative, as the case may be, pursuant to Section 8.09 hereof in order to include an additional Debt Facility hereunder and to become the Representative hereunder for the Senior Priority Secured Parties or Second Priority Secured Parties, as the case may be, under such Debt Facility.
G-2-7
Officers Certificate has the meaning assigned to such term in Section 8.08.
Patents means (a) all letters patent of the United States or any other country and all reissues and extensions thereof, and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof.
Permitted Pari Passu Intercreditor Agreement means (i) an intercreditor agreement substantially in the form of Exhibit G-1 to the First Lien Credit Agreement, or (ii) a customary intercreditor agreement in form and substance reasonably acceptable to the Senior Priority Representative with respect to each Senior Priority Debt Facility in existence at the time such intercreditor agreement is entered into and the Borrower, and which provides that the Liens securing all Indebtedness covered thereby shall be of equal priority (but without regard to the control of remedies).
Person means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Pledged or Controlled Collateral has the meaning assigned to such term in Section 5.05(a).
Proceeds means the proceeds of any sale, collection or other liquidation of Shared Collateral and any payment or distribution made in respect of Shared Collateral in an Insolvency or Liquidation Proceeding and any amounts received by any Senior Priority Representative or any Senior Priority Secured Party from a Second Priority Secured Party in respect of Shared Collateral pursuant to this Agreement and shall include all proceeds, as such term is defined in the UCC.
Purchase Event has the meaning assigned to such term in Section 5.07.
Recovery has the meaning assigned to such term in Section 6.04.
Refinance means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, loan agreement, note purchase agreement, indenture or other agreement. Refinanced and Refinancing have correlative meanings.
Registered Equivalent Notes means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the SEC.
Representatives means the Senior Priority Representatives and the Second Priority Representatives.
G-2-8
SEC means the United States Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
Second Lien Intercreditor Agreement means a customary intercreditor agreement in form and substance reasonably acceptable to the Second Priority Representative with respect to each Second Priority Debt Facility in existence at the time such intercreditor agreement is entered into and the Borrower, and which provides that the Liens securing all Indebtedness covered thereby shall be of equal priority (but without regard to the control of remedies).
Second Priority Class Debt has the meaning assigned to such term in Section 8.09.
Second Priority Class Debt Parties has the meaning assigned to such term in Section 8.09.
Second Priority Class Debt Representative has the meaning assigned to such term in Section 8.09.
Second Priority Collateral means any Collateral (or equivalent term) as defined in any Initial Second Lien Debt Documents or any other Second Priority Debt Document or any other assets of the Borrower or any other Grantor with respect to which a Lien is granted or purported to be granted pursuant to a Second Priority Collateral Document as security for any Second Priority Debt Obligation.
Second Priority Collateral Documents means the [Collateral Documents] as defined in the Initial Second Lien Debt Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any other Grantor for purposes of providing collateral security for any Second Priority Debt Obligation.
Second Priority Debt Documents means (a) the Initial Second Lien Debt Documents and (b) any Additional Second Priority Debt Documents.
Second Priority Debt Facilities means the Initial Second Lien Debt Agreement and any Additional Second Priority Debt Facilities.
Second Priority Debt Obligations means the Initial Second Lien Debt Obligations and any Additional Second Priority Debt Obligations.
Second Priority Enforcement Date means, with respect to any Second Priority Representative, the date which is 180 days (through which 180 day period such Second Priority Representative was the Designated Second Priority Representative) after the occurrence of both (i) an Event of Default (under and as defined in the Second Priority Debt Document for which such Second Priority Representative has been named as Representative) and (ii) the Designated Senior Representatives and each other Representatives receipt of written notice from such Second Priority Representative that (x) such Second Priority Representative is the Designated Second Priority Representative and that an Event of Default (under and as defined in the Second Priority Debt Document for which such Second Priority Representative has been named as Representative) has occurred and is continuing and (y) the Second Priority Debt Obligations of the
G-2-9
series, issue or class with respect to which such Second Priority Representative is the Second Priority Representative are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable Second Priority Debt Document; provided that the Second Priority Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred (1) at any time a Designated Senior Representative has commenced and is diligently pursuing any enforcement action with respect to any Shared Collateral or (2) at any time any Grantor which has granted a security interest in any Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
Second Priority Lien means the Liens on the Second Priority Collateral in favor of Second Priority Secured Parties under the Second Priority Collateral Documents.
Second Priority Representative means (i) in the case of any Initial Second Lien Debt Obligations or the Initial Second Priority Debt Secured Parties, the Initial Second Lien Representative and (ii) in the case of any Additional Second Priority Debt Facility and the Additional Second Priority Secured Parties thereunder, the trustee, administrative agent, collateral agent, security agent or similar agent under such Additional Second Priority Debt Facility that is named as the Representative in respect of such Additional Second Priority Debt Facility in the applicable Joinder Agreement.
Second Priority Secured Parties means the Initial Second Priority Debt Secured Parties and any Additional Second Priority Secured Parties.
Secured Obligations means the Senior Obligations and the Second Priority Debt Obligations.
Secured Parties means the Senior Priority Secured Parties and the Second Priority Secured Parties.
Senior Lien means the Liens on the Senior Priority Collateral in favor of the Senior Priority Secured Parties under the Senior Priority Collateral Documents.
Senior Obligations means the First Lien Credit Agreement Obligations and any Additional Senior Priority Debt Obligations.
Senior Priority Class Debt has the meaning assigned to such term in Section 8.09.
Senior Priority Class Debt Parties has the meaning assigned to such term in Section 8.09.
Senior Priority Class Debt Representative has the meaning assigned to such term in Section 8.09.
Senior Priority Collateral means any Collateral (or equivalent term) as defined in any First Lien Credit Agreement Credit Document or any other Senior Priority Debt Document or any other assets of the Borrower or any other Grantor with respect to which a Lien is granted or purported to be granted pursuant to a Senior Priority Collateral Document as security for any Senior Obligations.
G-2-10
Senior Priority Collateral Documents means the Collateral Documents as defined in the First Lien Credit Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any other Grantor for purposes of providing collateral security for any Senior Obligation.
Senior Priority Debt Documents means (a) the First Lien Credit Agreement Credit Documents and (b) any Additional Senior Priority Debt Documents.
Senior Priority Debt Facilities means the First Lien Credit Agreement and any Additional Senior Priority Debt Facilities.
Senior Priority Representative means (i) in the case of any First Lien Credit Agreement Obligations or the First Lien Credit Agreement Secured Parties, the First Lien Collateral Agent and (ii) in the case of any Additional Senior Priority Debt Facility and the Additional Senior Secured Parties thereunder, the trustee, administrative agent, collateral agent, security agent or similar agent under such Additional Senior Priority Debt Facility that is named as the Representative in respect of such Additional Senior Priority Debt Facility in the applicable Joinder Agreement.
Senior Priority Secured Parties means the First Lien Credit Agreement Secured Parties and any Additional Senior Secured Parties.
Shared Collateral means, at any time, Collateral in which the holders of Senior Obligations under at least one Senior Priority Debt Facility (or their Representatives) and the holders of Second Priority Debt Obligations under at least one Second Priority Debt Facility (or their Representatives) hold a security interest at such time (or, in the case of the Senior Priority Debt Facilities, are deemed pursuant to Article 2 to hold a security interest). If, at any time, any portion of the Senior Priority Collateral under one or more Senior Priority Debt Facilities does not constitute Second Priority Collateral under one or more Second Priority Debt Facilities, then such portion of such Senior Priority Collateral shall constitute Shared Collateral only with respect to the Second Priority Debt Facilities for which it constitutes Second Priority Collateral at such time and shall not constitute Shared Collateral for any Second Priority Debt Facility which does not have a security interest in such Collateral at such time.
Trademarks means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise and (b) all renewals thereof.
Uniform Commercial Code or UCC means, unless otherwise specified, the Uniform Commercial Code as from time to time in effect in the State of New York.
G-2-11
SECTION 1.02. Terms Generally. The rules of interpretation set forth in Sections 1.02, 1.03, 1.04 and 1.05 of the First Lien Credit Agreement are incorporated herein mutatis mutandis .
ARTICLE 2
P RIORITIES AND A GREEMENTS WITH R ESPECT TO S HARED C OLLATERAL
SECTION 2.01. Subordination. Notwithstanding the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection of any Liens granted to any Second Priority Representative or any Second Priority Secured Parties on the Shared Collateral or of any Liens granted to any Senior Priority Representative or any other Senior Priority Secured Party on the Shared Collateral (or any actual or alleged defect in any of the foregoing) and notwithstanding any provision of the UCC, any applicable Law, any Second Priority Debt Document or any Senior Priority Debt Document or any other circumstance whatsoever, each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, hereby agrees that (a) any Lien on the Shared Collateral securing or purporting to secure any Senior Obligations now or hereafter held by or on behalf of any Senior Priority Representative or any other Senior Priority Secured Party or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Shared Collateral securing or purporting to secure any Second Priority Debt Obligations and (b) any Lien on the Shared Collateral securing or purporting to secure any Second Priority Debt Obligations now or hereafter held by or on behalf of any Second Priority Representative, any Second Priority Secured Parties or any other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Shared Collateral securing or purporting to secure any Senior Obligations. All Liens on the Shared Collateral securing or purporting to secure any Senior Obligations shall be and remain senior in all respects and prior to all Liens on the Shared Collateral securing or purporting to secure any Second Priority Debt Obligations for all purposes, whether or not such Liens securing or purporting to secure any Senior Obligations are subordinated to any Lien securing any other obligation of the Borrower, any Grantor or any other Person or otherwise subordinated, voided, avoided, invalidated or lapsed.
SECTION 2.02. Nature of Senior Lender Claims. Each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, acknowledges that (a) a portion of the Senior Obligations is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, (b) the terms of the Senior Priority Debt Documents and the Senior Obligations may be amended, restated, amended and restated, supplemented or otherwise modified, and the Senior Obligations, or a portion thereof, may be Refinanced from time to time and (c) the aggregate amount of the Senior Obligations may be increased, in each case, without notice to or consent by the Second Priority Representatives or the Second Priority Secured Parties and without affecting the provisions hereof, except as otherwise expressly set forth herein. The Lien priorities provided for in Section 2.01 shall not be altered or otherwise affected by any amendment, restatement, amendment and restatement, supplement or other modification, or any Refinancing, of either the Senior Obligations or the Second Priority Debt Obligations, or any portion thereof. As between the Borrower and the other Grantors and the Second Priority Secured Parties, the foregoing provisions will not limit or otherwise affect the obligations of the Borrower or any other Grantor contained in any Second Priority Debt Document with respect to the incurrence of additional Senior Obligations.
G-2-12
SECTION 2.03. Prohibition on Contesting Liens. (a) Each of the Second Priority Representatives, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, priority or enforceability of any Lien securing any Senior Obligations held (or purported to be held) by or on behalf of any Senior Priority Representative or any of the other Senior Priority Secured Parties or any other agent or trustee therefor in any Senior Priority Collateral or the allowability of any claims asserted with respect to any Senior Obligations in any proceeding (including any Insolvency or Liquidation Proceeding) and (b) each Senior Priority Representative, for itself and on behalf of each Senior Priority Secured Party under its Senior Priority Debt Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, priority or enforceability of any Lien securing any Second Priority Debt Obligations held (or purported to be held) by or on behalf of any Second Priority Representative or any of the Second Priority Secured Parties in the Second Priority Collateral or the allowability of any claims asserted with respect to any Second Priority Debt Obligations in any proceeding (including any Insolvency or Liquidation Proceeding). Notwithstanding the foregoing, no provision in this Agreement shall be construed to prevent or impair the rights of any Senior Priority Representative to enforce this Agreement (including the priority of the Liens securing the Senior Obligations as provided in Section 2.01) or any of the Senior Priority Debt Documents.
SECTION 2.04. No New Liens. The parties hereto agree that, so long as the Discharge of Senior Obligations has not occurred, (a) none of the Grantors shall grant any additional Liens on any asset or property of any Grantor to secure any Second Priority Debt Obligation unless it has also granted, or concurrently therewith also grants, a Lien on such asset or property of such Grantor to secure the Senior Obligations; and (b) if any Second Priority Representative or any Second Priority Secured Party shall hold any Lien on any assets or property of any Grantor securing any Second Priority Debt Obligations that are not also subject to the Liens securing all Senior Obligations under the Senior Priority Collateral Documents, such Second Priority Representative or Second Priority Secured Party (i) shall notify the Designated Senior Representative promptly upon becoming aware thereof and, unless such Grantor shall promptly also grant a similar Lien on such assets or property to each Senior Priority Representative as security for the Senior Obligations, shall assign such Lien to the Designated Senior Representative as security for all Senior Obligations for the benefit of the Senior Priority Secured Parties (but may retain a junior Lien on such assets or property subject to the terms hereof) and (ii) until such assignment or such grant of a similar Lien to each Senior Priority Representative, shall be deemed to hold and have held such Lien for the benefit of each Senior Priority Representative and the other Senior Priority Secured Parties as security for the Senior Obligations. To the extent that the provisions of the immediately preceding sentence are not complied with for any reason, without limiting any other right or remedy available to any Senior Priority Representative or any other Senior Priority Secured Party, each Second Priority Representative agrees, for itself and on behalf of the other Second Priority Secured Parties for which it has been named the Representative, that any amounts received by or distributed to any Second Priority Secured Party pursuant to or as a result of any Lien granted in contravention of this Section 2.04 shall be subject to Section 4.01 and Section 4.02.
G-2-13
SECTION 2.05. Perfection Of Liens. Except for the limited agreements of the Senior Priority Representatives pursuant to Section 5.05 hereof, none of the Senior Priority Representatives or the Senior Priority Secured Parties shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Shared Collateral for the benefit of the Second Priority Representatives or the Second Priority Secured Parties. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the Senior Priority Secured Parties and the Second Priority Secured Parties and shall not impose on the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives, the Second Priority Secured Parties or any agent or trustee therefor any obligations in respect of the disposition of Proceeds of any Shared Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or Governmental Authority or any applicable Law.
SECTION 2.06. Certain Cash Collateral. Notwithstanding anything in this Agreement or any other Senior Priority Debt Documents or Second Priority Debt Documents to the contrary, collateral consisting of cash and cash equivalents pledged to secure First Lien Credit Agreement Obligations consisting of reimbursement obligations in respect of Letters of Credit or otherwise held by the First Lien Collateral Agent pursuant to Section 2.03, 2.04, 2.05, 2.14 or 2.15 of the First Lien Credit Agreement (or any equivalent successor provision) shall be applied as specified in the First Lien Credit Agreement and will not constitute Shared Collateral.
ARTICLE 3
E NFORCEMENT
SECTION 3.01. Exercise of Remedies .
(a) So long as the Discharge of Senior Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor, (i) neither any Second Priority Representative nor any Second Priority Secured Party will (x) exercise or seek to exercise any rights or remedies (including setoff) with respect to any Shared Collateral in respect of any Second Priority Debt Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), (y) contest, protest or object to any foreclosure proceeding or other action brought with respect to the Shared Collateral or any other Senior Priority Collateral by any Senior Priority Representative or any Senior Priority Secured Party in respect of the Senior Obligations, the exercise of any right by any Senior Priority Representative or any Senior Priority Secured Party (or any agent or sub-agent on their behalf) in respect of the Senior Obligations under any lockbox agreement, control agreement, landlord waiver or bailees letter or similar agreement or arrangement to which any Senior Priority Representative or any Senior Priority Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party of any rights and remedies relating to the Shared Collateral under the Senior Priority Debt Documents or otherwise in respect of the Senior Priority Collateral or the Senior Obligations, or (z) object to the forbearance by the Senior Priority Secured Parties from bringing or pursuing any
G-2-14
foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Shared Collateral in respect of Senior Obligations and (ii) except as otherwise provided herein, the Senior Priority Representatives and the Senior Priority Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including setoff and the right to credit bid their debt) and make determinations regarding the release, disposition or restrictions with respect to the Shared Collateral or any other Senior Priority Collateral without any consultation with or the consent of any Second Priority Representative or any Second Priority Secured Party; provided , however , that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Borrower or any other Grantor, any Second Priority Representative may file a claim, proof of claim, or statement of interest with respect to the Second Priority Debt Obligations under its Second Priority Debt Facility in a manner that is consistent with the terms and conditions of this Agreement, (B) any Second Priority Representative may take any action (not adverse to the prior Liens on the Shared Collateral securing the Senior Obligations or the rights of the Senior Priority Representatives or the Senior Priority Secured Parties to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Shared Collateral, (C) any Second Priority Representative and the Second Priority Secured Parties may exercise their rights and remedies as unsecured creditors, to the extent provided and subject to the restrictions contained in Section 5.04, (D) any Second Priority Representative may exercise the rights and remedies provided for in Section 6.03 and the Second Priority Secured Parties may file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance that is not permitted by this Agreement of the claims or Liens of the Second Priority Secured Parties or the avoidance of any Second Priority Lien to the extent not inconsistent with the terms of this Agreement, (E) any Second Priority Secured Party may (subject to the provisions of Section 6.10(b)) vote on any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency or Liquidation Proceeding that conforms to the terms and conditions of this Agreement, and (F) from and after the Second Priority Enforcement Date, the Designated Second Priority Representative (or such other Person, if any, as is so authorized under the Second Lien Intercreditor Agreement) may exercise or seek to exercise any rights or remedies (including setoff) with respect to any Shared Collateral in respect of any Second Priority Debt Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), but only so long as (1) a Designated Senior Representative has not commenced and is not diligently pursuing any enforcement action with respect to any of the Shared Collateral or (2) any Grantor which has granted a security interest in any Shared Collateral is not then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding. In exercising rights and remedies with respect to the Senior Priority Collateral, the Senior Priority Representatives and the Senior Priority Secured Parties may enforce the provisions of the Senior Priority Debt Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code or any other applicable Law of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
G-2-15
(b) So long as the Discharge of Senior Obligations has not occurred, except as expressly provided in the proviso to clause (ii) of Section 3.01(a) but subject to Section 4.01, each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, agrees that it will not take or receive any Shared Collateral or any Proceeds of Shared Collateral in connection with the exercise of any right or remedy (including setoff) with respect to any Shared Collateral in respect of Second Priority Debt Obligations. Without limiting the generality of the foregoing, unless and until the Discharge of Senior Obligations has occurred, except as expressly provided in the proviso in clause (ii) of Section 3.01(a), the sole right of the Second Priority Representatives and the Second Priority Secured Parties with respect to the Shared Collateral is to hold a Lien on the Shared Collateral in respect of Second Priority Debt Obligations pursuant to the Second Priority Debt Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Senior Obligations has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.01(a), (i) each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that neither such Second Priority Representative nor any such Second Priority Secured Party will take any action that would hinder, delay or interfere with any exercise of remedies undertaken by any Senior Priority Representative or any Senior Priority Secured Party with respect to the Shared Collateral under the Senior Priority Debt Documents, including any Disposition of the Shared Collateral, whether by foreclosure or otherwise, and (ii) each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby waives any and all rights it or any such Second Priority Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the Senior Priority Representatives or the Senior Priority Secured Parties seek to enforce or collect the Senior Obligations or the Liens granted on any of the Senior Priority Collateral, regardless of whether any action or failure to act by or on behalf of any Senior Priority Representative or any other Senior Priority Secured Party is adverse to the interests of the Second Priority Secured Parties.
(d) Each Second Priority Representative hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Second Priority Debt Document shall be deemed to restrict in any way the rights and remedies of the Senior Priority Representatives or the Senior Priority Secured Parties with respect to the Senior Priority Collateral as set forth in this Agreement and the Senior Priority Debt Documents.
(e) Until the Discharge of Senior Obligations, except as expressly provided in the proviso in clause (ii) of Section 3.01(a), the Designated Senior Representative shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral and shall have the exclusive right to determine and direct the time, method and place for exercising such right or remedy or conducting any proceeding with respect thereto. Following the Discharge of Senior Obligations, the Designated Second Priority Representative (or any Person authorized by it) shall have the exclusive right to exercise any right or remedy with respect to the Collateral, and the Designated Second Priority Representative shall have the exclusive right to direct the time, method and place of exercising or conducting any proceeding for the exercise of any right or remedy available to the Second Priority Secured Parties with respect to the Collateral, or of exercising or directing the exercise of any trust or power conferred on the Second Priority
G-2-16
Representatives, or for the taking of any other action authorized by the Second Priority Collateral Documents; provided , however , that nothing in this Section shall impair the right of any Second Priority Representative or other agent or trustee acting on behalf of the Second Priority Secured Parties to take such actions with respect to the Collateral after the Discharge of Senior Obligations as may be otherwise required or authorized pursuant to any intercreditor agreement governing the Second Priority Secured Parties or the Second Priority Debt Obligations.
SECTION 3.02. Cooperation. Subject to the proviso in clause (ii) of Section 3.01(a), each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, agrees that, unless and until the Discharge of Senior Obligations has occurred, it will not commence, or join with any Person (other than the Senior Priority Secured Parties and the Senior Priority Representatives upon the request of the Designated Senior Representative) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Shared Collateral under any of the Second Priority Debt Documents or otherwise in respect of the Second Priority Debt Obligations.
SECTION 3.03. Actions Upon Breach. Should any Second Priority Representative or any Second Priority Secured Party, contrary to this Agreement, in any way take, attempt to take or threaten to take any action with respect to the Shared Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement) or fail to take any action required by this Agreement, any Senior Priority Representative or other Senior Priority Secured Party (in its or their own name or in the name of the Borrower or any other Grantor) or the Borrower may obtain relief against such Second Priority Representative or such Second Priority Secured Party by injunction, specific performance or other appropriate equitable relief. Each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, hereby (i) agrees that the Senior Priority Secured Parties damages from the actions of the Second Priority Representatives or any Second Priority Secured Party may at that time be difficult to ascertain and may be irreparable and waives any defense that the Borrower, any other Grantor or the Senior Priority Secured Parties cannot demonstrate damage or be made whole by the awarding of damages and (ii) irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by any Senior Priority Representative, any other Senior Priority Secured Party or the Borrower.
ARTICLE 4
P AYMENTS
SECTION 4.01. Application of Proceeds. So long as the Discharge of Senior Obligations has not occurred and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, the Shared Collateral or Proceeds thereof received in connection with the sale or other disposition of, or collection on, such Shared Collateral upon the exercise of remedies shall be applied by the Designated Senior Representative to the Senior Obligations in such order as specified in the relevant Senior Priority Debt Documents and, if applicable, the Permitted Pari Passu Intercreditor Agreement, until the Discharge of Senior Obligations has occurred. Upon the Discharge of Senior Obligations, each applicable Senior Priority Representative shall deliver promptly to the Designated Second Priority Representative any Shared Collateral or Proceeds
G-2-17
thereof held by it in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, to be applied by the Designated Second Priority Representative to the Second Priority Debt Obligations in such order as specified in the relevant Second Priority Debt Documents and, if applicable, the Second Lien Intercreditor Agreement.
SECTION 4.02. Payments Over. So long as the Discharge of Senior Obligations has not occurred, any Shared Collateral or Proceeds thereof received by any Second Priority Representative or any Second Priority Secured Party in connection with the exercise of any right or remedy (including setoff) relating to the Shared Collateral or otherwise shall be segregated and held in trust for the benefit of and forthwith paid over to the Designated Senior Representative for the benefit of the Senior Priority Secured Parties in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. The Designated Senior Representative is hereby authorized to make any such endorsements as agent for each of the Second Priority Representatives or any such Second Priority Secured Party. This authorization is coupled with an interest and is irrevocable.
ARTICLE 5
O THER A GREEMENTS
SECTION 5.01. Releases .
(a) Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that, in the event of a Disposition of any specified item of Shared Collateral (including all or substantially all of the Equity Interests of the Borrower or any Subsidiary of the Borrower) (i) in connection with the exercise of remedies in respect of Collateral by a Designated Senior Representative or (ii) if not in connection with the exercise of remedies in respect of Collateral by the Designated Senior Representative, so long as such Disposition is permitted by the terms of the Senior Priority Debt Documents and, in the case of this clause (ii) other than in connection with the Discharge of Senior Obligations, the Liens granted to the Second Priority Representatives and the Second Priority Secured Parties upon such Shared Collateral (but not on the Proceeds thereof that were not applied to the payment of Senior Obligations) to secure Second Priority Debt Obligations shall terminate and be released, automatically and without any further action, concurrently with the termination and release of all Liens granted upon such Shared Collateral to secure Senior Obligations. Upon delivery to a Second Priority Representative of an Officers Certificate stating that any such termination and release of Liens securing the Senior Obligations has become effective (or shall become effective concurrently with such termination and release of the Liens granted to the Second Priority Secured Parties and the Second Priority Representatives) and any necessary or proper instruments of termination or release prepared by the Borrower or any other Grantor, such Second Priority Representative will promptly execute, deliver or acknowledge, at the Borrowers sole cost and expense and without any representation or warranty, such instruments to evidence such termination and release of the Liens.
(b) Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby irrevocably constitutes and appoints the Designated Senior Representative and any officer or agent of the Designated
G-2-18
Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Second Priority Representative or such Second Priority Secured Party or in the Designated Senior Representatives own name, from time to time in the Designated Senior Representatives discretion, for the purpose of carrying out the terms of Section 5.01(a), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of Section 5.01(a), including any termination statements, endorsements or other instruments of transfer or release.
(c) Unless and until the Discharge of Senior Obligations has occurred, each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby consents to the application, whether prior to or after an event of default under any Senior Priority Debt Document of Proceeds of Shared Collateral to the repayment of Senior Obligations pursuant to the Senior Priority Debt Documents, provided that nothing in this Section 5.01(c) shall be construed to prevent or impair the rights of the Second Priority Representatives or the Second Priority Secured Parties to receive Proceeds in connection with the Second Priority Debt Obligations not otherwise in contravention of this Agreement.
(d) Notwithstanding anything to the contrary in any Second Priority Collateral Document, in the event the terms of a Senior Priority Collateral Document and a Second Priority Collateral Document each require any Grantor (i) to make payment in respect of any item of Shared Collateral, (ii) to deliver or afford control over any item of Shared Collateral to, or deposit any item of Shared Collateral with, (iii) to register ownership of any item of Shared Collateral in the name of or make an assignment of ownership of any Shared Collateral or the rights thereunder to, (iv) cause any securities intermediary, commodity intermediary or other Person acting in a similar capacity to agree to comply, in respect of any item of Shared Collateral, with instructions or orders from, or to treat, in respect of any item of Shared Collateral, as the entitlement holder, (v) hold any item of Shared Collateral in trust for (to the extent such item of Shared Collateral cannot be held in trust for multiple parties under applicable Law), (vi) obtain the agreement of a bailee or other third party to hold any item of Shared Collateral for the benefit of or subject to the control of or, in respect of any item of Shared Collateral, to follow the instructions of or (vii) obtain the agreement of a landlord with respect to access to leased premises where any item of Shared Collateral is located or waivers or subordination of rights with respect to any item of Shared Collateral in favor of, in any case, both the Designated Senior Representative and any Second Priority Representative or Second Priority Secured Party, such Grantor may, until the applicable Discharge of Senior Obligations has occurred, comply with such requirement under the Second Priority Collateral Document as it relates to such Shared Collateral by taking any of the actions set forth above only with respect to, or in favor of, the Designated Senior Representative.
SECTION 5.02. Insurance and Condemnation Awards. Unless and until the Discharge of Senior Obligations has occurred, subject in each case to the rights of the Grantors under the Senior Priority Debt Documents, the Designated Senior Representative and the Senior Priority Secured Parties shall have the sole and exclusive right (a) to adjust settlement for any insurance policy covering the Shared Collateral in the event of any loss thereunder and (b) to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral.
G-2-19
Unless and until the Discharge of Senior Obligations has occurred, and subject to the rights of the Grantors under the Senior Priority Debt Documents and the Second Priority Debt Documents, including but not limited to reinvestment rights, all proceeds of any such policy and any such award, if in respect of the Shared Collateral, shall be paid (i) first, prior to the occurrence of the Discharge of Senior Obligations, to the Designated Senior Representative for the benefit of Senior Priority Secured Parties pursuant to the terms of the Senior Priority Debt Documents, (ii) second, after the occurrence of the Discharge of Senior Obligations, to the Designated Second Priority Representative for the benefit of the Second Priority Secured Parties pursuant to the terms of the applicable Second Priority Debt Documents and (iii) third, if no Senior Obligations or Second Priority Debt Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Second Priority Representative or any Second Priority Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the Designated Senior Representative (or after the Discharge of Senior Obligations, the Designated Second Priority Representative) to receive such amounts in accordance with the terms of Section 4.02.
SECTION 5.03. Certain Amendments .
(a) No Second Priority Collateral Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Second Priority Collateral Document, would be prohibited by or conflict with any of the terms of this Agreement. The Designated Second Priority Representative agrees to deliver to the Designated Senior Representative copies of (i) any amendments, supplements or other modifications to the Second Priority Collateral Documents and (ii) any new Second Priority Collateral Documents promptly after effectiveness thereof. Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that each Second Priority Collateral Document under its Second Priority Debt Facility shall include the following language (or language to similar effect reasonably approved by the Designated Senior Representative):
Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Second Priority Representative pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Priority Secured Parties (as defined in the Junior Priority Intercreditor Agreement referred to below), including liens and security interests granted to Bank of America, N.A., as collateral agent, pursuant to or in connection with the Credit Agreement dated as of November 9, 2016 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among Lamb Weston Holdings, Inc., the lenders from time to time party thereto, Bank of America, N.A., as administrative agent and collateral agent, and the other parties thereto, and (ii) the exercise of any right or remedy by the Second Priority Representative or any other secured party hereunder is subject to the limitations and provisions of the Junior Priority Intercreditor Agreement dated as of [ ], 20[ ] (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Junior Priority Intercreditor Agreement ), among Bank of America, N.A., as First Lien Collateral Agent, [ ], as
G-2-20
Initial Second Lien Representative, [Lamb Weston Holdings, Inc.] and the other parties thereto. In the event of any conflict between the terms of the Junior Priority Intercreditor Agreement and the terms of this Agreement, the terms of the Junior Priority Intercreditor Agreement shall govern.
(b) In the event that each applicable Senior Priority Representative and/or the Senior Priority Secured Parties enter into any amendment, waiver or consent in respect of any of the Senior Priority Collateral Documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Priority Collateral Document or changing in any manner the rights of the Senior Priority Representatives, the Senior Priority Secured Parties, the Borrower or any other Grantor thereunder (including the release of any Liens in Senior Priority Collateral) in a manner that is applicable to all Senior Priority Debt Facilities, then such amendment, waiver or consent shall apply automatically to any comparable provision of each comparable Second Priority Collateral Document without the consent of any Second Priority Representative or any Second Priority Secured Party and without any action by any Second Priority Representative, the Borrower or any other Grantor; provided , however , that (x) no such amendment, waiver or consent shall (i) remove assets subject to the Lien of any Second Priority Collateral Document, except as provided for in Section 5.01(a) or (ii) impose duties that are adverse on any Second Priority Representative without its prior written consent and (y) written notice of such amendment, waiver or consent shall have been given to each Second Priority Representative within 10 Business Days after the effectiveness of such amendment, waiver or consent.
(c) Each of the Senior Priority Debt Documents may be amended, restated, amended and restated, waived, supplemented or otherwise modified in accordance with its terms, and the indebtedness under any Senior Priority Debt Document may be Refinanced, in each case, without the consent of any Second Priority Representative or Second Priority Secured Party, all without affecting the Lien priorities provided for herein or the other provisions hereof; provided , however , that, without the consent of the Second Priority Representatives, no such amendment, restatement, supplement, modification or Refinancing (or successive amendments, restatements, supplements, modifications or Refinancings) shall contravene any provision of this Agreement.
(d) Each of the Second Priority Debt Facilities may be amended, restated, waived, supplemented or otherwise modified in accordance with its terms, and the indebtedness under the Second Priority Debt Facilities may be Refinanced, in each case, without the consent of any Senior Priority Representative or Senior Priority Secured Party; provided , however , that, without the consent of (x) until the Discharge of First Lien Credit Agreement Obligations, the First Lien Collateral Agent, acting with the consent of the Required Lenders (as such term is defined in the First Lien Credit Agreement) and (y) each other Senior Priority Representative (acting with the consent of the requisite holders of each series of Additional Senior Priority Debt), no such amendment, restatement, supplement or modification shall (1) contravene any provision of this Agreement, or (2) reduce the capacity to incur Indebtedness for borrowed money constituting Senior Obligations to an amount less than the aggregate principal amount of term loans and aggregate principal amount of revolving commitments, in each case, under the Senior Priority Debt Documents on the day of any such amendment, restatement, supplement, modification or Refinancing.
G-2-21
SECTION 5.04. Rights As Unsecured Creditors. The Second Priority Representatives and the Second Priority Secured Parties may exercise rights and remedies as unsecured creditors against the Borrower and any other Grantor in accordance with the terms of the Second Priority Debt Documents and applicable Law so long as such rights and remedies do not violate, or are not otherwise inconsistent with, any provision of this Agreement. Nothing in this Agreement shall prohibit the receipt by any Second Priority Representative or any Second Priority Secured Party of the required payments of principal, premium, interest, fees and other amounts due under the Second Priority Debt Documents so long as such receipt is not the direct or indirect result of the exercise by a Second Priority Representative or any Second Priority Secured Party of rights or remedies in respect of Shared Collateral. In the event any Second Priority Representative or any Second Priority Secured Party becomes a judgment Lien creditor in respect of Shared Collateral as a result of its enforcement of its rights as an unsecured creditor in respect of Second Priority Debt Obligations, such judgment Lien shall be subordinated to the Liens securing Senior Obligations on the same basis as the other Liens securing the Second Priority Debt Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement. Nothing in this Agreement shall impair or otherwise adversely affect any rights or remedies the Senior Priority Representatives or the Senior Priority Secured Parties may have with respect to the Senior Priority Collateral.
SECTION 5.05. Gratuitous Bailee for Perfection .
(a) Each Senior Priority Representative acknowledges and agrees that if it shall at any time hold a Lien securing any Senior Obligations on any Shared Collateral that can be perfected by the possession or control of such Shared Collateral or of any account in which such Shared Collateral is held, and if such Shared Collateral or any such account is in fact in the possession or under the control of such Senior Priority Representative, or of agents or bailees of such Person (such Shared Collateral being referred to herein as the Pledged or Controlled Collateral ), or if it shall at any time obtain any landlord waiver or bailees letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, the applicable Senior Priority Representative shall also hold such Pledged or Controlled Collateral, or take such actions with respect to such landlord waiver, bailees letter or similar agreement or arrangement, as sub-agent and gratuitous bailee for the relevant Second Priority Representatives, in each case solely for the purpose of perfecting the Liens granted under the relevant Second Priority Collateral Documents and subject to the terms and conditions of this Section 5.05.
(b) In the event that any Senior Priority Representative (or its agents or bailees), or after the Discharge of Senior Obligations, any Second Priority Representative, has Lien filings against Intellectual Property that is part of the Shared Collateral that are necessary for the perfection of Liens in such Shared Collateral, such Senior Priority Representative, or after the Discharge of Senior Obligations, such Second Priority Representative, agrees to hold such Liens as sub-agent and gratuitous bailee for the relevant Second Priority Representatives and any assignee thereof, solely for the purpose of perfecting the security interest granted in such Liens pursuant to the relevant Second Priority Collateral Documents, subject to the terms and conditions of this Section 5.05.
G-2-22
(c) Except as otherwise specifically provided herein, until the Discharge of Senior Obligations has occurred, the Senior Priority Representatives and the Senior Priority Secured Parties shall be entitled to deal with the Pledged or Controlled Collateral in accordance with the terms of the Senior Priority Debt Documents as if the Liens under the Second Priority Collateral Documents did not exist. The rights of the Second Priority Representatives and the Second Priority Secured Parties with respect to the Pledged or Controlled Collateral shall at all times be subject to the terms of this Agreement.
(d) The Senior Priority Representatives and the Senior Priority Secured Parties shall have no obligation whatsoever to the Second Priority Representatives or any Second Priority Secured Party to assure that any of the Pledged or Controlled Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Shared Collateral, except as expressly set forth in this Section 5.05. The duties or responsibilities of the Senior Priority Representatives (and after the Discharge of Senior Obligations, the Second Priority Representatives) under this Section 5.05 shall be limited solely to holding or controlling the Shared Collateral and the related Liens referred to in paragraphs (a) and (b) of this Section 5.05 as sub-agent and gratuitous bailee for the relevant Second Priority Representative for purposes of perfecting the Lien held by such Second Priority Representative.
(e) The Senior Priority Representatives shall not have by reason of the Second Priority Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Second Priority Representative or any Second Priority Secured Party, and each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby waives and releases the Senior Priority Representatives from all claims and liabilities arising pursuant to the Designated Senior Representatives roles under this Section 5.05 as sub-agents and gratuitous bailees with respect to the Shared Collateral.
(f) Upon the Discharge of Senior Obligations, each applicable Senior Priority Representative shall, at the Borrowers sole cost and expense, (i) (A) deliver to the Designated Second Priority Representative, to the extent that it is legally permitted to do so and as the Grantors or Designated Second Priority Representative may direct, all Shared Collateral, including all Proceeds thereof, held or controlled by such Senior Priority Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign to the Designated Second Priority Representative, to the extent that it is legally permitted to do so and as the Grantors or the Designated Second Priority Representative may direct, its rights under any landlord waiver or bailees letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, (B) if not legally permitted or no direction is given and if prior to discharge of the Second Priority Debt Obligations, deliver such Shared Collateral and assign its rights in respect thereof as a court of competent jurisdiction may otherwise direct or (C) if the Second Priority Debt Obligations have been discharged, deliver such Shared Collateral to the Grantors and terminate its rights therein as directed by the Grantors; (ii) notify any applicable insurance carrier that it is no longer entitled to be an additional loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (iii) notify any Governmental Authority involved in any condemnation or similar proceeding involving any Grantor that, subject to the rights of the Grantors under the Second Priority Debt Documents, the Designated Second Priority Representative is entitled to approve any awards granted in such proceeding. Upon the written
G-2-23
request of the Designated Second Priority Representative, the Borrower shall take such further action as is reasonably required to effectuate the transfer contemplated hereby. The Senior Priority Representatives have no obligations to follow instructions from any Second Priority Representative or any other Second Priority Secured Party in contravention of this Agreement. No Senior Priority Representative shall have any liability to any Second Priority Secured Party.
(g) None of the Senior Priority Representatives nor any of the other Senior Priority Secured Parties shall be required to marshal any present or future collateral security for any obligations of the Borrower or any Subsidiary to any Senior Priority Representative or any Senior Priority Secured Party under the Senior Priority Debt Documents or any assurance of payment in respect thereof, or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.
SECTION 5.06. When Discharge of Senior Obligations Deemed To Not Have Occurred. If, at any time substantially concurrently with or after the Discharge of Senior Obligations has occurred, the Borrower or any Subsidiary consummates any Refinancing or incurs any Senior Obligations (other than in respect of the payment of indemnities surviving the Discharge of Senior Obligations), then such Discharge of Senior Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Obligations) and the applicable agreement governing such Senior Obligations shall automatically be treated as a Senior Priority Debt Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein and the agent, representative or trustee for the holders of such Senior Obligations shall be the Senior Priority Representative for all purposes of this Agreement; provided that such Senior Priority Representative shall have become a party to this Agreement pursuant to Section 8.09. Upon receipt of notice of such incurrence (including the identity of the new Senior Priority Representative), each Second Priority Representative (including the Designated Second Priority Representative) shall promptly (a) enter into such documents and agreements (at the expense of the Borrower), including amendments, supplements or modifications to this Agreement, as the Borrower or such new Senior Priority Representative shall reasonably request in writing in order to provide the new Senior Priority Representative the rights of a Senior Priority Representative contemplated hereby and (b) deliver to such Senior Priority Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all Proceeds thereof, held or controlled by such Second Priority Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign to such Senior Priority Representative, to the extent that it is legally permitted to do so, its rights under any landlord waiver or bailees letter or any similar agreement or arrangement granting it rights or access to Shared Collateral.
SECTION 5.07. Purchase Right. Without prejudice to the enforcement of the Senior Priority Secured Parties remedies, the Senior Priority Secured Parties agree that following (a) the acceleration of all of the Senior Obligations in accordance with the terms of the applicable Senior Priority Debt Documents governing the terms thereof or (b) the commencement of
G-2-24
an Insolvency or Liquidation Proceeding (each, a Purchase Event ), within thirty (30) days of the Purchase Event, one or more of the Second Priority Secured Parties may request, and such Senior Priority Secured Parties hereby offer the Second Priority Secured Parties the option, to purchase all, but not less than all, of the aggregate amount of outstanding Senior Obligations outstanding at the time of purchase at par, plus any premium that would be applicable upon prepayment of such Senior Obligations and accrued and unpaid interest, fees, and expenses without warranty or representation or recourse (except, in the case of the First Lien Credit Agreement Obligations, for representations and warranties required to be made by assigning lenders pursuant to the Assignment and Assumption (as such term is defined in the First Lien Credit Agreement)). If such right is exercised, the parties shall endeavor to close promptly thereafter but in any event within thirty (30) days of the request. If one or more of the Second Priority Secured Parties exercise such purchase right, the documentation relating thereto shall be mutually acceptable to each of the Senior Priority Representatives and the applicable Second Priority Representative(s) named as a Representative for such exercising Second Priority Secured Parties. If none of the Second Priority Secured Parties timely exercise such right, the Senior Priority Secured Parties shall have no further obligations pursuant to this Section 5.07 for such Purchase Event and may take any further actions in their sole discretion in accordance with the Senior Priority Debt Documents and this Agreement.
ARTICLE 6
I NSOLVENCY O R L IQUIDATION P ROCEEDINGS
SECTION 6.01. Financing and Sale Issues. Until the Discharge of Senior Obligations has occurred, if the Borrower or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding, then each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that (A) if any Senior Priority Representative shall desire to consent (or not object) to the sale, use or lease of cash or other collateral or to consent (or not object) to the Borrowers or any other Grantors obtaining financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law ( DIP Financing ), it will raise no objection to and will not otherwise contest such sale, use or lease of such cash or other collateral or such DIP Financing and, except to the extent permitted by the proviso in clause (ii) of Section 3.01(a) and Section 6.03, will not request adequate protection or any other relief in connection therewith and, to the extent the Liens securing any Senior Obligations are subordinated to or have the same priority as the Liens securing such DIP Financing, will subordinate (and will be deemed hereunder to have subordinated) its Liens in the Shared Collateral to (x) such DIP Financing (and all obligations relating thereto) on the same basis as the Liens securing the Second Priority Debt Obligations are so subordinated to Liens securing Senior Obligations under this Agreement, (y) any carve-out for professional and United States Trustee fees agreed to by the Senior Priority Representatives, and (z) all adequate protection liens granted to the Senior Priority Secured Parties, (B) it will raise no objection to and will not otherwise contest any motion for relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceedings or from any injunction against foreclosure or enforcement in respect of Senior Obligations or the Senior Priority Collateral made by any Senior Priority Representative or any other Senior Priority Secured Party, (C) it will raise no objection to and will not otherwise contest any lawful exercise by any Senior Priority Secured Party of the right to credit bid Senior Obligations at any foreclosure or other sale of Senior Priority Collateral, including pursuant to Section 363(k) of the Bankruptcy Code or any similar
G-2-25
provision of any other Bankruptcy Law or other applicable law, (D) it will raise no objection to and will not otherwise contest any other request for judicial relief made in any court by any Senior Priority Secured Party relating to the lawful enforcement of any Lien on Senior Priority Collateral, (E) it will raise no objection to and will not otherwise contest any election made by any Senior Priority Representative or any other Senior Priority Secured Party of the application of Section 1111(b) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Shared Collateral, and (F) it will raise no objection to and will not otherwise contest or oppose any Disposition (including pursuant to Section 363 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law) of assets of any Grantor for or to which any Senior Priority Representative has consented or not objected that provides, to the extent such Disposition is to be free and clear of Liens, that the Liens securing the Senior Obligations and the Second Priority Debt Obligations will attach to the Proceeds of the sale on the same basis of priority as the Liens on the Shared Collateral securing the Senior Obligations rank to the Liens on the Shared Collateral securing the Second Priority Debt Obligations pursuant to this Agreement; provided that the Second Priority Secured Parties are not deemed to have waived any rights to credit bid on the Shared Collateral in any such sale or disposition in accordance with Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Bankruptcy Law), so long as any such credit bid provides for the payment in full in cash of the Senior Obligations. Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that notice received three Business Days prior to the entry of an order approving any usage of cash or other collateral described in this Section 6.01 or approving any DIP Financing described in this Section 6.01 shall be adequate notice.
SECTION 6.02. Relief from the Automatic Stay. Until the Discharge of Senior Obligations has occurred, each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding or take any action in derogation thereof, in each case in respect of any Shared Collateral, without the prior written consent of the Designated Senior Representative.
SECTION 6.03. Adequate Protection. Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, agrees that none of them shall object to, contest or support any other Person objecting to or contesting (a) any request by any Senior Priority Representative or any Senior Priority Secured Parties for adequate protection in any form, (b) any objection by any Senior Priority Representative or any Senior Priority Secured Parties to any motion, relief, action or proceeding based on any Senior Priority Representatives or Senior Priority Secured Partys claiming a lack of adequate protection or (c) the allowance and/or payment of pre- and/or post-petition interest, fees, expenses or other amounts of any Senior Priority Representative or any other Senior Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law (as adequate protection or otherwise). Notwithstanding anything contained in this Section 6.03 or in Section 6.01, in any Insolvency or Liquidation Proceeding, (i) if the Senior Priority Secured Parties (or any subset thereof) are granted adequate protection in the form of a Lien on additional or replacement collateral and/or superpriority claims in connection with any DIP Financing or use of cash collateral under Section 363 or 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, then each Second Priority Representative,
G-2-26
for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, may seek or request adequate protection in the form of a Lien on such additional or replacement collateral and/or a superpriority claim (as applicable), which Lien and/or superpriority claim (as applicable) is subordinated to the Liens securing, and claims with respect to, all Senior Obligations and such DIP Financing (and all obligations relating thereto) and any other Liens or claims granted to the Senior Priority Secured Parties as adequate protection, on the same basis as the other Liens securing, and claims with respect to, the Second Priority Debt Obligations are so subordinated to the Liens securing, and claims with respect to, Senior Obligations under this Agreement and (ii) in the event any Second Priority Representatives, for themselves and on behalf of the Second Priority Secured Parties under their Second Priority Debt Facilities, seek or request adequate protection and such adequate protection is granted (in each instance, to the extent such grant is otherwise permissible under the terms and conditions of this Agreement) in the form of a Lien on additional or replacement collateral and/or a superpriority claim, then such Second Priority Representatives, for themselves and on behalf of each Second Priority Secured Party under their Second Priority Debt Facilities, agree that each Senior Priority Representative shall also be granted a senior Lien on such additional or replacement collateral as security and adequate protection for the Senior Obligations and any such DIP Financing and/or a superpriority claim (as applicable) and that any Lien on such additional or replacement collateral securing or providing adequate protection for the Second Priority Debt Obligations and/or superpriority claim (as applicable) shall be subordinated to the Liens on such collateral securing, and claims with respect to, the Senior Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens or claims granted to the Senior Priority Secured Parties as adequate protection on the same basis as the other Liens securing, and claims with respect to, the Second Priority Debt Obligations are so subordinated to such Liens securing, and claims with respect to, Senior Obligations under this Agreement. Without limiting the generality of the foregoing, to the extent that the Senior Priority Secured Parties are granted adequate protection in the form of payments in the amount of current post-petition fees and expenses, and/or other cash payments, then the Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, shall not be prohibited from seeking adequate protection in the form of payments in the amount of current post-petition incurred fees and expenses, and/or other cash payments (as applicable), subject to the right of the Senior Priority Secured Parties to object to the amounts of fees and expenses or other cash payments so sought by the Second Priority Secured Parties.
SECTION 6.04. Preference Issues. If any Senior Priority Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to disgorge, turn over or otherwise pay any amount to the estate of the Borrower or any other Grantor (or any trustee, receiver or similar Person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason (any such amount, a Recovery ), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Priority Secured Parties shall be entitled to the benefits of this Agreement until a Discharge of Senior Obligations with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its
G-2-27
Second Priority Debt Facility, hereby agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.
SECTION 6.05. Separate Grants of Security and Separate Classifications. Each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, acknowledges and agrees that (a) the grants of Liens pursuant to the Senior Priority Collateral Documents and the Second Priority Collateral Documents constitute separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Shared Collateral, the Second Priority Debt Obligations are fundamentally different from the Senior Obligations and must be separately classified in any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement or restructuring proposed, confirmed, or adopted in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that any claims of the Senior Priority Secured Parties and the Second Priority Secured Parties in respect of the Shared Collateral constitute a single class of claims (rather than separate classes of senior and junior secured claims), then each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby acknowledges and agrees that all distributions from the Shared Collateral shall be made as if there were separate classes of senior and junior secured claims against the Grantors in respect of the Shared Collateral (with the effect being that, to the extent that the aggregate value of the Shared Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Secured Parties), the Senior Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest, fees, and expenses, and other claims, all amounts owing in respect of post-petition interest, fees, and expenses (whether or not allowed or allowable under Section 506(b) of the Bankruptcy Code (or any similar provision of any other Bankruptcy Law) or otherwise in such Insolvency or Liquidation Proceeding) before any distribution from the Shared Collateral is made in respect of the Second Priority Debt Obligations, with each Second Priority Representative, for itself and on behalf of each Second Priority Secured Party under its Second Priority Debt Facility, hereby acknowledging and agreeing to turn over to the Designated Senior Representative amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Priority Secured Parties.
SECTION 6.06. No Waivers of Rights of Senior Priority Secured Parties. Nothing contained herein shall, except as expressly provided herein, prohibit or in any way limit any Senior Priority Representative or any other Senior Priority Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Second Priority Secured Party, including the seeking by any Second Priority Secured Party of adequate protection or the asserting by any Second Priority Secured Party of any of its rights and remedies under the Second Priority Debt Documents or otherwise.
G-2-28
SECTION 6.07. Application. This Agreement, which the parties hereto expressly acknowledge is a subordination agreement under Section 510(a) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be effective before, during and after the commencement of any Insolvency or Liquidation Proceeding. The relative rights as to the Shared Collateral and Proceeds thereof shall continue after the commencement of any Insolvency or Liquidation Proceeding on the same basis as prior to the date of the petition therefor, subject to any court order approving the financing of, or use of cash collateral by, any Grantor. All references herein to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor.
SECTION 6.08. Other Matters. To the extent that any Second Priority Representative or any Second Priority Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Shared Collateral, such Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, agrees not to assert any such rights without the prior written consent of each Senior Priority Representative, provided that if requested by any Senior Priority Representative, such Second Priority Representative shall timely exercise such rights in the manner requested by the Senior Priority Representatives (acting unanimously), including any rights to payments in respect of such rights.
SECTION 6.09. 506(c) Claims. Until the Discharge of Senior Obligations has occurred, each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, agrees that it will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law senior to or on a parity with the Liens securing the Senior Obligations for costs or expenses of preserving or disposing of any Shared Collateral.
SECTION 6.10. Reorganization Securities; Voting.
(a) If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement or restructuring proposed, confirmed, or adopted in an Insolvency or Liquidation Proceeding, on account of both the Senior Obligations and the Second Priority Debt Obligations, then, to the extent the debt obligations distributed on account of the Senior Obligations and on account of the Second Priority Debt Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
(b) No Second Priority Secured Party (whether in the capacity of a secured creditor or an unsecured creditor) shall propose, vote in favor of, or otherwise directly or indirectly support any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement or restructuring that is inconsistent with the priorities or other provisions of this Agreement. Without limiting the generality of the foregoing, other than with the prior written consent of the Designated Senior Representative, no Second Priority Secured Party (whether in the capacity of a secured creditor or an unsecured creditor) shall vote in favor
G-2-29
of any plan unless such plan (i) satisfies the Senior Obligations in full in cash or (ii) is proposed or supported by the number of Senior Priority Secured Parties required under Section 1126(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law.
SECTION 6.11. Post-Petition Interest.
(b) Neither any Second Priority Representative nor any other Second Priority Secured Party shall oppose or seek to challenge any claim by any Senior Priority Representative or any other Senior Priority Secured Party for allowance in any Insolvency or Liquidation Proceeding of Senior Obligations consisting of claims for post-petition interest, fees, or expenses under Section 506(b) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law or otherwise.
(c) No Senior Priority Representative nor any other Senior Priority Secured Party shall oppose or seek to challenge any claim by any Second Priority Representative or any other Second Priority Secured Party for allowance in any Insolvency or Liquidation Proceeding of Second Priority Debt Obligations consisting of claims for post-petition interest, fees, or expenses under Section 506(b) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law or otherwise, to the extent of the value of the Lien of the Second Priority Representatives on behalf of the Second Priority Secured Parties on the Shared Collateral (after taking into account the Senior Obligations).
ARTICLE 7
R ELIANCE ; ETC .
SECTION 7.01. Reliance. The consent by the Senior Priority Secured Parties to the execution and delivery of the Second Priority Debt Documents to which the Senior Priority Secured Parties have consented and all loans and other extensions of credit made or deemed made on and after the date hereof by the Senior Priority Secured Parties to the Borrower or any Subsidiary shall be deemed to have been given and made in reliance upon this Agreement. Each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, acknowledges that it and such Second Priority Secured Parties have, independently and without reliance on any Senior Priority Representative or other Senior Priority Secured Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Second Priority Debt Documents to which they are party or by which they are bound, this Agreement and the transactions contemplated hereby and thereby, and they will continue to make their own credit decision in taking or not taking any action under the Second Priority Debt Documents or this Agreement.
SECTION 7.02. No Warranties or Liability. Each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, acknowledges and agrees that neither any Senior Priority Representative nor any other Senior Priority Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Senior Priority Debt Documents, the ownership of any Shared Collateral or the perfection or priority of any Liens thereon. The Senior Priority Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Senior Priority
G-2-30
Debt Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Senior Priority Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that the Second Priority Representatives and the Second Priority Secured Parties have in the Shared Collateral or otherwise, except as otherwise provided in this Agreement. Neither any Senior Priority Representative nor any other Senior Priority Secured Party shall have any duty to any Second Priority Representative or Second Priority Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreement with the Borrower or any other Subsidiary (including the Second Priority Debt Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectibility of any of the Senior Obligations, the Second Priority Debt Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) any Grantors title to or right to transfer any of the Shared Collateral or (c) any other matter except as expressly set forth in this Agreement.
SECTION 7.03. Obligations Unconditional. All rights, interests, agreements and obligations of the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Senior Priority Debt Document or any Second Priority Debt Document;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Second Priority Debt Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of the First Lien Credit Agreement or any other Senior Priority Debt Document or of the terms of any Second Priority Debt Document;
(c) any exchange of any security interest in any Shared Collateral or any other collateral or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Second Priority Debt Obligations or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Borrower or any other Grantor; or
(e) any other circumstances that otherwise might constitute a defense available to, or a discharge of, (i) the Borrower or any other Grantor in respect of the Senior Obligations (other than the Discharge of Senior Obligations subject to Sections 5.06 and 6.04 hereof) or (ii) any Second Priority Representative or Second Priority Secured Party in respect of this Agreement.
G-2-31
ARTICLE 8
M ISCELLANEOUS
SECTION 8.01. Conflicts. Subject to Section 8.18, in the event of any conflict between the provisions of this Agreement and the provisions of any Senior Priority Debt Document or any Second Priority Debt Document, the provisions of this Agreement shall govern. Notwithstanding the foregoing, the relative rights and obligations of the Senior Priority Representatives and the Senior Priority Secured Parties (as amongst themselves) with respect to any Senior Priority Collateral shall be governed by the terms of the Permitted Pari Passu Intercreditor Agreement and in the event of any conflict between the Permitted Pari Passu Intercreditor Agreement and this Agreement, the provisions of the Permitted Pari Passu Intercreditor Agreement shall control.
SECTION 8.02. Continuing Nature of This Agreement; Severability. Subject to Section 6.04, this Agreement shall continue to be effective until the Discharge of Senior Obligations shall have occurred. This is a continuing agreement of Lien subordination, and the Senior Priority Secured Parties may continue, at any time and without notice to the Second Priority Representatives or any Second Priority Secured Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Borrower or any other Subsidiary constituting Senior Obligations in reliance hereon. The terms of this Agreement shall survive and continue in full force and effect in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8.03. Amendments; Waivers.
(a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
(b) This Agreement may be amended in writing signed by each Representative (in each case, acting in accordance with the documents governing the applicable Debt Facility); provided that any such amendment, supplement or waiver which by the terms of this Agreement requires the Borrowers consent or which increases or could reasonably be expected to increase the obligations or reduces or could reasonably be expected to reduce the rights of, imposes
G-2-32
additional duties on, or otherwise adversely affects the Borrower or any other Grantor, shall require the consent of the Borrower. Any such amendment, supplement or waiver shall be in writing and shall be binding upon the Senior Priority Secured Parties and the Second Priority Secured Parties and their respective permitted successors and assigns.
(c) Notwithstanding the foregoing, without the consent of any Secured Party, any Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 8.09 and, upon such execution and delivery, such Representative and the Secured Parties and Senior Obligations or Second Priority Debt Obligations of the Debt Facility for which such Representative is acting shall be subject to the terms hereof.
SECTION 8.04. Information Concerning Financial Condition of the Borrower and its Subsidiaries. The Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Borrower and its Subsidiaries and all endorsers or guarantors of the Senior Obligations or the Second Priority Debt Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Obligations or the Second Priority Debt Obligations. The Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that any Senior Priority Representative, any Senior Priority Secured Party, any Second Priority Representative or any Second Priority Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it shall be under no obligation to (i) make, and the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties shall not make or be deemed to have made, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (ii) provide any additional information or to provide any such information on any subsequent occasion, (iii) undertake any investigation or (iv) disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
SECTION 8.05. Subrogation. Each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Senior Obligations has occurred.
SECTION 8.06. Application of Payments. Except as otherwise provided herein, all payments received by the Senior Priority Secured Parties may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Priority Secured Parties, in their sole discretion, deem appropriate, consistent with the terms of the Senior Priority Debt Documents. Except as otherwise provided herein, each Second Priority Representative, on behalf of itself and each Second Priority Secured Party under its Second Priority Debt Facility, assents to any such extension or postponement of the time of payment of the Senior Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Senior Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.
G-2-33
SECTION 8.07. Additional Grantors. The Borrower agrees that if any Subsidiary of the Borrower shall become a Grantor after the date hereof, it will promptly cause such Subsidiary to acknowledge and agree to this Agreement by executing and delivering a joinder in form and substance reasonably satisfactory to the Designated Senior Representative and the Designated Second Priority Representative. Whether or not such instrument is executed and delivered, such Subsidiary shall be bound as a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of such instrument shall not require the consent of any other party hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
SECTION 8.08. Dealings with Grantors. Upon any application or demand by the Borrower or any other Grantor to any Representative to take or permit any action under any of the provisions of this Agreement, if requested in writing by such Representative, the Borrower shall furnish to such Representative a certificate of a duly authorized officer of the Borrower (an Officers Certificate ) stating that all conditions precedent, if any, provided for in this Agreement, as the case may be, relating to the proposed action have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or demand, no additional certificate or opinion need be furnished.
SECTION 8.09. Additional Debt Facilities.
(a) To the extent, but only to the extent, permitted by the provisions of the Senior Priority Debt Documents and the Second Priority Debt Documents then in effect, the Borrower or any other Grantor may incur or issue and sell one or more series or classes of Additional Second Priority Debt and one or more series or classes of Additional Senior Priority Debt. Any such additional class or series of Additional Second Priority Debt (the Second Priority Class Debt ) may be secured by a junior priority, subordinated Lien on Shared Collateral, in each case under and pursuant to the relevant Second Priority Collateral Documents for such Second Priority Class Debt, if and subject to the condition that the Representative of any such Second Priority Class Debt (each, a Second Priority Class Debt Representative ), acting on behalf of the holders of such Second Priority Class Debt (such Representative and holders in respect of any Second Priority Class Debt being referred to as the Second Priority Class Debt Parties ), becomes a party to this Agreement by satisfying conditions (i) through (iii), as applicable, of the immediately succeeding paragraph, and Section 8.09(b). Any such additional class or series of Senior Priority Debt Facilities (the Senior Priority Class Debt ; and the Senior Priority Class Debt and Second Priority Class Debt, collectively, the Class Debt ) may be secured by a senior Lien on Shared Collateral, in each case under and pursuant to the Senior Priority Collateral Documents, if and subject to the condition that the Representative of any such Senior Priority Class Debt (each, a Senior Priority Class Debt Representative ; and the Senior Priority Class Debt Representatives and Second Priority Class Debt Representatives, collectively, the Class Debt Representatives ), acting on behalf of the holders of such Senior Priority Class Debt (such Representative and holders in respect of any such Senior Priority Class Debt being referred to as the
G-2-34
Senior Priority Class Debt Parties ; and the Senior Priority Class Debt Parties and Second Priority Class Debt Parties, collectively, the Class Debt Parties ), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (iii), as applicable, of the immediately succeeding paragraph, and Section 8.09(b). In order for a Class Debt Representative to become a party to this Agreement:
(i) such Class Debt Representative shall have executed and delivered a Joinder Agreement substantially in the form of Annex I (if such Representative is a Second Priority Class Debt Representative) or Annex II (if such Representative is a Senior Priority Class Debt Representative) (with such changes as may be reasonably approved by the Designated Senior Representative, such Class Debt Representative, and the Borrower) pursuant to which it becomes a Representative hereunder, and the Class Debt in respect of which such Class Debt Representative is the Representative and the related Class Debt Parties become subject hereto and bound hereby;
(ii) the Borrower shall have delivered to the Designated Senior Representative an Officers Certificate stating that the conditions set forth in this Section 8.09 are satisfied with respect to such Class Debt and, if requested, true and complete copies of each of the Second Priority Debt Documents or Senior Priority Debt Documents, as applicable, relating to such Class Debt, certified as being true and correct by an Responsible Officer of the Borrower on behalf of the relevant Grantor and identifying the obligations to be designated as Additional Senior Priority Debt or Additional Second Priority Debt, as applicable, and certifying that such obligations are permitted to be incurred and secured (I) in the case of Additional Senior Priority Debt, on a senior basis under each of the Senior Priority Debt Documents and Second Priority Debt Documents and (II) in the case of Additional Second Priority Debt, on a junior basis under each of the Senior Priority Debt Documents and Second Priority Debt Documents; and
(iii) the Second Priority Debt Documents or Senior Priority Debt Documents, as applicable, relating to such Class Debt shall provide, or shall be amended on terms and conditions reasonably approved by the Designated Senior Representative and such Class Debt Representative, that each Class Debt Party with respect to such Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Class Debt.
(b) With respect to any Class Debt that is issued or incurred after the Closing Date, the Borrower and each of the other Grantors agrees that the Borrower will take, as applicable, such actions (if any) as may from time to time reasonably be requested in writing by any Senior Priority Representative or any Second Priority Representative, and enter into such technical amendments, modifications and/or supplements to the then existing Collateral Documents (or execute and deliver such additional Collateral Documents) as may from time to time be reasonably requested by such Persons, to ensure that the Class Debt is secured by, and entitled to the benefits of, the relevant Collateral Documents relating to such Class Debt, and each Secured Party (by its acceptance of the benefits hereof) hereby agrees to, and authorizes each applicable Designated Senior Representative and each applicable Second Priority Representative, as the case may be, to enter into, any such technical amendments, modifications and/or supplements (and additional Collateral Documents).
G-2-35
SECTION 8.10. Consent to Jurisdiction; Waivers. Each Representative, on behalf of itself and the Secured Parties of the Debt Facility for which it is acting, irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the Collateral Documents, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in New York City in the borough of Manhattan, the courts of the United States District Court of the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same and agrees not to commence or support any such action or proceeding in any other jurisdiction;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Representative) at the address referred to in Section 8.11;
(d) agrees that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any other manner permitted by Law; and
(e) waives, to the maximum extent not prohibited by Law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.10 any special, exemplary, punitive or consequential damages.
SECTION 8.11. Notices. All notices, requests, demands and other communications provided for or permitted hereunder shall be in writing and shall be sent:
(i) if to the Borrower, to it at:
c/o Lamb Weston Holdings, Inc.
599 S. Rivershore Lane
Eagle, Idaho 83616
Attention: Eryk J. Spytek
Email: eryk.spytek@conagra.com
with a copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, NY 10281
Attention: Charles N. Bensinger III
Facsimile: 1-212-755-7306
Email: cnbensinger@jonesday.com
G-2-36
(ii) if to the First Lien Collateral Agent, to it at:
Bank of America, N.A.
[ ] 1
(iii) if to the Initial Second Lien Representative, to it at:
[ ]
(iv) if to any other Representative, to it at the address specified by it in the Joinder Agreement delivered by it pursuant to Section 8.09.
Unless otherwise specifically provided herein, 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 fax or on the date five 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 8.11 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 8.11. Notices and other communications may also be delivered by e-mail to the email address of a representative of the applicable Person provided from time to time by such Person.
SECTION 8.12. Further Assurances. Each Senior Priority Representative, on behalf of itself and each Senior Priority Secured Party under the Senior Priority Debt Facility for which it is acting, each Second Priority Representative, on behalf of itself, and each Second Priority Secured Party under its Second Priority Debt Facility, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.
SECTION 8.13. Governing Law; Waiver of Jury Trial.
(A) THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
1 |
To be provided by BOA//Cahill |
G-2-37
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.14. Binding on Successors and Assigns. This Agreement shall be binding upon the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives, the Second Priority Secured Parties, the Borrower and their respective permitted successors and assigns.
SECTION 8.15. Section Titles. The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.
SECTION 8.16. Counterparts. This Agreement may be executed in one or more counterparts, including by means of facsimile or other electronic method, each of which shall be an original and all of which shall together constitute one and the same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
SECTION 8.17. Authorization. By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The First Lien Collateral Agent represents and warrants that this Agreement is binding upon the First Lien Credit Agreement Secured Parties. The Initial Second Lien Representative represents and warrants that this Agreement is binding upon the Initial Second Priority Debt Secured Parties.
SECTION 8.18. No Third Party Beneficiaries; Successors and Assigns. The lien priorities set forth in this Agreement and the rights and benefits hereunder in respect of such lien priorities shall inure solely to the benefit of the Senior Priority Representatives, the Senior Priority Secured Parties, the Second Priority Representatives and the Second Priority Secured Parties, and their respective permitted successors and assigns, and no other Person (including the Grantors, or any trustee, receiver, debtor in possession or bankruptcy estate in a bankruptcy or like proceeding) shall have or be entitled to assert such rights; provided , however , that the Grantors will be entitled to assert such rights with respect to Sections 2.02, 3.03, 5.01(d), 5.02, 5.03(b), 5.05(f), 6.07, 8.03(b), 8.08 and 8.09.
SECTION 8.19. Effectiveness. This Agreement shall become effective when executed and delivered by the parties hereto.
G-2-38
SECTION 8.20. Administrative Agent and Representative. It is understood and agreed that (a) the First Lien Collateral Agent is entering into this Agreement in its capacity as administrative agent and collateral agent under the First Lien Credit Agreement and the provisions of Article X of the First Lien Credit Agreement applicable to the Administrative Agent (as defined therein) thereunder shall also apply to the First Lien Collateral Agent hereunder, (b) the Initial Second Lien Representative is entering into this Agreement in its capacity as [trustee] [administrative agent] [and collateral agent] under the Initial Second Lien Debt Agreement and the provisions of [ ] of the Initial Second Lien Debt Agreement applicable to the [Administrative Agent] [Trustee] (as defined therein) thereunder shall also apply to the Initial Second Lien Representative hereunder and (c) each other Representative party hereto is entering into this Agreement in its capacity as trustee or agent for the secured parties referenced in the applicable Additional Senior Priority Debt Document or Additional Second Priority Debt Document (as applicable) and the corresponding exculpatory and liability-limiting provisions of such agreement applicable to such Representative thereunder shall also apply to such Representative hereunder.
SECTION 8.21. Survival of Agreement. All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
SECTION 8.22. [Reserved]
SECTION 8.23. Borrower. The Borrower agrees to act hereunder on behalf of all Grantors and agrees that this Agreement shall be binding on such Grantors and their successors and assigns as if they were a party hereto.
[ SIGNATURE PAGES FOLLOW ]
G-2-39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BANK OF AMERICA, N.A., as First Lien Collateral Agent | ||
By: |
|
|
Name: | ||
Title: | ||
[ ], as Initial Second Lien Representative | ||
By: |
|
|
Name: | ||
Title: |
Acknowledged and Agreed by: | ||
LAMB WESTON HOLDINGS, INC., as Borrower | ||
By: |
|
|
Name: | ||
Title: |
[SIGNATURE PAGE TO JUNIOR PRIORITY
INTERCREDITOR AGREEMENT]
ANNEX I
[FORM OF] SUPPLEMENT NO. [ ] (this Representative Supplement ) dated as of [ ], 20[ ] to the JUNIOR PRIORITY INTERCREDITOR AGREEMENT dated as of [ ], 20[ ] (the Junior Priority Intercreditor Agreement ), among BANK OF AMERICA, N.A. ( Bank of America ) as Representative for the First Lien Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the First Lien Collateral Agent ), [ ], as Representative for the Initial Second Priority Debt Secured Parties (in such capacity and together with its successors in such capacity, the Initial Second Lien Representative ), and each additional Senior Priority Representative and Second Priority Representative that from time to time becomes a party thereto pursuant to Section 8.09 of the Junior Priority Intercreditor Agreement, and acknowledged and agreed by LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ).
A. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Junior Priority Intercreditor Agreement.
B. As a condition to the ability of the Borrower or any other Grantor to incur Second Priority Class Debt after the date of the Junior Priority Intercreditor Agreement and to secure such Second Priority Class Debt with the Second Priority Lien and to have such Second Priority Class Debt guaranteed by the Grantors on a subordinated basis, in each case under and pursuant to the Second Priority Collateral Documents, the Second Priority Class Debt Representative in respect of such Second Priority Class Debt is required to become a Representative under, and such Second Priority Class Debt and the Second Priority Class Debt Parties in respect thereof are required to become subject to and bound by, the Junior Priority Intercreditor Agreement. Section 8.09 of the Junior Priority Intercreditor Agreement provides that such Second Priority Class Debt Representative may become a Representative under, and such Second Priority Class Debt and such Second Priority Class Debt Parties may become subject to and bound by, the Junior Priority Intercreditor Agreement, pursuant to the execution and delivery by the Second Priority Class Debt Representative of an instrument in the form of this Representative Supplement and the satisfaction of the other conditions set forth in Section 8.09 of the Junior Priority Intercreditor Agreement. The undersigned Second Priority Class Debt Representative (the New Representative ) is executing this Representative Supplement in accordance with the requirements of the Senior Priority Debt Documents and the Second Priority Debt Documents.
Accordingly, the Designated Senior Representative and the New Representative agree as follows:
SECTION 1. In accordance with Section 8.09 of the Junior Priority Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Second Priority Class Debt and Second Priority Class Debt Parties become subject to and bound by, the Junior Priority Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Second Priority Class Debt Parties, hereby agrees to all the terms and provisions of the Junior Priority Intercreditor Agreement applicable to it as a Second Priority Representative and to the Second Priority Class Debt Parties that it represents as Second Priority Secured Parties. Each reference to a Representative or Second Priority Representative in the Junior Priority Intercreditor Agreement shall be deemed to include the New Representative. The Junior Priority Intercreditor Agreement is hereby incorporated herein by reference.
A-II-1
SECTION 2. The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Representative Supplement, in its capacity as [agent] [trustee] under [describe debt facility], (ii) this Representative Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Second Priority Debt Documents relating to such Second Priority Class Debt provide that, upon the New Representatives entry into this Agreement, the Second Priority Class Debt Parties in respect of such Second Priority Class Debt will be subject to and bound by the provisions of the Junior Priority Intercreditor Agreement as Second Priority Secured Parties.
SECTION 3. This Representative Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Representative Supplement shall become effective when the Designated Senior Representative shall have received a counterpart of this Representative Supplement that bears the signature of the New Representative. Delivery of an executed signature page to this Representative Supplement by facsimile transmission or other electronic method shall be effective as delivery of a manually signed counterpart of this Representative Supplement.
SECTION 4. Except as expressly supplemented hereby, the Junior Priority Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Representative Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Junior Priority Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Junior Priority Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
SECTION 8. The Borrower agrees to reimburse the Designated Senior Representative, in accordance with the terms of the applicable Senior Priority Debt Document, for its reasonable out-of-pocket expenses in connection with this Representative Supplement, including, to the extent included in the applicable Senior Priority Debt Document, the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative.
[SIGNATURE PAGES FOLLOW]
A-II-2
IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Representative Supplement to the Junior Priority Intercreditor Agreement as of the day and year first above written.
[NAME OF NEW REPRESENTATIVE], |
as [ ] for the holders of [ ], |
By: |
Name: |
Title: |
Address for notices: |
|
attention of: |
Telecopy: |
[ ], |
as Designated Senior Representative, |
By: |
Name: |
Title: |
A-II-3
Acknowledged by: | ||
[ ] | ||
By: |
|
|
Name: | ||
Title: | ||
[ ] | ||
By: |
|
|
Name: | ||
Title: | ||
LAMB WESTON HOLDINGS, INC., | ||
as Borrower | ||
By: |
|
|
Name: | ||
Title: |
A-II-4
ANNEX II
[FORM OF] SUPPLEMENT NO. [ ] (this Representative Supplement ) dated as of [ ], 20[ ] to the JUNIOR PRIORITY INTERCREDITOR AGREEMENT dated as of [ ], 20[ ] (the Junior Priority Intercreditor Agreement ), among BANK OF AMERICA, N.A. ( Bank of America ) as Representative for the First Lien Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the First Lien Collateral Agent ), [ ], as Representative for the Initial Second Priority Debt Secured Parties (in such capacity and together with its successors in such capacity, the Initial Second Lien Representative ), and each additional Senior Priority Representative and Second Priority Representative that from time to time becomes a party thereto pursuant to Section 8.09 of the Junior Priority Intercreditor Agreement, and acknowledged and agreed by LAMB WESTON HOLDINGS, INC., a Delaware corporation (the Borrower ).
A. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Junior Priority Intercreditor Agreement.
B. As a condition to the ability of the Borrower or any other Grantor to incur Senior Priority Class Debt after the date of the Junior Priority Intercreditor Agreement and to secure such Senior Priority Class Debt with the Senior Lien and to have such Senior Priority Class Debt guaranteed by the Grantors on a senior basis, in each case under and pursuant to the Senior Priority Collateral Documents, the Senior Priority Class Debt Representative in respect of such Senior Priority Class Debt is required to become a Representative under, and such Senior Priority Class Debt and the Senior Priority Class Debt Parties in respect thereof are required to become subject to and bound by, the Junior Priority Intercreditor Agreement. Section 8.09 of the Junior Priority Intercreditor Agreement provides that such Senior Priority Class Debt Representative may become a Representative under, and such Senior Priority Class Debt and such Senior Priority Class Debt Parties may become subject to and bound by, the Junior Priority Intercreditor Agreement, pursuant to the execution and delivery by the Senior Priority Class Debt Representative of an instrument in the form of this Representative Supplement and the satisfaction of the other conditions set forth in Section 8.09 of the Junior Priority Intercreditor Agreement. The undersigned Senior Priority Class Debt Representative (the New Representative ) is executing this Representative Supplement in accordance with the requirements of the Senior Priority Debt Documents and the Second Priority Debt Documents.
Accordingly, the Designated Senior Representative and the New Representative agree as follows:
SECTION 1. In accordance with Section 8.09 of the Junior Priority Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Senior Priority Class Debt and Senior Priority Class Debt Parties become subject to and bound by, the Junior Priority Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Senior Priority Class Debt Parties, hereby agrees to all the terms and provisions of the Junior Priority Intercreditor Agreement applicable to it as a Senior
A-II-1
Priority Representative and to the Senior Priority Class Debt Parties that it represents as Senior Priority Secured Parties. Each reference to a Representative or Senior Priority Representative in the Junior Priority Intercreditor Agreement shall be deemed to include the New Representative. The Junior Priority Intercreditor Agreement is hereby incorporated herein by reference.
SECTION 2. The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Representative Supplement, in its capacity as [agent] [trustee] under [describe debt facility], (ii) this Representative Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Senior Priority Debt Documents relating to such Senior Priority Class Debt provide that, upon the New Representatives entry into this Agreement, the Senior Priority Class Debt Parties in respect of such Senior Priority Class Debt will be subject to and bound by the provisions of the Junior Priority Intercreditor Agreement as Senior Priority Secured Parties.
SECTION 3. This Representative Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Representative Supplement shall become effective when the Designated Senior Representative shall have received a counterpart of this Representative Supplement that bears the signature of the New Representative. Delivery of an executed signature page to this Representative Supplement by facsimile transmission or other electronic method shall be effective as delivery of a manually signed counterpart of this Representative Supplement.
SECTION 4. Except as expressly supplemented hereby, the Junior Priority Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Representative Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Junior Priority Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Junior Priority Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
A-II-2
SECTION 8. The Borrower agrees to reimburse the Designated Senior Representative, in accordance with the terms of the applicable Senior Priority Debt Document, for its reasonable out-of-pocket expenses in connection with this Representative Supplement, including, to the extent included in the applicable Senior Priority Debt Document, the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative.
[ SIGNATURE PAGES FOLLOW ]
A-II-3
IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Representative Supplement to the Junior Priority Intercreditor Agreement as of the day and year first above written.
[NAME OF NEW REPRESENTATIVE], |
as [ ] for the holders of [ ], |
By: |
Name: |
Title: |
Address for notices: |
|
attention of: |
Telecopy: |
[ ], |
as Designated Senior Representative, |
By: |
Name: |
Title: |
A-II-4
Acknowledged by: | ||
[ ] | ||
By: |
|
|
Name: | ||
Title: | ||
[ ] | ||
By: |
|
|
Name: | ||
Title: | ||
LAMB WESTON HOLDINGS, INC., | ||
as Borrower | ||
By: |
|
|
Name: | ||
Title: |
A-II-5
EXHIBIT H
[Form of]
Voting Participant Notification
TO: | Bank of America, N.A., as Administrative Agent, and Lamb Weston Holdings, Inc. | |
RE: | Credit Agreement, dated as of November 9, 2016 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the Credit Agreement), by and among Lamb Weston Holdings, Inc., a Delaware corporation (the Borrower), the Guarantors from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender. Unless otherwise defined herein, capitalized terms used in this Notice shall have the meanings set forth in the Credit Agreement. | |
DATE: | [Date] |
[Insert name of selling Lender] hereby notifies the Administrative Agent and the Borrower that [insert full name of purchasing Lender] is a Farm Credit Lender and is entitled to be accorded the rights of a Voting Participant under the Credit Agreement and, subject to receipt of any consents required by the Credit Agreement, shall be designated a Voting Participant. The amount of the participation or sub-participation purchased is $ .
The address of [insert full name of purchasing Lender] for purposes of all notices and other communications is , , Attention of , Facsimile No. .
Delivery of an executed counterpart of a signature page of this Certificate by fax transmission or other electronic mail transmission (e.g. pdf or tif) shall be effective as delivery of a manually executed counterpart of this Certificate.
[INSERT NAME OF SELLING LENDER] |
By: |
Name: |
Title: |
H-1
[INSERT NAME OF PURCHASING LENDER] |
By: |
Name: |
Title: |
H-2
[Consented to and] 1 Accepted:
BANK OF AMERICA, N.A., as |
Administrative Agent |
By: |
Name: |
Title: |
[Consented to:] 2
LAMB WESTON HOLDINGS, INC. |
By: |
Name: |
Title: |
1 | To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
2 | To be added only if the consent of the Borrower is required by the terms of the Credit Agreement. |
H-3