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Credit Agreement

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Title:

Credit Agreement

Entities:

Fresh Brands, Inc.; McGraw-Hill Companies Inc.; U.S. Bank, NA; Bank of New York; LaSalle Bank National Association; Fresh Brands Inc

Date:

2004

Size:

Preview shows 87KB of 244KB total

Price:

$95

ID:

#201990

► Loans ► Credit Agreements
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CREDIT AGREEMENT

dated as of March 18, 2003

among

FRESH BRANDS, INC.
as the Company

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,

LASALLE BANK NATIONAL ASSOCIATION,
as Administrative Agent and Co-Lead Arranger,

and

U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent and Co-Lead Arranger

TABLE OF CONTENTS

SECTION 1	DEFINITIONS	1
1.1	Definitions	1
1.2	Other Interpretive Provisions	19
SECTION 2	COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES	20
2.1	Commitments	20
	2.1.1 Revolving Loan Commitment	20
	2.1.2 L/C Commitment	20
2.2	Loan Procedures	20
	2.2.1 Various Types of Loans	20
	2.2.2 Borrowing Procedures	20
	2.2.3 Conversion and Continuation Procedures	21
2.3	Letter of Credit Procedures	22
	2.3.1 L/C Applications	22
	2.3.2 Participations in Letters of Credit	22
	2.3.3 Reimbursement Obligations	23
	2.3.4 Funding by Lenders to Issuing Lender	24
2.4	Commitments Several	24
2.5	Certain Conditions	24
SECTION 3	EVIDENCING OF LOANS	25
3.1	Notes	25
3.2	Recordkeeping	25
SECTION 4	INTEREST	25
4.1	Interest Rates	25
4.2	Interest Payment Dates	25
4.3	Setting and Notice of LIBOR Rates	25
4.4	Computation of Interest	26
SECTION 5	FEES	26
5.1	Non-Use Fee	26
5.2	Letter of Credit Fees	26
5.3	Administrative Agent's Fees	26
5.4	Underwriting Fee	27
5.5	Arrangement Fee	27

SECTION 6	REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS	27
6.1	Reduction or Termination of the Revolving Commitment	27
	6.1.1 Voluntary Reduction or Termination of the Revolving Commitment	27
	6.1.2 Mandatory Reductions of Revolving Commitment	27
	6.1.3 All Reductions of the Revolving Commitment	27
6.2	Prepayments	27
	6.2.1 Voluntary Prepayments	27
6.3	Manner of Prepayments	28
6.4	Repayments	28
SECTION 7	MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES	28
7.1	Making of Payments	28
7.2	Application of Certain Payments	29
7.3	Due Date Extension	29
7.4	Setoff	29
7.5	Proration of Payments	29
7.6	Taxes	30
SECTION 8	INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS	31
8.1	Increased Costs	31
8.2	Basis for Determining Interest Rate Inadequate or Unfair	32
8.3	Changes in Law Rendering LIBOR Loans Unlawful	33
8.4	Funding Losses	33
8.5	Right of Lenders to Fund through Other Offices	33
8.6	Discretion of Lenders as to Manner of Funding	33
8.7	Mitigation of Circumstances; Replacement of Lenders	34
8.8	Conclusiveness of Statements; Survival of Provisions	34
SECTION 9	REPRESENTATIONS AND WARRANTIES	34
9.1	Organization	35
9.2	Authorization; No Conflict	35
9.3	Validity and Binding Nature	35
9.4	Financial Condition	35

9.5	No Material Adverse Change	35
9.6	Litigation and Contingent Liabilities	35
9.7	Ownership of Properties; Liens	35
9.8	Equity Ownership; Subsidiaries	36
9.9	Pension Plans	36
9.10	Investment Company Act	37
9.11	Public Utility Holding Company Act	37
9.12	Regulation U	37
9.13	Taxes; Tax Shelter Registration	37
9.14	Solvency, etc.	37
9.15	Environmental Matters	38
9.16	Insurance	38
9.17	Real Property	38
9.18	Information	38
9.19	Intellectual Property	39
9.20	Burdensome Obligations	39
9.21	Labor Matters	39
9.22	No Default	39
SECTION 10	AFFIRMATIVE COVENANTS	39
10.1	Reports, Certificates and Other Information	39
	10.1.1 Annual Report	39
	10.1.2 Interim Reports	40
	10.1.3 Compliance Certificates	40
	10.1.4 Reports to the SEC and to Shareholders	40
	10.1.5 Notice of Default, Litigation and ERISA Matters	40
	10.1.6 Borrowing Base Certificates	41
	10.1.7 Management Reports	41
	10.1.8 Projections	41
	10.1.9 Retail and Lease Reports	42
	10.1.10 Subordinated Debt Notices	42
	10.1.11 Other Information	42
10.2	Books, Records and Inspections	42
10.3	Maintenance of Property; Insurance	42

iii

10.4	Compliance with Laws; Payment of Taxes and Liabilities	44
10.5	Maintenance of Existence, etc	44
10.6	Use of Proceeds	44
10.7	Employee Benefit Plans	44
10.8	Environmental Matters	45
10.9	Tax Shelter Registration	45
10.10	Further Assurances	45
10.11	Deposit Accounts	46
10.12	U.S. Bank Letter of Credit	46
10.13	U.S. Bank Franchisor Real Estate Guaranties	46
10.14	Collateral Access Agreements	46
SECTION 11	NEGATIVE COVENANTS	46
11.1	Debt	46
11.2	Liens	47
11.3	Operating Leases	48
11.4	Restricted Payments	48
11.5	Mergers, Consolidations, Sales	48
11.6	Modification of Organizational Documents	49
11.7	Transactions with Affiliates	49
11.8	Unconditional Purchase Obligations	49
11.9	Inconsistent Agreements	49
11.10	Business Activities; Issuance of Equity	49
11.11	Investments	50
11.12	Cancellation of Debt	50
11.13	Fiscal Year	51
11.14	Financial Covenants	51
	11.14.1 Consolidated Fixed Charge Coverage Ratio	51
	11.14.2 Total Senior Debt Cash Flow Leverage Ratio	51
	11.14.3 Paid Sublease Ratio	51
SECTION 12	EFFECTIVENESS; CONDITIONS OF LENDING, ETC	51
12.1	Initial Credit Extension	51
	12.1.1 Notes	51
	12.1.2 Authorization Documents	51


	12.1.3 Consents, etc	51
	12.1.4 Letter of Direction	52
	12.1.5 Guaranty and Collateral Agreement	52
	12.1.6 Perfection Certificate	52
	12.1.7 Real Estate Documents	52
	12.1.8 Stock Pledge Agreements	52
	12.1.9 Opinions of Counsel	52
	12.1.10 Insurance	53
	12.1.11 Payment of Fees	53
	12.1.12 Environmental Reports	53
	12.1.13 Search Results; Lien Terminations	53
	12.1.14 Filings, Registrations and Recordings	53
	12.1.15 Borrowing Base Certificate	53
	12.1.16 Closing Certificate	53
	12.1.17 Other	53
12.2	Conditions	53
	12.2.1 Compliance with Warranties, No Default, etc	54
	12.2.2 Confirmatory Certificate	54
SECTION 13	EVENTS OF DEFAULT AND THEIR EFFECT	54
13.1	Events of Default	54
	13.1.1 Non-Payment of the Loans, etc	54
	13.1.2 Non-Payment of Other Debt	54
	13.1.3 Other Material Obligations	54
	13.1.4 Bankruptcy, Insolvency, etc	55
	13.1.5 Non-Compliance with Loan Documents	55
	13.1.6 Representations; Warranties	55
	13.1.7 Pension Plans	55
	13.1.8 Judgments	55
	13.1.9 Invalidity of Collateral Documents, etc	55
	13.1.10 Invalidity of Subordination Provisions, etc	56
	13.1.11 Change of Control	56
	13.1.12 Material Adverse Effect	56
	13.1.13 U.S. Bank Documents	56


13.2	Effect of Event of Default	56
SECTION 14	THE AGENT	56
14.1	Appointment and Authorization	56
14.2	Issuing Lender	57
14.3	Delegation of Duties	57
14.4	Exculpation of Administrative Agent	57
14.5	Reliance by Administrative Agent	58
14.6	Notice of Default	58
14.7	Credit Decision	58
14.8	Indemnification	59
14.9	Administrative Agent in Individual Capacity	59
14.10	Successor Administrative Agent	60
14.11	Collateral Matters	60
14.12	Administrative Agent May File Proofs of Claim	60
14.13	Other Agents; Arrangers and Managers	61
SECTION 15	GENERAL	61
15.1	Waiver; Amendments	61
15.2	Confirmations	62
15.3	Notices	62
15.4	Computations	62
15.5	Costs, Expenses and Taxes	63
15.6	Assignments; Participations	63
	15.6.1 Assignments	63
	15.6.2 Participations	64
15.7	Register	65
15.8	GOVERNING LAW	65
15.9	Confidentiality	65
15.10	Severability	66
15.11	Nature of Remedies	66
15.12	Entire Agreement	66
15.13	Counterparts	66
15.14	Successors and Assigns	66
15.15	Captions	67


15.16	Patriot Act Notification	67
15.17	Indemnification by the Company	67
15.18	Nonliability of Lenders	68
15.19	Forum Selection and Consent to Jurisdiction	68
15.20	Waiver of Jury Trial	69

vii

ANNEXES

ANNEX A	Lenders and Pro Rata Shares
ANNEX B	Addresses for Notices
ANNEX C	Applicable Margin

SCHEDULES

SCHEDULE 9.6	Litigation and Contingent Liabilities
SCHEDULE 9.8	Subsidiaries
SCHEDULE 9.16	Insurance
SCHEDULE 9.17	Real Property
SCHEDULE 9.21	Labor Matters
SCHEDULE 11.1	Existing Debt
SCHEDULE 11.2	Existing Liens
SCHEDULE 11.11	Investments
SCHEDULE 12.1	Debt to be Repaid

EXHIBITS

EXHIBIT A	Form of Note (Section 3.1)
EXHIBIT B	Form of Compliance Certificate (Section 10.1.3)
EXHIBIT C	Form of Borrowing Base Certificate (Section 1.1)
EXHIBIT D	Form of Assignment Agreement (Section 15.6.1)
EXHIBIT E	Form of Notice of Borrowing (Section 2.2.2)
EXHIBIT F	Form of Notice of Conversion/Continuation (Section 2.2.3)
EXHIBIT G	Form of U.S. Bank Franchisor Guaranty
EXHIBIT H	Form of U.S. Bank Franchisor Real Estate Guaranty

viii

CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of March 18, 2004 (this Agreement) is entered into among FRESH BRANDS, INC., a Wisconsin corporation (the Company), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the Lenders) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, LaSalle), as administrative agent for the Lenders and U.S. BANK NATIONAL ASSOCIATION (in its individual capacity, U.S. Bank), as documentation agent.

The Lenders have agreed to make available to the Company a $40,000,0000 revolving credit facility, with a $10,000,000 letter of credit subfacility, upon the terms and conditions set forth herein.

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

SECTION 1 DEFINITIONS.

1.1 Definitions. When used herein the following terms shall have the following meanings:

Account Debtor is defined in the Guaranty and Collateral Agreement.

Account or Accounts is defined in the UCC.

Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the acquisition of in excess of 50% of the Capital Securities of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is already a Subsidiary).

Administrative Agent means LaSalle in its capacity as administrative agent for the Lenders hereunder and any successor thereto in such capacity.

Affected Loan see Section 8.3.

Affiliate of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any officer or director of such Person and (c) with respect to any Lender, any entity administered or managed by such Lender or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be controlled by any other Person if such Person possesses, directly or indirectly, power to vote 20% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers (the 20% Test) or power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Unless expressly stated otherwise herein (i) neither the Administrative Agent nor any Lender shall be deemed an Affiliate of any Loan Party and (ii) no franchisee of a Loan Party or any wholesale customer shall be deemed an Affiliate of any Loan Party unless the 20% Test is met and (iii) neither the retirement savings plan nor any mutual fund shall be deemed an Affiliate of any Loan Party.

Agent Fee Letter means the Fee letter dated as of March __, 2004 between the Company and the Administrative Agent.

Agreement see the Preamble.

Applicable Margin see Annex C.

Asset Disposition means the sale, lease, assignment or other transfer for value (each, a Disposition) by any Loan Party to any Person (other than a Loan Party) of any asset or right of such Loan Party (including, the loss, destruction or damage of any thereof or any actual or threatened (in writing to any Loan Party) condemnation, confiscation, requisition, seizure or taking thereof) other than (a) the Disposition of any asset which is to be replaced, and is in fact replaced, within 120 days with another asset performing the same or a similar function, (b) the Disposition of inventory and obsolete equipment in the ordinary course of business (c) sales of new franchised or corporate supermarkets and other facilities in sale-leaseback transactions, (d) sales of assets associated with closing or to-be-closed supermarkets, (e) any sale, assignment or transfer to Company by a Loan Party or a Loan Party to another Loan Party or Company, and (f) other Dispositions the Net Cash Proceeds of which do not in the aggregate exceed $2,500,000 during the term of this Agreement.

Assignee see Section 15.6.1.

Assignment Agreement see Section 15.6.1.

Attorney Costs means, with respect to any Person, all reasonable fees and charges of any counsel to such Person and all court costs and similar legal expenses.

Bank Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and a Lender or its Affiliates in connection with any of the Bank Products.

Bank Product Obligations means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Loan Parties to any Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that a Loan Party is obligated to reimburse to the Administrative Agent or any Lender as a result of the Administrative Agent or such Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Loan Parties pursuant to the Bank Product Agreements.

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CREDIT AGREEMENT

dated as of March 18, 2003

among

FRESH BRANDS, INC. as the Company

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO, as Lenders,

LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent and Co-Lead Arranger,

and

U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent and Co-Lead Arranger

FRESH BRANDS, INC.
as the Company

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,

LASALLE BANK NATIONAL ASSOCIATION,
as Administrative Agent and Co-Lead Arranger,

U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent and Co-Lead Arranger