Exhibit 10.1

November 20, 2015                        

Hawkins, Inc.

Senior Secured Credit Facility

Commitment Letter

Hawkins, Inc.

2381 Rosegate

Roseville, MN 55113

Attention: Ms. Kathleen Pepski

Chief Financial Officer

Ladies and Gentlemen:

Hawkins, Inc. (“Borrower” or “you”) has requested that U.S. Bank National
Association (“U.S. Bank”) agree to structure and arrange a proposed senior
secured credit facility in an initial aggregate amount of up to $165,000,000
(the “Facility”), that U.S. Bank and JP Morgan Chase Bank, N.A. (“JP Morgan” and
together with U.S. Bank, each a “Lender” and collectively, the “Lenders” or “us”
or “we”) each commit to provide a portion of the Facility, and that U.S. Bank
serve as administrative agent for the Facility. You have advised us that you
intend to use a portion of the proceeds under the Facility on the Closing Date
(as defined below) to acquire all of the outstanding equity interests of a
company previously identified to us as “Zeal” (the “Target”) from its current
equityholders (the “Sellers”) pursuant to the Purchase Agreement (as defined in
the Term Sheet (as defined below)).

U.S. Bank is pleased to advise you of its commitment to provide up to
$107,250,000 of the Facility, and JP Morgan is pleased to advise you of its
commitment to provide up to $57,750,000 of the Facility, in each case upon the
terms and subject to the conditions set forth or referred to in this commitment
letter and in the Summary of Terms and Conditions attached hereto as Exhibit A
(the “Term Sheet”, and together with this commitment letter, the “Commitment
Letter”). The commitments of the Lenders are several and not joint.

It is agreed that U.S. Bank will act as the sole and exclusive Administrative
Agent, Lead Arranger (in such capacity, the “Arranger”), and Bookrunner for the
Facility. You agree that no other agents, co-agents, bookrunners or arrangers
will be appointed, no other titles will be awarded and no compensation (other
than that expressly contemplated by the Term Sheet and the Fee Letter referred
to below) will be paid in connection with the Facility unless you and we shall
so agree.

You agree promptly to prepare and provide to U.S. Bank and JP Morgan all
information with respect to the Borrower, its subsidiaries and the transactions
contemplated hereby, including all financial information and projections (the
“Projections”), as the Lenders may reasonably request in connection with the
commitments and the arrangement of the Facility. You hereby represent and
covenant that (a) all written information (other than the Projections and
information of a general economic or industry specific nature) (the
“Information”) that has been or will be made available to U.S. Bank or JP Morgan
by you or any of your representatives (which Information shall be to your
knowledge to the extent it relates to the Target and its subsidiaries) is or
will be, when furnished and taken as a whole, complete and correct in all
material respects and does not or will not, when furnished and taken as a whole,
contain any untrue

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statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made and (b) the Projections
that have been or will be made available to U.S. Bank or JP Morgan by you or any
of your representatives have been or will be prepared in good faith based upon
reasonable assumptions at the time made available (it being recognized by us
that such Projections are not to be viewed as facts and that actual results
during the period or periods covered by any such Projects may differ from the
projected results, and that such differences may be material). You agree (i) to
furnish us with such Information and Projections as U.S. Bank or JP Morgan may
reasonably request and (ii) that in arranging the Facility, U.S. Bank may use
and rely on the Information and the Projections without independent verification
thereof.

As the Arranger, U.S. Bank will manage all aspects of the arrangement of the
Facility, including decisions as to the allocations of the commitments among the
Lenders and the amount and distribution of fees among the Lenders; provided,
however, that JP Morgan’s share of the credit facilities shall not be less than
35% and pro-rata amongst all of the credit facilities and JPMorgan’s share of
the share of the fees owed to all Lenders shall not be less than 35% and
pro-rata amongst such fees. In acting as the Arranger, U.S. Bank will not have
any responsibility other than to arrange the Facility as set forth herein and
shall in no event be subject to any fiduciary or other implied duties.
Additionally, the Borrower acknowledges and agrees that, as Arranger, U.S. Bank
is not advising the Borrower or any of its affiliates as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.

You hereby waive and release, to the fullest extent permitted by law, any claims
that you may have against U.S. Bank and/or JP Morgan and their respective
affiliates with respect to any breach or alleged breach of agency or fiduciary
duty and agree that neither U.S. Bank nor JP Morgan will have any liability
(whether direct or indirect) to you in respect of such a fiduciary duty claim or
to any person asserting a fiduciary duty claim on your behalf, including your
equity holders, employees or creditors. You acknowledge that the transactions
described herein (including the exercise of rights and remedies hereunder and
under the Fee Letter) are arms’-length commercial transactions and that each of
U.S. Bank and JP Morgan is acting as principal and in its own best interests.
The Borrower shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation and appraisal
of the transactions contemplated hereby (including the Term Sheet), and neither
U.S. Bank nor JP Morgan shall have any responsibility or liability to the
Borrower or any of its affiliates with respect thereto. Any review by U.S. Bank
or JP Morgan of the Borrower, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of U.S. Bank or JP Morgan, as applicable, and shall not be on behalf of the
Borrower or any of its affiliates. You agree that the Lenders will act under
this Commitment Letter and the Fee Letter as independent contractors and that
nothing in this Commitment Letter, the Fee Letter, the nature of the Lenders’
services or in any prior relationship will be deemed to create an advisory,
fiduciary or agency relationship between us, on the one hand, and the Borrower,
its equity holders or its affiliates, on the other hand.

As consideration for U.S. Bank’s respective commitments hereunder and U.S.
Bank’s agreements to perform the services described herein, Borrower agrees to
pay to U.S. Bank the nonrefundable fees set forth in the Fee Letter dated as of
even date herewith and delivered herewith (the “Fee Letter”).

U.S. Bank’s and JP Morgan’s respective commitments hereunder and U.S. Bank’s
respective agreements to perform the services described herein are subject only
to the following conditions (i) since the date hereof, no Material Adverse
Effect (as defined in the Purchase Agreement) shall have occurred, and no event
shall have occurred that, individually or in the aggregate, with or without
notice or the lapse of time, would reasonably be expected to result in a
Material Adverse Effect and (ii) the other conditions expressly set forth in the
Term Sheet under the heading “Conditions Precedent to Initial Loans under the
Facilities.” Notwithstanding anything in this Commitment Letter, the Loan
Documents (as defined in the Term Sheet) or any other letter agreement or other
undertaking concerning the transaction to the contrary,

 

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(i) the only representations and warranties the accuracy of which shall be a
condition to the availability of the Term Loan Facility (as defined in the Term
Sheet) and the making of the initial loans on the Closing Date (as defined in
the Term Sheet) shall be (A) such of the representations and warranties with
respect to the Target made by the Sellers in the Purchase Agreement as are
material to the interests of the U.S. Bank, JP Morgan and the Arranger, but only
to the extent that you have (or your applicable affiliate has) the right to
terminate your (or its) obligations under the Purchase Agreement or decline to
consummate the Closing Date Acquisition as a result of a breach of such
representations and warranties (as determined without giving effect to any
waiver, amendment, consent or other modification thereto) (collectively, the
“Specified Acquisition Agreement Representations”) and (B) the Specified
Representations (as defined below) made by the Borrower and the Guarantors (as
defined in the Term Sheet) under the Loan Documents and (ii) the terms of the
Loan Documents and closing deliverables shall be in a form such that they do not
impair availability of the Term Loan Facility and the making of the initial
loans on the Closing Date if the conditions expressly set forth in this
paragraph are satisfied or waived by the Lenders (it being understood that, to
the extent any lien or security interest on or in any Collateral (as defined in
the Term Sheet) (other than to the extent that a lien on such Collateral may be
perfected (x) by the filing of a financing statement under the Uniform
Commercial Code or (y) by the delivery of stock certificates of the Borrower and
its subsidiaries) or is not or cannot be perfected on the Closing Date after
your use of commercially reasonable efforts to do so, the perfection of such
Collateral shall not constitute a condition precedent to the availability of the
Term Loan Facility and the making of the initial loans on the Closing Date, but
shall be required to be perfected within 90 days after the Closing Date (subject
to extensions by the Administrative Agent (as defined in the Term Sheet), in its
sole discretion); provided, however, that, notwithstanding the foregoing, the
Borrower and Guarantor shall be obligated to provide to the Administrative Agent
all documents and other information requested by Administrative Agent to assist
the Administrative Agent in perfection of liens on the Collateral). For purposes
hereof, “Specified Representations” means the representations and warranties of
the Borrower and the Guarantors set forth in the Loan Documents relating to
corporate or other organizational existence of the Borrower and Guarantors,
organizational power and authority (as to execution, delivery and performance of
the applicable Loan Documents) of the Borrower and Guarantors, the due
authorization, execution, delivery and enforceability of the applicable Loan
Documents, solvency of the Borrower and its subsidiaries, no conflicts resulting
from the entering into and performance of the Loan Documents with charter
documents of the Borrower and Guarantors or material laws, compliance and no
conflicts with the Investment Company Act, Federal Reserve margin regulations,
the Patriot Act, FCPA, OFAC, and other applicable domestic and foreign
anti-money laundering and anti-terrorism laws, and, subject to permitted liens
and the limitations set forth in the prior sentence, the creation, validity,
perfection and priority of security interests in the Collateral (subject, in
each case, to certain customary exceptions to be set forth in the Loan Documents
and consistent with the Documentation Principles (as defined below)). This
paragraph shall be referred to herein as the “Certain Funds Provision.”

Borrower agrees (a) to indemnify and hold harmless U.S. Bank, JP Morgan and each
of their respective affiliates and their respective officers, directors,
employees, advisors, affiliates, and agents (each, an “indemnified person”) from
and against any and all losses, claims, damages and liabilities to which any
such indemnified person may become subject arising out of or in connection with
this Commitment Letter, the Fee Letter, the Facility, the use of the proceeds
thereof or any related transaction, claim, litigation, investigation or
proceeding relating to any of the foregoing, or any enforcement of the Loan
Documents, regardless of whether any indemnified person is a party thereto and
whether commenced by you or by any third party, and to reimburse each
indemnified person upon demand for any legal or other expenses incurred in
connection with investigating or defending any of the foregoing, provided that
the foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are found by
a final, non-appealable judgment of a court to arise from (1) the willful
misconduct or gross negligence of such indemnified person or (2) a material
breach in bad faith by such indemnified persons of their express obligations
hereunder pursuant to a claim initiated by the Borrower, and (b) to reimburse
U.S. Bank and JP Morgan and their respective affiliates on demand for all

 

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reasonable and documented out-of-pocket expenses (including reasonable and
documented due diligence expenses, arrangement expenses, electronic distribution
expenses, consultant’s fees and expenses, travel expenses, and reasonable fees,
charges and disbursements of one firm of primary outside legal counsel;
provided, however, that each indemnified person shall be entitled to reasonable
fees, charges and disbursements of its own primary outside legal counsel in the
event of enforcement proceedings) incurred in connection with the Facility and
any related documentation (including this Commitment Letter, the Fee Letter and
the definitive financing documentation) or the administration, amendment,
modification or waiver thereof. You also agree that no indemnified person shall
have any liability (whether direct or indirect, in contract or tort, or
otherwise) to you or your affiliates or to your or their respective equity
holders or creditors arising out of, or related to or in connection with any
aspect of the transactions contemplated hereby, except to the extent such
liability is determined in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from (1) such indemnified party’s own
gross negligence or willful misconduct or (2) a material breach in bad faith by
such indemnified persons of their express obligations hereunder. Neither the
Borrower nor any indemnified person shall be liable for (i) any damages arising
from the use by others of Information or other materials obtained through
electronic, telecommunications or other information transmission systems (except
to the extent that such damages are found by final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such indemnified party’s
own gross negligence or willful misconduct) or (ii) any special, indirect,
consequential, exemplary or punitive damages in connection with the Facility or
its activities related thereto.

This Commitment Letter shall not be assignable by you without the prior written
consent of U.S. Bank and JP Morgan (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and the indemnified person and is not intended to confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto and the indemnified persons. This Commitment Letter may not be
amended or waived except by an instrument in writing signed by you, U.S. Bank
and J.P. Morgan. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Commitment Letter by electronic or facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. This Commitment
Letter and the Fee Letter are the only agreements that have been entered into
among the Lenders with respect to the Facility and set forth the entire
understanding of the parties with respect thereto.

This Commitment Letter shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York. Each party hereto consents to
the exclusive jurisdiction and venue of the state or federal courts located in
the City of New York, Borough of Manhattan. Each party hereto irrevocably
waives, to the fullest extent permitted by applicable law, (a) any right it may
have to a trial by jury in any suit, action, proceeding, claim or counterclaim
by or on behalf of any party arising out of or relating to this Commitment
Letter or the Fee Letter, the transactions contemplated hereby or thereby, or
the performance of services hereunder or thereunder (whether based on contract,
tort or any other theory) and (b) any objection that it may now or hereafter
have to the laying of venue of any such legal proceeding in the state or federal
courts located in the City of New York, Borough of Manhattan.

This Commitment Letter is delivered to you on the understanding that neither
this Commitment Letter or the Fee Letter nor any of their terms or substance
shall be disclosed, directly or indirectly, to any other person (including,
without limitation, other potential providers or arrangers of financing) except
(a) to your directors, officers, agents, attorneys, accountants and advisors who
are directly involved in the consideration of this matter and for whom you shall
be responsible for any breach by any one of them of this confidentiality
undertaking, (b) as may be compelled in a judicial or administrative proceeding
or as otherwise required, as determined by Borrower in its good faith business
judgment, by law, rule or regulation, including without limitation, securities
laws and the rules and regulations of any securities exchange (in which case you
agree to inform us promptly thereof) and (c) to the Sellers and their directors,
officers, agents, attorneys, accountants and advisors who are directly involved
in the Acquisition on a confidential and need to know basis (but not the Fee
Letter and the contents thereof unless redacted in a form acceptable to U.S.
Bank in its reasonable discretion).

 

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U.S. Bank, JP Morgan and the Arranger each agrees to hold any confidential
information which it may receive from the Borrower in connection with this
Commitment Letter and Loan Documents in confidence, except for disclosure (i) to
its affiliates and to the Administrative Agent and any other Lender and their
respective affiliates, and, in each case, their respective employees, directors,
and officers, (ii) to legal counsel, accountants, and other professional
advisors to the Administrative Agent or such Lender, provided such parties have
been notified of the confidential nature of such information, (iii) to
prospective assignees or participants of the Facility, (iv) to regulatory
officials, (v) to any person as requested pursuant to or as required by law,
regulation, or legal process, (vi) to any person in connection with any legal
proceeding to which it is a party, (vii) to its direct or indirect contractual
counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, provided such parties have been
notified of the confidential nature of such information, (viii) to rating
agencies if requested or required by such agencies in connection with a rating
relating to the Facility, (ix) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Commitment Letter
or any Loan Document or the enforcement of rights hereunder or thereunder, and
(x) to the extent such information (1) becomes publicly available other than as
a result of a breach of this paragraph or (2) becomes available to the U.S.
Bank, JP Morgan or the Arranger on a non-confidential basis from a source other
than the Borrower. The provisions of this paragraph shall automatically
terminate upon the earlier of (a) one year following the date of this Commitment
Letter and (b) the date of the closing of the Facility.

You acknowledge that U.S. Bank, JP Morgan and their respective affiliates may be
providing debt financing, equity capital or other services (including financial
advisory services) to other companies in respect of which you may have
conflicting interests regarding the transactions described herein and otherwise.
Neither U.S. Bank nor JP Morgan will use confidential information obtained from
you by virtue of the transactions contemplated by this letter or their other
relationships with you (x) in connection with the performance by U.S. Bank or JP
Morgan, as applicable, of services for other companies or (y) in violation of
United States federal securities laws, and neither U.S. Bank nor JP Morgan will
furnish any such information to other companies. You also acknowledge that
neither U.S. Bank nor JP Morgan has any obligation to use in connection with the
transactions contemplated by this letter, or to furnish to you, confidential
information obtained from other companies. You further acknowledge that either
of U.S. Bank or JP Morgan may from time to time effect transactions, for its own
or its affiliates’ account or the account of customers, and hold positions in
loans, securities or options on loans or securities of the Borrower and its
affiliates and of other companies that may be the subject of the transactions
contemplated by this Commitment Letter.

U.S. Bank and JP Morgan may employ the services of its affiliates in providing
certain services hereunder and, in connection with the provision of such
services, subject to the confidentiality restrictions set forth above, may
exchange with such affiliates information concerning you and the other companies
that may be the subject of the transactions contemplated by this Commitment
Letter, and, to the extent so employed, such obligations of U.S. Bank or JP
Morgan, as applicable, thereunder, and such affiliates will be entitled to the
benefits afforded to us hereunder. Assuming the Facility closes, you also
acknowledge and agree to the disclosure by us of information related to the
Facility to “Gold Sheets” and other similar trade publications, and to our
publication of tombstones and similar advertising materials relating to the
Facility. The information disclosed shall consist of deal terms and other
information customarily found in such publications, tombstones, and advertising
materials.

 

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The reimbursement, indemnification, confidentiality, governing law, consent to
jurisdiction and venue and waiver of right to jury trial provisions contained
herein and in the Fee Letter and any other provision herein or therein which by
its terms expressly survives the termination of this Commitment Letter or the
Fee Letter, as applicable, shall remain in full force and effect regardless of
whether definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or U.S. Bank’s or JP
Morgan’s commitment hereunder; provided that, upon the effectiveness of the
definitive documentation for the Facility, the reimbursement and indemnification
provisions contained herein shall be superseded and replaced by the
reimbursement and indemnification provisions contained in such definitive
documentation.

Each of U.S. Bank and JP Morgan hereby notifies you that pursuant to the
requirements of the U.S.A. PATRIOT ACT (Title III of Pub. L. 107.56 (signed into
law October 26, 2001)) (the “Patriot Act”), it and each of the Lenders may be
required to obtain, verify and record information that identifies you, which
information may include your name and address and other information that will
allow U.S. Bank or JP Morgan, as applicable, to identify you in accordance with
the Patriot Act. This notice is given in accordance with the requirements of the
Patriot Act and is effective for U.S. Bank and JP Morgan.

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet by returning to us executed
counterparts hereof not later than 5:00 p.m., Central time, on November 30,
2015. U.S. Bank’s and JP Morgan’s respective commitments and agreements herein
will expire at such time in the event each of U.S. Bank and JP Morgan has not
received such executed counterparts in accordance with the second immediately
preceding sentence. This Commitment Letter and the Term Sheet supersede any and
all prior versions hereof and thereof.

[Signature Page Follows]

 

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U.S. Bank and JP Morgan are pleased to have been given the opportunity to assist
you in connection with this important financing.

 

Very truly yours, U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Bryan Carow

  Name: Bryan Carow   Title: Vice President JP MORGAN CHASE BANK, N.A. By:  

/s/ Nicolas L. Schweim

  Name: Nicolas L. Schweim   Title: Authorized Officer

Accepted and agreed to as of

November 23, 2015 by:

 

HAWKINS, INC. By:  

/s/ Patrick H. Hawkins

  Name: Patrick H. Hawkins   Title: Chief Executive Officer and President

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Exhibit A

Term Sheet

(See Attached)

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HAWKINS, INC.

SENIOR SECURED CREDIT FACILITIES

SUMMARY OF TERMS AND CONDITIONS

November 20, 2015

 

This Summary of Terms and Conditions is intended as an outline only and does not
purport to summarize all the terms, conditions, covenants, representations,
warranties or other provisions which would be contained in definitive legal
documentation of the financing transaction contemplated herein. Capitalized
terms used herein but not otherwise defined shall have the meaning set forth in
the Commitment Letter to which this Summary of Terms and Conditions is attached
(the “Commitment Letter”).

 

Borrower:    Hawkins, Inc. (the “Borrower” or the “Company”). Guarantors:    All
of the Company’s other material domestic subsidiaries (as materiality shall be
determined by the Borrower and the Administrative Agent) (the “Guarantors”). The
Guarantors shall unconditionally guaranty all of the Borrower’s obligations
under and in connection with the Facilities, including certain cash management
obligations and hedging obligations. Sole Lead Arranger and Sole Book Runner:   
U.S. Bank National Association (“U.S. Bank” and, in such capacity, the
“Arranger”) Administrative Agent    U.S. Bank (in such capacity, the
“Administrative Agent”) Lenders:    U.S. Bank and JP Morgan Chase Bank, N.A.
(“JP Morgan” and, together with U.S. Bank in such capacity, the “Lenders”)
Swingline Lender:    U.S. Bank (in such capacity, the “Swingline Lender”)
Facilities:   

An aggregate up to $165,000,000, consisting of an up to $65,000,000 senior
secured revolving loan credit facility (the “Revolving Loan Facility”) and an up
to $100,000,000 senior secured term loan credit facility (the “Term Loan
Facility” and, together with the Revolving Loan Facility, the “Facilities”), as
further described below. Subject to the terms and conditions of the
below-defined Loan Documents, the Term Loan Facility shall be fully funded as of
the Closing Date. The Facilities shall be made available to the Borrower in the
United States of America in U.S. Dollars.

 

The Revolving Loan Facility will include a letter of credit subfacility in the
amount of $5,000,000, and a swingline subfacility in the amount of $8,000,000.
The terms and conditions of the letter of credit subfacility and the swingline
subfacility shall be set forth in the Loan Documents and shall be in form and
substance acceptable to the Borrower, the Administrative Agent, the letter of
credit issuing bank and the Swingline Lender. Each Lender shall acquire, under
certain circumstances, irrevocable and unconditional participations in each
letter of credit and swingline loan. 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

Purpose:    The proceeds of the Facilities shall be used: (i) to finance the
acquisition of the stock of the Target (the “Closing Date Acquisition”) and (ii)
for working capital, capital expenditure, dividends, permitted acquisitions and
other lawful corporate purposes. Closing Date:    The date on which the
conditions precedent to the effectiveness of the Loan Documents have been
satisfied, which date must occur, if at all, no later than February 1, 2016 (the
“Closing Date”). Maturity:    The Facilities shall terminate and all amounts
outstanding thereunder shall be due and payable in full five years after the
Closing Date (the “Maturity Date”). Term Loan Facility Amortization:    Loans
under the Term Loan Facility shall be repaid in quarterly installments per the
annual amortization schedule shown in the table below:

 

     Annual Amortization  

Year 1

   $ 5,000,000 (5.0 %) 

Year 2

   $ 7,500,000 (7.5 %) 

Year 3

   $ 10,000,000 (10.0 %) 

Year 4

   $ 10,000,000 (10.0 %) 

Year 5

   $ 10,000,000 (10.0 %) 

Maturity

     all remaining amounts   

 

Mandatory Prepayments:    The Revolving Loan Facility will be required to be
prepaid to the extent the aggregate revolving credit exposure under the
Revolving Loan Facility exceeds the aggregate commitments thereunder.

Interest Rates,

Commitment

Fees, & Letter of Credit Fees:

   Advances under the Facilities shall carry an interest rate based on the
Leverage Ratio, as measured at the end of each fiscal quarter, equal to the
greater of (a) zero percent (0.0%) and (b) LIBOR or the Base Rate plus the
following applicable margins:

 

Leverage
Ratio    LIBOR
Margin     Base Rate
Margin     Commitment
Fee   > or = 2.00x      1.50 %      0.50 %      0.30 %  < 2.00x & > or = 1.00x
     1.25 %      0.25 %      0.25 %  < 1.00x      1.125 %      0.125 %      0.25
% 

 

  

LIBOR for any interest period will be the applicable Interest Settlement Rate
for deposits in U.S. Dollars appearing on the applicable Reuters Screen for U.S.
Dollars as of 11:00 a.m. (London time) on the quotation date for such interest
period and having a maturity equal to such interest period, or a substitute
deemed appropriate by the Administrative Agent if the applicable screen rate is
not available to the Administrative Agent for any reason.

 

Interest on LIBOR-based loans shall be payable at the end of each interest
period or every three months, whichever comes sooner. Interest periods shall be
for one, two, three or six month durations. LIBOR pricing will be adjusted for
any statutory reserves.

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

   The Base Rate will be the highest of (i) U.S. Bank’s prime rate, (ii) the
Federal Funds Rate + 0.50%, and (iii) one-month LIBOR for U.S. Dollars plus 1%.
Interest on Base Rate loans shall be payable quarterly in arrears on the first
day of each quarter.    Calculations of interest and fees shall be made on the
basis of actual number of days elapsed in a 360 day year (or a 365/366 day year
in the case of Base Rate loans determined using U.S. Bank’s prime rate).   
Interest on swingline loans will accrue at a rate equal to, at the Borrower’s
option, LIBOR (resetting daily) or the Base Rate plus, in each case, the
applicable margin applicable to the Revolving Loan Facility.    The Borrower
shall pay to the Administrative Agent for the benefit of the Lenders a letter of
credit fee at a per annum rate equal to the applicable margin for LIBOR-based
loans on the original face amount of each letter of credit issued under the
Revolving Loan Facility. Letter of credit fees in respect of such a letter of
credit shall be payable for the period beginning on the issuance date for such
letter of credit and ending on the expiration date or termination date therefor.
Such letter of credit fee will be paid quarterly in arrears. The Borrower also
shall pay a fronting fee equal to 0.125% on the original face amount of each
letter of credit issued under the Revolving Loan Facility to the letter of
credit issuing bank, as well as other customary letter of credit related fees.
   The default rate of interest shall be 2% above the then-applicable interest
rate. Commitment Fee:    Each Lender shall receive a commitment fee on the
unused portion of its commitment under the Revolving Loan Facility. Such
commitment fee shall accrue at the rate then applicable as set forth in the
above-referenced pricing grid, and shall be paid quarterly in arrears. Usage of
the Swingline subfacility shall not be treated as usage (but usage of the letter
of credit subfacility shall be considered usage) for purposes hereof. Upfront
Fees:    0.30% of the aggregate commitments under the Facilities, due and
payable on the Closing Date, to be paid to the Administrative Agent for the
benefit of the Lenders. Other Fees:    Payable to the Administrative Agent upon
the Closing Date, pursuant to the Fee Letter.

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

Collateral:    The Facilities shall be secured by perfected first priority
security interests in and liens on substantially all of the personal property
assets of the Borrower and the Guarantors, including a pledge of 100% of the
capital stock of the Borrower’s subsidiaries (collectively, the “Collateral”),
subject to customary exceptions including that with respect to foreign
subsidiaries, the Borrower and the Guarantors shall only be required to pledge
65% of the equity interests of their respective first-tier foreign subsidiaries
if material adverse tax consequences would result from a pledge of greater than
65% of such equities or of equities of foreign subsidiaries other than
first-tier foreign subsidiaries. The Collateral shall ratably secure the
Borrower’s and each Guarantor’s obligations in respect of the Facilities, as
well as their respective cash management arrangements and hedging agreements
with Lenders under the Facilities. The Borrower and the Guarantors will also
provide a negative pledge on all real property, subject to certain limitations
to be agreed upon by the Borrower and the Lenders. This provision shall be
subject to the Certain Funds Provision in the Commitment Letter. Permitted
Acquisitions:    The Borrower and its subsidiaries shall be permitted to make
the Closing Date Acquisition and to make other acquisitions without the prior
written consent of the Lenders, provided that: (a) the acquisition would not
otherwise result in an event of default and unmatured event of default, (b) the
acquisition shall be completed on a non-hostile basis, (c) the target company is
in a substantially similar line of business as the Borrower or any of its
subsidiaries or any business reasonably related thereto, (d) all material
approvals have been obtained, (e) the Borrower shall furnish to the
Administrative Agent a certificate demonstrating pro forma liquidity of
$20,000,000 and pro forma compliance with the financial covenants. Total
consideration paid in connection with Permitted Acquisitions (not including the
Closing Date Acquisition) shall not exceed $20,000,000 in any fiscal year.
Permitted Distributions:    The Borrower shall be permitted to make
distributions, pay dividends or repurchase stock without the prior written
consent of the Lenders, provided that no event of default or unmatured event of
default exists and that the distribution, dividend or stock repurchase would not
otherwise result in an event of default or unmatured event of default.

Optional Principal

Payments/Reductions in

Aggregate Commitment:

   Voluntary prepayments and commitment reductions may be made at any time
without premium or penalty, subject to minimum notice and minimum prepayment or
reduction requirements, as the case may be; provided, that voluntary prepayments
of LIBOR-based loans made on a date other than the last day of an interest
period applicable thereto shall be subject to the payment of customary breakage
costs if any apply. All commitment reductions to the Revolving Loan Facility
shall be permanent.

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

Yield Protections/ Change in Capital Adequacy Regulations:    The definitive
Loan Documents shall contain customary provisions (a) protecting the Lenders
against increased costs or loss of yield resulting from changes in reserve, tax,
liquidity, capital adequacy and other requirements of law and from the
imposition of or changes in withholding or other taxes (including the
Administrative Agent’s customary Dodd-Frank, Basel III and tax provisions) and
(b) indemnifying the Lenders for customary breakage costs incurred in connection
with, among other things, any prepayment of a LIBOR-based loan on a day other
than the last day of an interest period with respect thereto. Defaulting Lender:
   The Loan Documents will include the Administrative Agent’s customary
defaulting lender provisions. Conditions Precedent to Initial Loans under the
Facilities:   

Subject to the Certain Funds Provision, the initial borrowings on the Closing
Date will be subject only to the conditions precedent set forth in the
Commitment Letter and the following conditions:

   a)    The Borrower and the Guarantors shall have executed and delivered
definitive documentation in respect of the Facilities that is acceptable to the
Administrative Agent and the Lenders (the “Loan Documents”) which shall be
consistent with the Certain Funds Provision in the Commitment Letter and the Fee
Letter, will contain only those conditions to borrowing, mandatory prepayments,
representations, warranties, covenants and events of default referred to in this
Commitment Letter and consistent with loan documentation terms customary and
usual for facilities and transactions of this type (but in no event including
any conditions to borrowing not set forth herein), and shall be negotiated in
good faith by the Borrower, the Administrative Agent and the Lenders (the
“Documentation Principles”).    b)    Receipt of a written opinion of the
Borrower’s and the Guarantors’ counsel in form and substance acceptable to the
Administrative Agent.    c)    Receipt of such documents and certificates
relating to the organization, existence, and good standing of the Borrower and
the Guarantors, and the authorization of the transactions and any other legal
matters relating to the Borrower, Guarantors, the Loan Documents or transactions
contemplated hereby, as may be further described in the list of closing
documents delivered as part of the Loan Documents.    d)    Evidence that any
credit facility currently in effect for the Borrower, Target or any of their
respective subsidiaries shall have been terminated and cancelled and all
indebtedness shall have been repaid (except to the extent that debt is being
repaid with the loans under the Facilities pursuant to payoff letters reasonably
acceptable to the Lenders) and all liens terminated.    e)    Evidence that any
liens and security interests securing the Facilities have been properly
documented, recorded and perfected, and that such liens and security interests
have first priority to the extent described above under the caption “Collateral”
pursuant to security documents in form and substance consistent with the
Documentation Principles; provided that this condition is subject to the Certain
Funds Provision.    f)    Payment of all fees and expenses due and payable on or
prior to the Closing Date.

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

   g)   

The Administrative Agent shall have received (1) pro forma financial statements
giving effect to the financings described herein and the other transactions, if
any, being consummated contemporaneously therewith, including, without
limitation, the Closing Date Acquisition, which demonstrate, in the Lenders’
reasonable judgment, together with all other information then available to the
Lenders, that the Borrower can repay its debts and satisfy its other obligations
as and when they become due, and can comply with the financial covenants
contained in the credit agreement evidencing the Facilities, (2) such
information as the Lenders may reasonably request to confirm the tax, legal, and
business assumptions made in such pro forma financial statements,
(iii) company-prepared financial statements for the fiscal period ended
September 30, 2015 for the Borrower and the Target, and (iv) audited financial
statements of the prior three fiscal years for the Borrower and, if available,
the Target;

 

   h)    The final terms and conditions of the Closing Date Acquisition shall
have been consummated or will be consummated concurrently with the initial
borrowing in accordance with the purchase agreement to be dated as of the date
that the Borrower accepts the terms of the Commitment Letter and the Term Sheet
(including all schedules and exhibits thereto, the “Purchase Agreement”). The
Borrower shall provide to each Lender copies of all consents, amendments,
waivers, supplements or other modifications of the Purchase Agreement
(collectively, the “Modifications”), and each Lender shall consent to any such
Modifications before any such Modifications become effective, such consent not
to be unreasonably withheld, delayed or conditioned, if such Modifications are
materially adverse to the Lenders, as determined by each Lender it its
reasonable discretion. The Company will deliver an officer’s certificate at
closing (x) confirming that there have been no modifications, alterations,
amendments or other changes or supplements to the Purchase Agreement or any
provisions of the Purchase Agreement has been waived or consented to, in each
case, in any respect that is materially adverse to the Lenders without the
consent of the Lenders not to be unreasonably withheld, delayed or conditioned
(it being understood and agreed that (i) any increase in the amount of
consideration required to consummate the Closing Date Acquisition shall not be
deemed to be adverse to the interests of the Lenders so long as any increase is
funded by increasing the balance sheet cash contribution by the Borrower and
(ii) any change to the definition of “Material Adverse Effect” in a manner
favorable to the Target shall be deemed to be adverse to the interests of the
Lenders), (y) attaching a certified copy of the Purchase Agreement, with all
amendments, modifications, supplements and attachments and (z) confirming that
the Closing Date Acquisition has been, or contemporaneously with the closing and
initial funding will be, consummated in accordance with the terms of the
Purchase Agreement and in compliance with applicable law and regulatory
approvals. Each Lender confirms that the draft Purchase Agreement dated as of
November 20, 2015 sent at 10:29 a.m. is satisfactory to such Lender. The
Specified Acquisition Agreement Representations shall be true and correct and
the Specified Representations shall be true and correct in all material
respects;

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

   i)    Receipt of all governmental, shareholder and third party consents
(including Hart-Scott-Rodino clearance) and approvals necessary in connection
with the Closing Date Acquisition and the related financings and expiration of
all applicable waiting periods without any action being taken by any authority
that could restrain, prevent or impose any material adverse conditions on the
Company and its subsidiaries, and no law or regulations shall be applicable
which in the reasonable judgment of the Administrative Agent could have such
effect;    j)    The delivery to the Administrative Agent of a solvency
certificate for the Borrower and its subsidiaries on a consolidated basis,
giving effect to the Closing Date Acquisition, in form and substance reasonably
acceptable to the Administrative Agent, from the chief financial officer of the
Borrower;    k)    After giving effect to the Closing Date Acquisition, the
Borrower and its subsidiaries shall have outstanding no indebtedness or
preferred stock other than (a) the loans and other extensions of credit under
the Facilities and (b) other indebtedness in limited amounts to be mutually
agreed upon; and    l)    The Borrower, the Target and each of the Guarantors
shall have provided the documentation and other information required by each
Lender to satisfy all applicable “know-your-customer” and anti-money laundering
rules and regulations, including the Patriot Act, at least five (5) days prior
to the Closing Date. Conditions Precedent to all Loans after the Initial Loans:
   Usual and customary for transactions of this type including, but not limited
to: (1) no event of default or unmatured event of default under the Facilities
and (2) all representations and warranties contained in the Loan Documents are
true and correct as of the applicable borrowing date.

Representations and

Warranties:

   Usual and customary for transactions of this type (with exceptions and
materiality standards to be agreed upon by the Borrower and the Lenders),
including, without limitation: (1) existence and standing; (2) authorization and
validity; (3) no conflict; government consent; (4) financial statements; (5)
material adverse change; (6) taxes: (7) litigation and contingent obligations;
(8) subsidiaries; (9) ERISA; (10) accuracy of information; (11) Reg U; (12)
material agreements; (13) compliance with laws; (14) ownership of properties;
(15) plan assets; prohibited transactions; (16) environmental matters; (17)
Investment Company Act; (18) insurance; (19) solvency; (20) no event of default
or unmatured event of default; (21) OFAC and anti-corruption laws; (22)
subordinated indebtedness; (23) collateral. Reporting Requirements:    Usual and
customary for transactions of this type, including, without limitation:    a)   
Annual audited consolidated financial statements within 120 days after the end
of each fiscal year;    b)    Consolidated unaudited financial statements within
45 days after the close of each quarterly periods of each of the Borrower’s
fiscal years, certified by the Chief Financial Officer of the Borrower;

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

   c)    Annual plan and forecast (including a projected consolidated balance
sheet and income statement of the Borrower and its subsidiaries) within 30 days
after the beginning of the fiscal year;    d)    Compliance certificate fully
completed and signed by the Chief Financial Officer of the Borrower together
with each delivery of financials;    e)    Copies of all financial statements,
reports and proxy statements furnished to the shareholders of the Borrower;   
f)    Promptly upon filing with the SEC copies of all registration and annual
quarterly, monthly or other regular reports (provided that information provided
in (a), (b), (e) and (f) shall be deemed delivered on the date that such
information is publicly filed with the SEC); and    g)    Any other business or
financial information which may be reasonably requested by the Lenders.

Affirmative and

Negative Covenants:

   Usual and customary for transactions of this type, including, without
limitation with customary baskets and thresholds: (1) the foregoing reporting
requirements; (2) use of proceeds; (3) notice of material events; (4) conduct of
business; (5) taxes; (6) insurance; (7) compliance with laws and material
contractual obligations; (8) maintenance of properties; (9) books and records;
inspection; (10) indebtedness; (11) merger; (12) sale of assets; (13)
investments; (14) acquisitions; (15) liens; (16) transactions with affiliates;
(17) restricted payments (other than as provided above under “Permitted
Distributions”); (18) OFAC and anti-corruption laws; (19) guarantors and
collateral; (20) payment of obligations; (21) subordinated indebtedness;
(22) sale of accounts receivable; (24) sale and leaseback transactions.
Financial Covenants:    Financial covenants to include (and to be defined in a
manner mutually acceptable to the Borrower and the Lenders):    a)    Fixed
Charge Coverage Ratio: The ratio of consolidated EBITDAR minus consolidated
maintenance capital expenditures minus dividends and distributions made in cash
minus cash taxes to consolidated interest expense plus consolidated rent
expenses plus current scheduled principal payments on indebtedness, shall not be
less than 1.15 to 1.0. Maintenance capital expenditures shall be defined to
equal 50% of depreciation for the period of determination.    b)    Leverage
Ratio: The ratio of consolidated total funded indebtedness (measured net of
domestic cash on hand in excess of $10 million and to the extent such cash does
not exceed an additional $25 million) to consolidated EBITDA shall be less than
3.0 to 1.0. Events of Default:    Usual and customary for transactions of this
type (with grace periods and materiality standards to be agreed upon by the
Borrower and the Lenders), including the following (in each case with respect to
the Borrower and its subsidiaries): (1) breach of representation or warranty;
(2) nonpayment of principal (with no grace period therefor), interest, fees or
other amounts (with an agreed upon grace period therefor); (3) failure to
perform or

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

   observe financial covenants, negative covenants or certain affirmative
covenants (in each case with no grace period therefor) and any other affirmative
covenants or other provisions of the credit agreement evidencing the Facilities
(not otherwise covered in this list of events of default) not remedied within 30
days after the occurrence of such failure; (4) failure to pay material
indebtedness when due or the occurrence of any event in respect of material
indebtedness that causes or otherwise permits the acceleration of such material
indebtedness; (5) bankruptcy and insolvency events of default, including the
appointment of a receiver, trustee, examiner, liquidator or similar official
without the Borrower’s or the applicable subsidiary’s consent (with a grace
period for involuntary proceedings and the aforementioned appointments without
Borrower or subsidiary consent); (6) any court, government or governmental
agency condemning, seizing or taking control of, all or any material portion (as
shall be defined in the Loan Documents) of the property of the Borrower and its
subsidiaries; (7) monetary judgment defaults in an amount to be agreed; (8)
customary ERISA defaults; (9) nonpayment of any rate management obligation; (10)
change in control (which shall be defined to exclude any default that would
result from any changes in the composition of the board of directors by
directors that were neither nominated by the board of directors nor appointed or
approved by directors so nominated); (11) the occurrence of any “default” under
any Loan Document (other than the credit agreement evidencing the Facilities, to
the extent covered above), subject to any grace period provided therefor in such
Loan Document; (12) invalidity or unenforceability of any Loan Document
(including any guaranty or collateral document); (13) failure by Borrower or its
subsidiaries to take any action to create and maintain a valid and perfected
first priority perfected security interest in the Collateral (except as
otherwise permitted under the Loan Documents). Assignments and Participations:
   Lenders will be permitted to assign and participate the Facilities.
Assignments will be in minimum amounts of $5,000,000 and assignees will be
subject to the consent (such consent not to be unreasonably withheld) of the
Borrower (in the absence of an event of default), the letter of credit issuing
bank, the swing line lender and the Administrative Agent; provided, that the
Borrower shall be deemed to have consented to any assignment if it shall not
have objected thereto in writing within 5 business days after receiving notice
thereof from the Administrative Agent. Assignments will be subject to the
payment by the assigning Lender of a $3,500 service fee to the Administrative
Agent. Costs and Expenses:    All reasonable and documented costs and expenses
of the Administrative Agent and the Arranger incurred in the due diligence,
preparation, administration, and arrangement of the Loan Documents and the
financings and other transactions evidenced thereby, including but not limited
to, expenses of due diligence investigation, consultants’ fees, arrangement
expenses, travel expenses and fees, disbursements, secured document distribution
(such as DebtX), and charges of one firm of primary outside legal counsel, shall
be borne by the Borrower, regardless of whether or not the Facilities close. All
costs and expenses, including attorneys’ fees, of the Administrative Agent, the
Arranger and the Lenders (including any letter of credit issuing banks or
Swingline Lender, if applicable) in connection with the collection and
enforcement of the Loan Documents (including all workouts and restructurings)
also shall be borne by the Borrower.

 

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HAWKINS, INC.    CONFIDENTIAL INFORMATION

SUMMARY OF TERMS AND CONDITIONS

  

NOVEMBER 20, 2015

  

 

 

Required Lenders:    For the purpose of amending or modifying terms and
conditions of the Loan Documents (including waivers and consents), Lenders
holding greater than 66 2/3% of the loans and unused commitments under the
Facilities (the “Required Lenders”) shall be required to approve such an
amendment or modification; provided, however, that at least 2 lenders must
approve any such amendment or modification. Notwithstanding the foregoing, the
consent of all of the Lenders shall be required to (i) reduce the percentage
specified in the definition of Required Lenders, (ii) amend or modify the
amendment section of the credit agreement evidencing the Facilities, (iii)
release all or substantially all of the Collateral, and (iv) release all or
substantially all of the Guarantors, and the consent of each Lender directly
affected thereby shall be required to (a) extend the final maturity of any loan
under the Facilities, (b) extend the expiry date of any letter of credit issued
under the Revolving Loan Facility beyond the Maturity Date, (c) postpone any
regularly scheduled payment of principal or forgive all or any portion of the
principal amount of any loan or letter of credit reimbursement obligation, (d)
reduce the rate or extend the time of payment of interest or fees, or (e)
increase the amount of such Lender’s commitment(s) under the Facilities.
Indemnification:    The Borrower will indemnify and hold harmless the
Administrative Agent, the Arranger, each Lender (including each letter of credit
issuing bank and Swingline Lender, if applicable) and their respective
affiliates, and their officers, directors, employees, agents and advisors, in a
manner consistent with the indemnification provisions in the Commitment Letter.
This indemnification shall survive and continue for the benefit of all such
persons or entities but the provisions in the Commitment Letter shall be
superseded by the provisions contained in the Loan Documents. Governing Law:   
The Loan Documents shall be governed by the laws of the State of New York
(without reference to conflict of law principles).

Nondisclosure by

Borrower or any affiliate:

   By accepting delivery of this Summary of Terms and Conditions, the Borrower
hereby agrees that it will not disclose to any person any of the terms contained
herein or the fact that this Summary of Terms and Conditions exists other than
as provided in the Commitment Letter.

Counsel to the

Administrative Agent

and U.S. Bank as

Arranger

   Dorsey & Whitney LLP

 

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