exv4w01



 





Exhibit 4.01




 





364-DAY CREDIT AGREEMENT




dated as of




JUNE 13, 2007




among




KELLOGG COMPANY




and




JPMORGAN CHASE BANK, N.A.,

as Lender and Administrative Agent




 











 



iii




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	Definitions
	 	 	 	 
	 
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	15	 
	SECTION 1.03. Terms Generally
	 	 	15	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	16	 
	SECTION 1.05. Determinations Made in Good Faith
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	The Credits
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. Commitments
	 	 	16	 
	SECTION 2.02. Loans and Borrowings
	 	 	16	 
	SECTION 2.03. Requests for Borrowings
	 	 	17	 
	SECTION 2.04. Funding of Borrowings
	 	 	18	 
	SECTION 2.05. Interest Elections
	 	 	18	 
	SECTION 2.06. Termination and Reduction of Commitments
	 	 	19	 
	SECTION 2.07. Repayment of Loans; Evidence of Debt
	 	 	20	 
	SECTION 2.08. Prepayment of Loans
	 	 	21	 
	SECTION 2.09. Fees
	 	 	22	 
	SECTION 2.10. Interest
	 	 	22	 
	SECTION 2.11. Alternate Rate of Interest
	 	 	23	 
	SECTION 2.12. Increased Costs
	 	 	23	 
	SECTION 2.13. Break Funding Payments
	 	 	24	 
	SECTION 2.14. Taxes
	 	 	25	 
	SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	26	 
	SECTION 2.16. Mitigation Obligations; Replacement of Lenders
	 	 	28	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	Representations and Warranties
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Organization and Qualification
	 	 	28	 
	SECTION 3.02. Subsidiaries
	 	 	29	 
	SECTION 3.03. Corporate Authority and Validity of Obligations
	 	 	29	 
	SECTION 3.04. Margin Stock
	 	 	29	 
	SECTION 3.05. Financial Reports
	 	 	29	 
	SECTION 3.06. No Material Adverse Change
	 	 	30	 
	SECTION 3.07. Litigation
	 	 	30	 
	SECTION 3.08. Tax Returns
	 	 	30	 












 



iv


	 	 	 	 	 
	 	 	Page
	SECTION 3.09. Approvals
	 	 	30	 
	SECTION 3.10. ERISA
	 	 	30	 
	SECTION 3.11. Environmental Matters
	 	 	31	 
	SECTION 3.12. Properties
	 	 	31	 
	SECTION 3.13. Compliance with Laws
	 	 	31	 
	SECTION 3.14. Investment Company Status
	 	 	31	 
	SECTION 3.15. Disclosure
	 	 	31	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	Conditions
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Effective Date
	 	 	32	 
	SECTION 4.02. Each Borrowing
	 	 	33	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	Affirmative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Corporate Existence
	 	 	33	 
	SECTION 5.02. Maintenance
	 	 	33	 
	SECTION 5.03. Taxes
	 	 	34	 
	SECTION 5.04. Insurance
	 	 	34	 
	SECTION 5.05. Financial Reports and Other Information
	 	 	34	 
	SECTION 5.06. Books and Records; Inspection Rights
	 	 	35	 
	SECTION 5.07. Compliance with Laws
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	Negative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 6.01. Indebtedness
	 	 	36	 
	SECTION 6.02. Liens
	 	 	36	 
	SECTION 6.03. Sale and Leaseback Transactions
	 	 	37	 
	SECTION 6.04. Fundamental Changes
	 	 	38	 
	SECTION 6.05. Use of Proceeds
	 	 	38	 
	SECTION 6.06. Interest Expense Coverage Ratio
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	Events of Default
	 	 	 	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	The Agent
	 	 	 	 












 



v


	 	 	 	 	 
	 	 	Page
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	Miscellaneous
	 	 	 	 
	 
	 	 	 	 
	SECTION 9.01. Notices
	 	 	43	 
	SECTION 9.02. Waivers; Amendments
	 	 	44	 
	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	 	 	45	 
	SECTION 9.04. Successors and Assigns
	 	 	46	 
	SECTION 9.05. Survival
	 	 	49	 
	SECTION 9.06. Counterparts; Integration; Effectiveness
	 	 	49	 
	SECTION 9.07. Severability
	 	 	50	 
	SECTION 9.08. Right of Setoff
	 	 	50	 
	SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	50	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	51	 
	SECTION 9.11. Headings
	 	 	51	 
	SECTION 9.12. Confidentiality
	 	 	51	 
	SECTION 9.13. Interest Rate Limitation
	 	 	52	 
	SECTION 9.14. USA Patriot Act
	 	 	52	 
	SECTION 9.15. No Fiduciary Relationship
	 	 	53	 












 



vi


	 	        	 	        	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 2.01

	 	—
	 	Commitments
	Schedule 3.02

	 	—
	 	Significant Subsidiaries
	Schedule 3.07

	 	—
	 	Litigation
	Schedule 3.08

	 	—
	 	Taxes
	Schedule 3.10

	 	—
	 	ERISA
	Schedule 3.11

	 	—
	 	Environmental Matters
	Schedule 6.01

	 	—
	 	Outstanding Indebtedness
	Schedule 6.02

	 	—
	 	Existing Liens
	Schedule 6.03

	 	—
	 	Sale-Leaseback Transactions
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Assignment and Acceptance
	Exhibit B-1

	 	—
	 	Form of Opinion of Gary H. Pilnick, Senior Vice President, General Counsel, Corporate Development and Secretary
	Exhibit B-2

	 	—
	 	Form of Opinion of Kirkland & Ellis LLP, Counsel for the Company
	Exhibit C

	 	—
	 	Form of Compliance Certificate
	Exhibit D

	 	—
	 	Form of Note












 



1



     This 364-DAY CREDIT AGREEMENT (this “Agreement”) dated as of June 13,
2007, among KELLOGG COMPANY (the “Company”), a Delaware corporation; the
LENDERS party hereto; and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.



          The Company (such term and each other capitalized term used and not otherwise defined herein
having the meaning assigned to it in Article I) has requested that the Lenders agree to extend
credit to enable it to borrow on a revolving credit basis on and after the date hereof and at any
time and from time to time prior to the Maturity Date a principal amount not in excess of
$700,000,000 at any time outstanding. The proceeds of such borrowings are to be used to provide
liquidity in connection with the Company’s commercial paper program and for other general corporate
purposes. The Lenders are willing to extend such credit to the Company on the terms and subject to
the conditions herein set forth.



          Accordingly, the parties hereto agree as follows:



ARTICLE I




Definitions




          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:



          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.



          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a)
the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.



          “Administrative Agent” means JPMCB, in its capacity as administrative agent for the Lenders
hereunder, or any successor thereto appointed in accordance with Article VIII.



          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied 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.



          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a









 



2



change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, or the Federal Funds Effective Rate,
respectively.



          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.



          “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an
assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by
the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative
Agent and the Company.



          “Attributable Debt” means, with respect to any Sale-Leaseback Transaction, the present value
(discounted at the rate set forth or implicit in the terms of the lease included in such
Sale-Leaseback Transaction, compounded semiannually) of the total obligations of the lessee for
rental payments (other than amounts required to be paid on account of taxes, maintenance, repairs,
insurance, assessments, utilities, operating and labor costs and other items which do not
constitute payments for property rights or amounts related to contingent rents (such as those based
on sales)) during the remaining term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended). In the case of any lease which is
terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of
the Attributable Debt determined assuming termination upon the first date such lease may be
terminated (in which case the Attributable Debt shall also include the amount of the penalty, but
no rent shall be considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated) or the Attributable Debt determined assuming no such
termination. Any determination of any rate implicit in the terms of the lease included in such
Sale-Leaseback Transaction made in accordance with generally accepted financial practices by the
Company shall absent manifest error be binding and conclusive.



          “Availability Period” means the period from and including the Effective Date to but excluding
the earlier of the Maturity Date and the date of termination of the Commitments.



          “Board” means the Board of Governors of the Federal Reserve System of the United States of
America.



          “Borrowing” means Loans of a single Type, made, converted or continued on the same date and,
in the case of Eurodollar Loans, as to which a single Interest Period is in effect.



          “Borrowing Request” means a request by the Company for a Borrowing in accordance with Section
2.03.









 



3


          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to remain closed; provided that, when used
in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in deposits in Dollars in the London interbank market.



          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or
other amounts under any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified and accounted
for as capital leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance with GAAP.



          “Capital Markets Transaction” means the issuance or sale by the Company or any Subsidiary of
any of its Debt Securities (other than commercial paper, intercompany notes and notes issued under
bank credit facilities) pursuant to (a) a public offering registered under the Securities Act or
(b) a Rule 144A, Regulation S or Regulation D offering under the Securities Act.



          “Change in Control” means (a) any Person or group of Persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the SEC under said Act) of 40% or more in voting
power of the outstanding Voting Stock of the Company or (b) members of the Board of Directors of
the Company on the date hereof plus any additional members of such Board whose nomination for
election to such Board is recommended or approved by a majority of the then current members of such
Board shall at any time fail to constitute a majority of such Board.



          “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any
Lender (or, for purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender’s holding company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of this Agreement.



          “Code” means the Internal Revenue Code of 1986, as amended from time to time.



          “Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans
pursuant to Section 2.01(a) expressed as an amount representing the maximum aggregate permitted
amount of such Lender’s Credit Exposure hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such









 



4



Lender shall have assumed its Commitment, as applicable. The aggregate amount of the
Commitments on the date hereof is $700,000,000.



          “Company” means Kellogg Company, a Delaware corporation.



          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus,
without duplication and to the extent deducted in determining such Consolidated Net Income, the sum
of (i) consolidated interest expense for such period, (ii) consolidated income tax expense
(including, without duplication, foreign withholding taxes and any state single business unitary or
other similar taxes) for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) any non-cash charges for such period, (v) fees and expenses
incurred in connection with the Transactions, (vi) fees and expenses in an aggregate amount for any
fiscal year not in excess of $20,000,000 incurred in connection with the issuance of any
Indebtedness or equity, acquisitions, investments or asset sales or divestitures permitted
hereunder and (vii) any (A) cash charges in an aggregate amount for any fiscal year not in excess
of $50,000,000 or (B) any noncash charges, in each case arising out of the restructuring,
consolidation, severance or discontinuance of any portion of the operations, employees and/or
management of any entities or businesses of the Company or any of the Subsidiaries, determined
without giving effect to any extraordinary gains or losses for such period to the extent included
in determining Consolidated Net Income, all determined on a consolidated basis in accordance with
GAAP.



          “Consolidated Interest Expense” means, for any period, the sum of (a) the cash interest
expense (including imputed interest expense in respect of Capital Lease Obligations) of the Company
and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP,
and (b) any interest accrued during such period in respect of Indebtedness of the Company or any
Subsidiary that is required to be capitalized rather than included in consolidated interest expense
for such period in accordance with GAAP; provided that there shall be excluded from Consolidated
Interest Expense (i) any fees paid to the Administrative Agent and (ii) any payments made to obtain
any interest rate hedging agreements; and provided further, solely for purposes of determining
compliance with Section 6.06, in the event the Company or any Subsidiary acquired any Person or
line of business during the relevant period, Consolidated Interest Expense will be determined
giving pro forma effect to any incurrence of Indebtedness related to such acquisition as if such
incurrence of Indebtedness had occurred on the first day of the relevant period.



          “Consolidated Net Income” means, for any period, the net income or loss of the Company and the
Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided
that (a) there shall be excluded the income of any Person (other than the Company) in which any
other Person (other than the Company or any Subsidiary or any director holding qualifying shares or
other third parties holding nominal amounts of shares, as required by or in compliance with
applicable law) owns an Equity Interest, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of the Subsidiaries during such period, and (b)
solely for purposes of determining compliance with Section 6.06, in the event the Company or









 



5



any Subsidiary acquired any Person or line of business during the relevant period,
Consolidated Net Income will be determined giving pro forma effect to such acquisition as if such
acquisition and any related incurrence of Indebtedness had occurred on the first day of the
relevant period, but shall not take into account any cost savings projected to be realized as a
result of such acquisition other than cost savings permitted to be included under Regulation S-X of
the Securities and Exchange Commission.



          “Consolidated Net Sales” means, for any period, the net sales of the Company and the
Subsidiaries for such period, as reported as a line item in the Company’s income statements as
filed with the Company’s Form 10-Q Report or Form 10-K Report, as applicable.



          “Consolidated Total Assets” means the total assets of the Company and its Subsidiaries
determined in accordance with GAAP; provided that for purposes of determining compliance with
Sections 6.01, 6.02 and 6.03, in the event the Company or any Subsidiary acquires any Person or
line of business after the fiscal quarter end referred to in such Section, “Consolidated Total
Assets” as of such fiscal quarter end shall be deemed to include the assets of such Person or line
of business from and after the date of such acquisition.



          “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.



          “Controlled Group” means all of a controlled group of corporations and all trades and
businesses (whether or not incorporated) under common control that, together with the Company or
any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.



          “Credit Exposure” means, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding Loans of such Lender.



          “Debt Securities” means any bonds, debentures, notes, hybrid or equity-linked or other similar
instruments.



          “Default” means any event or condition which constitutes an Event of Default or which upon
notice, lapse of time or both would, unless cured or waived, become an Event of Default.



          “Dollars or “$”” refers to lawful money of the United States of America.



          “Effective Date” means the date on which the conditions set forth in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).



          “Environmental Laws” means all federal, state, local and foreign statutes, laws (including
common law), regulations, ordinances, judgments, permits and other governmental rules or
restrictions relating to human health, safety (including









 



6



occupational safety and health standards), and protection of the environment or to emissions,
discharges or releases of pollutants, contaminants, hazardous substances or wastes into the
environment, including ambient air, surface or ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the cleanup or other remediation
thereof.



          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Company or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Laws, (b) the generation, use, handling, transportation, storage, treatment or
disposal 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 shares of capital stock, partnership interests, membership interests
in a limited liability company, beneficial interests in a trust or other equity ownership interests
in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.



          “ERISA” has the meaning assigned to such term in Section 3.10.



          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.



          “Eurodollar Loan” means any Loan bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.



          “Event of Default” has the meaning assigned to such term in Article VII.



          “Excluded Taxes” means, with respect to the Administrative Agent or any Lender or any other
recipient of any payment to be made by or on account of any obligation of the Company hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction,
(c) in the case of a Foreign Lender, any withholding tax imposed by the United States of America
that is in effect and would apply to amounts payable by the Company from an office within such
jurisdiction to the lending office of such Lender at the time such Lender becomes a party to this
Agreement (or designates a new lending office) and (d) any withholding tax that is attributable to
such Lender’s failure to comply with Section 2.14(e), except, in the case of clause (c) above, to
the extent that (i) such Lender (or its assignor, if any) was entitled, at the time of designation
of a new lending office (or assignment), to receive additional amounts from the Company with
respect to any withholding tax pursuant to Section 2.14, or (ii) such withholding tax shall have
resulted from the making of any payment to a









 



7



location other than the office designated by the Administrative Agent or such Lender for the
receipt of payments of the applicable type.



          “Existing Credit Agreement” means the amended and restated five-year credit agreement dated as
of November 10, 2006, among the Company; the borrowing subsidiaries party thereto; the lenders
party thereto; JPMBC, as administrative agent, J.P. Morgan Europe Limited, as London agent;
JPMorgan Chase Bank, N.A., Toronto branch, as Canadian agent; J.P. Morgan Australia Limited, as
Australian Agent; Barclays Bank PLC, as syndication agent and Bank of America, N.A., Citibank, N.A.
and SunTrust Bank, as co-documentation agents.



          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it.



          “Financed Portion” means, at any time, with respect to a Securitization, the greatest amount
of the claims of the parties providing financing (whether through direct purchases of receivables
or interests therein or through other financing arrangements), however evidenced, including direct
claims on collections of a party providing financing and including debt or equity interests or
securities (other than any seller’s interests retained by any wholly owned Subsidiary) of a
purchasing vehicle, permitted to be outstanding at such time under such Securitization (assuming
the satisfaction of all conditions to issuance) or, if greater, the maximum purchase limit, however
denominated, under such Securitization.



          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of the Company.



          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other
than that in which the Company is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.



          “GAAP” means generally accepted accounting principles in the United States of America or, when
reference is made to another jurisdiction, generally accepted accounting principles in effect from
time to time in such jurisdiction.



          “Governmental Authority” means the government of the United States of America or any other
nation or 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.









 



8


          “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not
include (i) endorsements for collection or deposit, (ii) standard contractual indemnities not
related to the borrowing of money or Indebtedness, in each case in the ordinary course of business,
or (iii) recourse at customary levels in connection with Securitizations accounted for as sales.
The amount of any Guarantee of any guaranteeing Person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made and (b) the maximum amount for which such guaranteeing Person may be liable
pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guaranteeing Person may be liable are not stated or
determinable, in which case the amount of such Guarantee shall be such guaranteeing Person’s
maximum reasonably anticipated liability (assuming such Person is required to perform) in respect
thereof as determined by such Person in good faith.



          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Laws.



          “Hedging Agreement” means any interest rate protection agreement, foreign currency exchange
agreement, currency swap agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement. The “principal amount” of any
Hedging Agreement of the Company or any Subsidiary at any time shall be deemed to be the aggregate
amount at such time of the payments that would be required to be made by the Company or such
Subsidiary in the event of any early termination at such time of such Hedging Agreement.



          “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding









 



9



current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of letters of credit and
letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other relationship
with such entity, except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor. Indebtedness shall not include trade payables and accrued expenses arising in
the ordinary course of business.



          “Indemnified Taxes” means Taxes other than Excluded Taxes.



          “Interest Election Request” means a request by the Company to convert or continue a Borrowing
in accordance with Section 2.05.



          “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March,
June, September and December, and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.



          “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the date seven days thereafter or on the numerically
corresponding day in the calendar month that is one, two, three or six months thereafter, as the
Company may elect, or any other period agreed to by the Company and each Lender, provided, that (i)
if any Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day and (ii) any Interest Period of more
than seven days’ duration pertaining to a Eurodollar Borrowing that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.



          “JPMCB” means JPMorgan Chase Bank, N.A. and it successors.









 



10


          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have
become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance.



          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate
per annum determined by the Administrative Agent at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in Dollars (as reflected on the applicable Telerate screen), for a
period equal to such Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall be the
average (rounded upward, if necessary, to the next 1/100 of 1%) of the respective interest rates
per annum at which deposits in the currency of such Borrowing are offered for such Interest Period
to major banks in the London interbank market by JPMCB at approximately 11:00 a.m., London time, on
the Quotation Day for such Interest Period.



          “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.



          “Loan Documents” means this Agreement and each promissory note delivered pursuant to this
Agreement, as such documents may be amended, modified, supplemented or restated from time to time.



          “Loan” means the loans made pursuant to Sections 2.01, 2.02 and 2.03.



          “Margin Stock” means “margin stock” as defined in Regulation U of the Board of Governors of
the Federal Reserve System.



          “Material Adverse Effect” means (a) any condition or change that has affected or would
reasonably be expected to affect materially and adversely the business, assets, liabilities or
financial condition of the Company and the Subsidiaries taken as a whole or (b) a material adverse
effect on the rights of or benefits available to the Administrative Agent or the Lenders under any
Loan Document.



          “Maturity Date” means June 11, 2008.



          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of
such event, including any cash subsequently received in respect of any non-cash proceeds, but only
as and when received, net of (b) the sum of (i) all customary fees, discounts, commissions, costs,
expenses of currency conversion to the extent such proceeds are paid in a currency other than
Dollars and other out-of-pocket expenses paid by the Company and the Subsidiaries to third parties
in connection with









 



11



such event and (ii) the amount of all taxes paid (or estimated in good faith to be payable) by
the Company and the Subsidiaries during the year that such event occurred or the next succeeding
year and that are directly attributable to such event.



          “Other Taxes” means any and all present or future recording, stamp, documentary, excise,
transfer, sales, property or similar taxes, charges or levies arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to,
any Loan Document.



          “PBGC” has the meaning assigned to such term in Section 3.10.



          “Permitted Encumbrances” means:




     (a) Liens imposed by law for taxes, assessments or other governmental charges that are
not yet due or are being contested in compliance with Section 5.03;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s 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, are in de minimis amounts or are
being contested in good faith and by appropriate proceedings with adequate reserves under
GAAP being provided therefor;




     (c) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance, health insurance and other social security
laws or regulations and withholding taxes;




     (d) deposits 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 that do not constitute an Event of Default
under clause (j) of Article VII;




     (f) easements, zoning restrictions, rights-of-way, minor defects or irregularities in
title and similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not interfere with
the ordinary conduct of business of the Company or any Subsidiary;




     (g) rights of set-off in favor of financial institutions (other than in respect of
amounts deposited to secure Indebtedness);




     (h) liens in the nature of trustee’s liens granted pursuant to any indenture securing
obligations to pay compensation to such trustee, to reimburse its expenses and to indemnify
it under the terms thereof;









 



12



     (i) licenses, leases or subleases (other than Capital Leases and other financing
leases) granted to third parties (other than to secure Indebtedness) not interfering in any
material respect with the business of the Company or any Subsidiary;




     (j) liens arising in connection with contracts with or made at the request of the
United States of America, any State of the United States of America or any department,
agency or instrumentality of the foregoing; and




     (k) liens arising from deposits with or the giving of any form of security to any
Governmental Authority required as a condition to the transaction of business or exercise
of any privilege, franchise or license;


provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness,
except for deposits specifically referenced in clauses (c), (d) and (k) hereof.




          “Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.



          “Plan” means, for the Company and each Subsidiary at any time, an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and either (a) is maintained by a member of the Controlled Group for
employees of a member of the Controlled Group, (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years made contributions, or
(c) under which a member of the Controlled Group has any liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any
time during the preceding five years or by reason of being deemed a contributing sponsor under
Section 4069 of ERISA.



          “Prime Rate” means the rate of interest per annum publicly announced from time to time by
JPMCB as its prime rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective from and including the date such change is publicly announced as
being effective.



          “Property” means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, whether now owned or hereafter acquired.



          “Quotation Day” means, with respect to any Eurodollar Borrowing and any Interest Period, the
day on which it is market practice in the relevant interbank market for prime banks to give
quotations for deposits in the currency of such Borrowing for delivery on the first day of such
Interest Period. If such quotations would normally be given by prime banks on more than one day,
the Quotation Day will be the last of such days.









 



13


          “Register” has the meaning set forth in Section 9.04.



          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and
the respective directors, officers, employees, agents and advisors of such Person and such Person’s
Affiliates.



          “Required Lenders” means, at any time, Lenders having Credit Exposures and unused Commitments
representing more than 50% of the sum of the total Credit Exposures and unused Commitments at such
time.



          “Sale-Leaseback Transaction” means any arrangement whereby the Company or a Subsidiary shall
sell or transfer any property, real or personal, used or useful in its business, whether now owned
or hereinafter acquired, and thereafter rent or lease property that it intends to use for
substantially the same purpose or purposes as the property sold or transferred; provided that any
such arrangement (a) involving no party other than the Company and any Wholly Owned Subsidiary or
(b) entered into within 180 days after the acquisition, construction or substantial improvement of
the subject property shall not be deemed to be a “Sale-Leaseback Transaction”.



          “SEC” means the Securities and Exchange Commission or any successor.



          “Securitization” means the transfer or pledge of accounts receivable or interests in accounts
receivable (a) to a trust, partnership, corporation or other entity, which transfer or pledge is
funded by such entity in whole or in part by the issuance to one or more lenders or investors of
indebtedness or securities that are paid principally from the cash flow derived from such accounts
receivable or interests in accounts receivable, or (b) directly to an investor or other purchaser.



          “Securities Act” means the Securities Act of 1933, as amended.



          “Significant Subsidiary” means (a) any Subsidiary that directly owns or Controls any other
Significant Subsidiary, (b) each Subsidiary identified as a Significant Subsidiary on Schedule
3.02, (c) any Subsidiary designated from time to time by the Company as a Significant Subsidiary by
written notice to the Administrative Agent and (d) any other Subsidiary (i) the consolidated net
sales of which were greater than 5% of the Company’s Consolidated Net Sales as of the last day of
the most recent fiscal period for which financial statements have been delivered pursuant to
Section 5.05(a) or (b) (or, prior to the first delivery of such financial statements, greater than
5% of the consolidated net sales of the Person in whose financial statements such Subsidiary is
included in the most recent financial statements referred to in Section 3.05(a) or (b)) or (ii) the
consolidated assets of which as of the last day of such fiscal period were greater than 5% of
Consolidated Total Assets as of such date (or, prior to the first delivery of such financial
statements, greater than 5% of the consolidated total assets of the Person in whose financial
statements such Subsidiary is included in the most recent financial statements referred to in
Section 3.05(a) or (b)). The Company will not permit the total consolidated assets or the
consolidated net sales of the Significant Subsidiaries (together with the directly owned assets of
the Company) to at any time represent less than 90% of









 



14



Consolidated Total Assets or Consolidated Net Sales of the Company and its Subsidiaries,
respectively, in each case as of and for the period of four fiscal quarters ended on the last day
of the most recent fiscal period for which financial statements have been delivered pursuant to
Section 5.05(a) or (b) (or, prior to the first delivery of such financial statements, the
consolidated total assets or consolidated net sales as of such date or for such period of the
Persons in whose financial statements the Significant Subsidiaries are included in the most recent
financial statements referred to in Section 3.05(a) or (b)). For purposes of making the
determinations required by this definition, net sales and assets of foreign Subsidiaries shall be
converted into Dollars at the rates used in preparing the consolidated balance sheet of the Company
(or, prior to the first delivery of financial statements pursuant to Section 5.05(a) or (b), the
Person in whose financial statements such foreign Subsidiary is included in the most recent
financial statements referred to in Section 3.05(a) or (b)) included in the applicable financial
statements.



          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is
the number one and the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is subject, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.



          “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such
date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.



          “Subsidiary” means any direct or indirect subsidiary of the Company.



          “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.



          “Transactions” means the execution, delivery and performance by the Company of this Agreement
and the other Loan Documents in connection therewith, the









 



15



borrowing of Loans, the use of the proceeds thereof and the other transactions contemplated in
connection therewith.



          “Type” when used in respect of any Loan or Borrowing, refers to the Rate (as defined therein)
by reference to which interest on such Loan or on the Loans comprising such Borrowing is
determined. For purposes hereof, “Rate” shall include Adjusted LIBO Rate and the Alternate
Base Rate.



          “Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable accrued benefits under such Plan exceeds (b) the
fair market value of all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess represents a potential
liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.



          “Voting Stock” of any Person means capital stock of any class of classes or other Equity
Interests (however designated) having ordinary voting power for the election of directors or the
equivalent governing body of such Person, other than stock or other Equity Interests having such
power only by reason of happening of a contingency.



          “Welfare Plan” means a “welfare plan” as defined in Section 3(l) of ERISA.



          “Wholly Owned Subsidiary” means any Subsidiary all the Equity Interests in which, other than
directors’ qualifying shares and/or other nominal amounts of Equity Interests that are required to
be held by Persons (other than the Company or its Wholly Owned Subsidiaries, as applicable) under
applicable law, are owned, directly or indirectly, by the Company.



          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans
and Borrowings may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a
“Eurodollar Borrowing”).



          SECTION 1.03. 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 (a) any definition of or reference to any agreement, instrument or other
document herein 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), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) 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, (d) all references herein to
Articles, Sections, Exhibits and









 



16



Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Agreement and (e) 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. Each reference herein to the “knowledge”
of the Company or any Subsidiary shall be deemed to be a reference to the knowledge of any member
of senior management of the Company or such Subsidiary, any Financial Officer and, in the case of
any reference to knowledge of any specific subject matter, the senior manager of the department or
office of the Company responsible for such matter.



          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect
from time to time; provided that, if the Company notifies the Administrative Agent that the Company
requests an amendment to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Company that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in accordance herewith.



          SECTION 1.05. Determinations Made in Good Faith. All determinations hereunder made by any
party hereto shall be made in good faith.



ARTICLE II




The Credits




          SECTION 2.01. Commitments. (a) Subject to the terms and conditions set forth herein, each
Lender agrees to make Loans to the Company from time to time during the Availability Period in
Dollars in an aggregate principal amount that will not result in (i) such Lender’s Credit Exposure
exceeding such Lender’s Commitment or (ii) the sum of the total Credit Exposures exceeding the
total Commitments.



          (b) Within the foregoing limits and subject to the terms and conditions set forth herein, the
Company may borrow, prepay and reborrow Loans during the Availability Period.



          SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders (or their Affiliates as provided in paragraph (b) below)
ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.









 



17


          (b) Subject to Section 2.11, each Borrowing shall be comprised entirely of Eurodollar Loans
or ABR Loans, as the Company may request in accordance herewith. Each Lender at its option may
make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation of the Company to
repay such Loan in accordance with the terms of this Agreement.



          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be an integral multiple of $5,000,000 and not less than $25,000,000. At the time that each
ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple
of $1,000,000 and not less than $5,000,000; provided that an ABR Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitments.



          (d) Notwithstanding any other provision of this Agreement, the Company shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.



          SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Company shall notify the
Administrative Agent of such request by telephone or by telecopy (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of
the proposed Borrowing and (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the Business Day of the proposed Borrowing. Each such Borrowing Request shall be
irrevocable and, if telephonic, shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form agreed to by the Administrative Agent
and the Company and signed by the Company. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:




     (i) the aggregate amount of the requested Borrowing;




     (ii) the date of such Borrowing, which shall be a Business Day;




     (iii) the Type of the requested Borrowing;




     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and




     (v) the location and number of the Company’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Company shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each








 



18


Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.




          SECTION 2.04. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available funds in the
applicable currency by 1:00 p.m., New York City time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the applicable Lenders. The
Administrative Agent will make such Loans available to the Company by promptly crediting the
amounts so received, in like funds, to an account of the Company maintained with the Administrative
Agent in New York City, and designated by the Company in the applicable Borrowing Request.



          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Company 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 Company severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Company to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of (x)
the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation or (ii) in the case of the
Company, the interest rate applicable to such Borrowing. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.



          SECTION 2.05. Interest Elections. (a) Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request. The Company may elect
different options with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and any Loans resulting from an election made with respect to any such portion shall be
considered a separate Borrowing. Notwithstanding any other provision of this Section, no Borrowing
may be converted into or continued as a Borrowing with an Interest Period ending after the Maturity
Date.



          (b) To make an election pursuant to this Section, the Company shall notify the Administrative
Agent of such election by telephone or by telecopy by the time and date that a Borrowing Request
would be required under Section 2.03 if the Company were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election. Each such Interest
Election Request shall be irrevocable and, if telephonic, shall be confirmed promptly by hand
delivery or telecopy to the









 



19



Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Company. Notwithstanding any other provision of this
Section, the Company shall not be permitted to elect an Interest Period for Eurodollar Loans that
does not comply with Section 2.02(d).



          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:




     (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);




     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurodollar Borrowing, but does not specify an
Interest Period, then the Company shall be deemed to have selected an Interest Period of one
month’s duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.



          (e) If a Company fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period, such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Company, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.



          SECTION 2.06. Termination and Reduction of Commitments; (a) Unless previously terminated,
the Commitments shall terminate on the Maturity Date.



          (b) The Company may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an









 



20



amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.08, the sum of the Credit Exposures would
exceed the sum of the Commitments.



          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
the Company or any Subsidiary in respect of any Capital Markets Transaction, (i) the Company shall,
within thirty Business Days after such Net Proceeds are received, deliver to the Administrative
Agent a certificate of a Financial Officer of the Company setting forth the amount of the Net
Proceeds received from such event and (ii) the Commitments of the Lenders shall be permanently
reduced in an aggregate amount equal to such Net Proceeds.



          (d) The Company shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. The Company shall notify the Administrative Agent of any reduction of the Commitments
under paragraph (c) of this Section on or promptly after the effective date of such reduction,
specifying the effective date thereof. Promptly following receipt of any such notice, the
Administrative Agent shall advise the applicable Lenders of the contents thereof. Each notice
delivered by the Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments pursuant to paragraph (b) of this Section may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Company (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments.



          SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The Company hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the unpaid principal
amount of each Loan on the Maturity Date.



          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of the Company to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest paid to such Lender from time to time
hereunder.



          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period, if any, applicable thereto,
and (ii) the amount of any sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender’s share thereof.



          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the









 



21



obligations recorded therein; provided that the failure of the Administrative Agent or any
Lender to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Company to repay the Loans in accordance with the terms of this Agreement.



          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Company shall execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in
substantially the form attached hereto as Exhibit D. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).



          SECTION 2.08. Prepayment of Loans. (a) The Company shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (d) of this Section and payment of any amounts required under Section
2.13.



          (b) On the date of any reduction of the Commitments pursuant to Section 2.06(b) or 2.06(c),
the Company shall prepay Borrowings to the extent necessary in order that the aggregate Credit
Exposures will not exceed the aggregate Commitments after giving effect to such reduction.



          (c) Prior to any optional or mandatory prepayment of Borrowings, the Company shall select the
Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (d) below.



          (d) The Company shall notify the Administrative Agent by telephone (confirmed by telecopy) or
by telecopy of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment,
or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, on the Business Day of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.06, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with Section 2.06. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.









 



22


          SECTION 2.09. Fees. (a) The Company agrees to pay to the Administrative Agent, for the
account of each Lender, a facility fee, which shall accrue at a rate equal to .045% per annum on
the daily amount of the Commitment of such Lender (whether used or unused) during the period from
and including the date of this Agreement to but excluding the Maturity Date; provided that, if such
Lender continues to have any Credit Exposure after the Maturity Date, then such facility fee shall
continue to accrue on the daily amount of such Lender’s Credit Exposure from and including the
Maturity Date to but excluding the date on which such Lender ceases to have any Credit Exposure.
Accrued facility fees shall be payable in arrears on the last day of March, June, September and
December of each year, on any date prior to the Maturity Date on which all the Commitments shall
have terminated and on the Maturity Date, commencing on the first such date to occur after the date
hereof; provided that any facility fees accruing after the Maturity Date shall be payable on
demand. All facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but excluding the last day).



          (b) The Company agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Company and the Administrative
Agent.



          (c) All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for its own account or, in the case of facility fees, for
distribution to the Lenders. Fees paid shall not be refundable under any circumstances.



          SECTION 2.10. Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate.



          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus (i) .255% per annum for each day on
which the aggregate Credit Exposures are greater than 50% of the aggregate Commitments and (ii)
        .205% per annum for each other day.



          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Company hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% per
annum plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section or (ii) in the case of any other amount, 2% per annum plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.



          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued









 



23



interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to
the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on
the effective date of such conversion.



          (e) All interest hereunder shall be computed on the basis of a year of 360 days, and shall be
payable for the actual number of days elapsed (including the first day but excluding the last day).
The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.



          SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:




     (a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
LIBO Rate for such Interest Period; or




     (b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate for
such Interest Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Company and the Lenders by telephone
or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the
Company and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective, and such Borrowing shall be converted to
or continued on the last day of the Interest Period applicable thereto as an ABR Borrowing and (ii)
if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing (or such Borrowing shall not be made if the Company revokes (and in such circumstances,
such Borrowing Request may be revoked notwithstanding any other provision of this Agreement) such
Borrowing Request by telephonic notice, confirmed promptly in writing, not later than one Business
Day prior to the proposed date of such Borrowing).




          SECTION 2.12. Increased Costs. (a) If any Change in Law shall:




     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except to the extent any such reserve requirement is reflected in the Adjusted
LIBO Rate); or




     (ii) impose on any Lender any other condition affecting this Agreement or Eurodollar
Loans;









 



24

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan, or to increase the cost to such Lender or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender, as the case may be, such additional amount or
amounts as will compensate such Lender, as the case may be, on an after-tax basis for such
additional costs incurred or reduction suffered.




          (b) If any Lender determines that any Change in Law regarding such Lender’s capital
requirements has or would have the effect of reducing the rate of return on such Lender’s capital
or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or
the Loans made by, such Lender, to a level below that which such Lender or such Lender’s holding
company could have achieved but for such Change in Law (taking into consideration such Lender’s,
policies and the policies of such Lender’s holding company with respect to capital adequacy), then
from time to time the Company will pay to such Lender, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction suffered.



          (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate
such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section, together with supporting documentation or computations, shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay such Lender the
amount shown as due on any such certificate within 10 Business Days after receipt thereof.



          (d) Failure or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Company shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that such Lender
notifies the Company of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.



          SECTION 2.13. Break Funding Payments. In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.08(d) and is revoked in accordance therewith),
or (d) the assignment of any Eurodollar Loan or the right to receive payment other than on the last
day of the Interest Period, applicable thereto as a result of a request by the Company pursuant to
Section 2.16, then, in any such event, the Company shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have









 



25



accrued on the principal amount of such Loan had such event not occurred at the Adjusted LIBO
Rate that would have been applicable to such Loan for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of such period, for
deposits in Dollars of a comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section, together with supporting documentation or computations, shall be
delivered to the Company and shall be conclusive absent manifest error. The Company shall pay such
Lender the amount shown as due on any such certificate within 10 Business Days after receipt
thereof.



          SECTION 2.14. Taxes. (a) Any and all payments by or on account of any obligation of the
Company hereunder or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Company shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions of Indemnified Taxes or
Other Taxes (including deductions applicable to additional sums payable under this Section) the
Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Company shall make such deductions and
(iii) the Company shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.



          (b) In addition, the Company shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.



          (c) The Company shall indemnify the Administrative Agent and each Lender within 10 Business
Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent, or such Lender, on or with respect to any payment by or on
account of any obligation of the Company hereunder or under any other Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail
the amount and nature of such payment or liability delivered to the Company by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest
error.



          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Company to a Governmental Authority, the Company shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such









 



26



payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.



          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Company is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Company
(with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or reasonably requested
by the Company as will permit such payments to be made without withholding or at a reduced rate.



          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by a Company or
with respect to which a Company has paid additional amounts pursuant to this Section 2.14, it shall
pay over such refund to the Company (but only to the extent of indemnity payments made, or
additional amounts paid, by the Company under this Section 2.14 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Company, upon the request of
Administrative Agent or such Lender, agree to repay the amount paid over to the Company (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Company or any other Person.



          SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The Company
shall make each payment required to be made by it hereunder or under any other Loan Document
(whether of principal, interest or fees, amounts payable under Section 2.12, 2.13 or 2.14, or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent to the account specified by it from time to time for such purpose for the
account of the applicable Lenders. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in Dollars. Any payment required to be made by
the Administrative Agent hereunder shall be deemed to have been made by the time required if the
Administrative Agent shall, at or before such time, have taken the necessary steps









 



27



to make such payment in accordance with the regulations or operating procedures of the
clearing or settlement system used by the Administrative Agent to make such payment.



          (b) If at any time insufficient funds are received by and available to the Administrative
Agent from the Company to pay fully all amounts of principal, interest and fees then due from the
Company hereunder, such funds shall be applied (i) first, towards payment of interest and fees then
due from the Company hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards payment of
principal of the Loans then due from the Company hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.



          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans, resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the Loans and accrued
interest of other Lenders to the extent necessary 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, provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any payment made by the
Company pursuant to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a participation in any of
its Loans to any assignee or participant, other than to the Company or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). The Company 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 the Company
rights of set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Company in the amount of such participation.



          (d) Unless the Administrative Agent shall have received notice from the Company prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders
hereunder that the Company will not make such payment, the Administrative Agent may assume that the
Company has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the Company has not in
fact made such payment, then each of the Lenders severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender 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 greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation.









 



28


          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(b) or paragraph (d) of this Section 2.15, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid.



          SECTION 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests
compensation under Section 2.12, or if the Company is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then
such Lender 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 reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or 2.14 as the
case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.



          (b) If any Lender requests compensation under Section 2.12, or if the Company is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Company 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 Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company shall have received the
prior written consent of the Administrative Agent, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.12 or payments required to be
made pursuant to Section 2.14, such assignment will result in a material reduction in such
compensation, payments or additional interest.



ARTICLE III




Representations and Warranties




          The Company represents and warrants to the Lenders that:



          SECTION 3.01. Organization and Qualification. The Company is duly organized, validly
existing and in good standing (to the extent such concept is relevant to









 



29



such Person in its jurisdiction of organization) under the laws of the jurisdiction of its
organization, has full and adequate corporate power to carry on its business as now conducted, and
is duly licensed or qualified and, to the extent relevant, in good standing in each jurisdiction in
which the nature of the business transacted by it or the nature of the Property owned or leased by
it makes such licensing or qualification necessary, except where such failure to be so licensed or
qualified and in good standing would not have a Material Adverse Effect.



          SECTION 3.02. Subsidiaries. Each Significant Subsidiary is duly organized, validly existing
and in good standing (to the extent such concept is relevant to such Person in its jurisdiction of
organization) under the laws of the jurisdiction of its organization, has the requisite power to
carry on its business as now conducted, and is duly licensed or qualified and in good standing in
each jurisdiction in which the nature of the business transacted by it or the nature of the
Property owned or leased by it makes such licensing or qualification necessary, except where such
failure would not have a Material Adverse Effect. All the issued and outstanding Equity Interests
in each Significant Subsidiary are validly issued and outstanding and fully paid and nonassessable
and all such shares owned by the Company or a Subsidiary are owned, beneficially and of record, by
the Company or such Subsidiary, free of any Lien other than Permitted Encumbrances. The
Significant Subsidiaries as of the date hereof are listed on Schedule 3.02.



          SECTION 3.03. Corporate Authority and Validity of Obligations. The Company has the requisite
right and authority to consummate the Transactions, to enter into this Agreement and each other
Loan Document to which it is a party, to make the Borrowings herein provided for, to issue its
notes in evidence thereof and to perform all of its obligations hereunder and under each other Loan
Document to which it is a party; each of the Transactions has been duly authorized by the Company
and the execution, delivery and performance of this Agreement and the other Loan Documents have
been duly authorized by all necessary corporate, company or partnership action by the Company and
constitute valid and binding obligations of the Company enforceable in accordance with their terms;
and none of the Transactions, this Agreement, the other Loan Documents and the performance or
observance by the Company or any Subsidiary of any of the matters or things herein or therein
provided for contravene any provision of law or judgment or any charter or by-law provision of the
Company or any material covenant, indenture or agreement of or affecting the Company or a
substantial portion of any of their respective Properties.



          SECTION 3.04. Margin Stock. None of the Company nor any of its Subsidiaries is engaged
principally, or as one of its primary activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and neither the Company nor any of the Subsidiaries
will use the proceeds of any Loan in a manner that violates any provision of Regulation U or X of
the Board of Governors of the Federal Reserve System.



          SECTION 3.05. Financial Reports. The consolidated balance sheet of the Company and the
Subsidiaries and the related consolidated statements of earnings,









 



30



shareholders’ equity and cash flows of the Company and the Subsidiaries and accompanying notes
thereto as at December 30, 2006, and for the year then ended, which financial statements are
accompanied by the report of PricewaterhouseCoopers LLP, fairly present in all material respects
the consolidated financial condition of the Company and the Subsidiaries as at such date and their
consolidated results of operations, shareholders’ equity and cash flows for the period then ended
in conformity with GAAP.



          SECTION 3.06. No Material Adverse Change. Since December 30, 2006, there has not occurred or
become known any condition or change that has affected or would reasonably be expected to affect
materially and adversely the business, assets, liabilities or financial condition of the Company,
and its Subsidiaries taken as a whole.



          SECTION 3.07. Litigation. There is no litigation or governmental proceeding pending, or to
the knowledge of the Company threatened, against the Company or any Subsidiary (a) as to which
there is a reasonable possibility of an adverse determination and that, if adversely determined,
would reasonably be expected to impair the validity or enforceability of, or materially impair the
ability of the Company to perform its obligations under, this Agreement or any other Loan Document
or (b) except as disclosed on Schedule 3.07 or in the Company’s Form 10-Ks and 10-Qs filed with the
SEC covering periods through December 30, 2006, would reasonably be expected to result in any
Material Adverse Effect.



          SECTION 3.08. Tax Returns. Except as set forth on Schedule 3.08, the Company has filed
consolidated United States federal income tax returns for all taxable years ended on or before
December 31, 2005, and such returns of the Company for the taxable year ended January 3, 2004 and
all taxable years ended before such date have been examined and approved by the Internal Revenue
Service as filed, and any additional assessments for any such year have been paid or the applicable
statute of limitations therefor has expired. There are no assessments pending for the consolidated
United States federal income tax returns of the Company and the Subsidiaries of a material nature
for any taxable year ended after January 3, 2004, nor to the knowledge of the Company is any such
assessment threatened, other than those provided for by adequate reserves under GAAP.



          SECTION 3.09. Approvals. No authorization, consent, license, exemption, filing or
registration with any court or governmental department, agency or instrumentality, or any other
Person, is necessary to the consummation of the Transactions or the valid execution, delivery or
performance by the Company of this Agreement or any other Loan Document except for those obtained
on or before the Effective Date or those the failure of which to obtain would not individually or
in the aggregate reasonably be expected to have a Material Adverse Effect.



          SECTION 3.10. ERISA. The Company and each Subsidiary are in compliance in all material
respects with the Employee Retirement Income Security Act of 1974 (“ERISA”) to the extent
applicable to them and have received no notice to the contrary from the Pension Benefit Guaranty
Corporation or any successor thereto (“PBGC”). No condition exists or event or transaction has
occurred under or relating to









 



31



any Plan which could reasonably be expected to result in the incurrence by the Company or any
Subsidiary of any material liability, fine or penalty. Except as disclosed on Schedule 3.10 or the
most recent audited consolidated annual financial statements of the Company, neither the Company
nor any Subsidiary has any material contingent liability for any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in Part 6 of Title 1 of
ERISA.



          SECTION 3.11. Environmental Matters. Except as set forth on Schedule 3.11, or except with
respect to any other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of the Company and its Subsidiaries (a) has
failed to comply with any Environmental Laws or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Laws, (b) has become subject to any
liability under any Environmental Laws, (c) has received notice of any claim with respect to any
Environmental Laws or (d) knows of any basis for any liability under any Environmental Laws.



          SECTION 3.12. Properties. (a) Each of the Company and its Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal property material to its business,
subject only to Liens permitted by Section 6.02 and except for defects in title that could not
individually or in the aggregate reasonably be expected to result in a Material Adverse Effect.



          (b) Each of the Company and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by them does not infringe upon the rights of any other Person, except for any such
defects in ownership or license rights or other infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.



          SECTION 3.13. Compliance with Laws. Each of the Company and its Subsidiaries is in
compliance with all laws, regulations and orders of the Food and Drug Administration and each other
Governmental Authority 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.



          SECTION 3.14. Investment Company Status. None of the Company and its Subsidiaries is an
“investment company” as defined in, or subject to regulation under, the Investment Company Act of
1940.



          SECTION 3.15. Disclosure. None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Company to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) 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 misleading; provided that, with respect to projected
financial information, the









 



32



Company represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time (it being understood that such projections are
subject to significant uncertainties and contingencies, many of which are beyond the Company’s
control, and that no assurance can be given that such projections will be realized).



ARTICLE IV




Conditions




          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans hereunder shall
not become effective until the date on which each of the following conditions is satisfied (or
waived in accordance with Section 9.02):




     (a) The Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.




     (b) The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective Date) of
each of (i) Gary H. Pilnick, Senior Vice President, General Counsel, Corporate Development
and Secretary of the Company, substantially in the form of Exhibit B-1, and (ii) Kirkland &
Ellis LLP, counsel for the Company, substantially in the form of Exhibit B-2. The Company
hereby requests such counsel to deliver such opinion.




     (c) The Administrative Agent shall have received such documents and certificates as
the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Company and the authorization of the
Transactions, all in form and substance reasonably satisfactory to the Administrative Agent
and its counsel.




     (d) The Administrative Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of the Company,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section
4.02, with references therein to the date of such Borrowing to be references to the
Effective Date, and without giving effect to the parenthetical in Section 4.02(a).




     (e) The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid on or
prior to the Effective Date by the Company hereunder.









 



33

The Administrative Agent shall notify the Company and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions
is satisfied (or waived pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
June 13, 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).




          SECTION 4.02. Each Borrowing. The obligation of each Lender to make any Loan is subject to
the satisfaction (or waiver in accordance with Section 9.02) of the following conditions:



          (a) The representations and warranties (other than those set forth in Sections 3.06 and 3.07)
of the Company set forth in the Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing.



          (b) At the time of and immediately after giving effect to such Borrowing, no Default shall
have occurred and be continuing.


Each Borrowing shall be deemed to constitute a representation and warranty by the Company on the
date thereof as to the matters specified in paragraphs (a) and (b) of this Section.




ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full, the Company covenants and
agrees with the Lenders as to itself and its subsidiaries that:



          SECTION 5.01. Corporate Existence. The Company shall, and shall cause each Significant
Subsidiary to, preserve and maintain its corporate existence, subject to the provisions of Section
6.04.



          SECTION 5.02. Maintenance. The Company will maintain, preserve and keep its Property
necessary to the proper conduct of its business in reasonably good repair, working order and
condition (ordinary wear and tear and damage by casualty excepted) and will from time to time make
all necessary repairs, renewals, replacements, additions and betterments thereto so that in the
judgment of the Company at all times such Property shall be reasonably preserved and maintained,
and will cause each Significant Subsidiary so to do for Property owned or used by it, except where
the failure of which to maintain or preserve could not reasonably be expected to have a Material
Adverse Effect; provided, however, that nothing in this Section 5.02 shall prevent the Company or a
Significant Subsidiary from discontinuing the operation or maintenance of any such Property if such
discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the
business of the Subsidiary and in the reasonable opinion of the Company is not disadvantageous in
any material respect to the Lenders.









 



34


          SECTION 5.03. Taxes. The Company will duly pay and discharge, and will cause each Subsidiary
to pay and discharge, all material taxes, rates, assessments, fees and governmental charges upon or
against the Company or such Subsidiary or against their respective Property, in each case before
the same becomes delinquent and before penalties accrue thereon, unless and to the extent that (a)
the same is being contested in good faith and by appropriate proceedings and adequate reserves
under GAAP are provided therefor or (b) the same could not reasonably be expected to give rise to a
Lien that would not be permitted under Section 6.02(d).



          SECTION 5.04. Insurance. The Company will insure, and keep insured, and will cause each
Subsidiary to insure, and keep insured, with reputable insurance companies, all insurable Property
owned by it which is of a character usually insured by companies similarly situated and operating
like Property. To the extent usually insured (subject to self-insured retentions) by companies
similarly situated and conducting similar businesses, the Company will also insure, and cause each
Subsidiary to insure, employers’ and public and product liability risks with reputable insurance
companies. The Company will upon request of the Administrative Agent furnish to the Administrative
Agent, for distribution to each Lender, a summary setting forth the nature and extent of the
insurance maintained pursuant to this Section 5.04.



          SECTION 5.05. Financial Reports and Other Information. The Company will, and will cause each
Subsidiary to, maintain a standard system of accounting substantially in accordance with GAAP and
will furnish to the Lenders and their respective duly authorized representatives such information
respecting the business and financial condition of the Company and the Subsidiaries as they may
reasonably request; and without any request will furnish to the Administrative Agent, which will
make available by means of electronic posting to each Lender:




     (a) within 60 days after the end of each of the first three quarterly fiscal periods
of the Company, a copy of the Company’s Form 10-Q Report filed with the SEC;




     (b) within 120 days after the end of each fiscal year of the Company, a copy of the
Company’s Form 10-K Report filed with the SEC, including a copy of the annual report of the
Company and the Subsidiaries for such year with accompanying financial statements, prepared
by the Company and certified by independent public accountants of recognized standing, in
accordance with GAAP;




     (c) promptly after the sending or filing thereof, copies of all proxy statements,
financial statements and reports the Company sends to its shareholders, and copies of all
other regular, periodic and special reports and all registration statements the Company
files with the SEC, or with any national securities exchange;




     (d) promptly following a request therefor, any documentation or other information that
a Lender reasonably requests in order to comply with its ongoing









 



35



obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act; and




     (e) promptly after the Company has knowledge thereof, notice (including a description
in reasonable detail) of the occurrence of any Default or Event of Default.


In addition, in the event that Subsidiaries not constituting Significant Subsidiaries shall at any
time (as a result of any acquisition or disposition of any Person or line of business involving any
party other than the Company and the Subsidiaries or any reorganization of the Company or any
Subsidiaries) represent more than 10% of Consolidated Total Assets or Consolidated Net Sales as of
such date or for such period, the Company will promptly designate additional Significant
Subsidiaries by written notice to the Administrative Agent until such excess has been eliminated.




          Each of the financial statements furnished to the Lenders pursuant to subsections (a) and (b)
of this Section 5.05 shall be accompanied by a compliance certificate in substantially the form of
Exhibit C signed by a Financial Officer of the Company. Each financial statement furnished to the
Lenders pursuant to subsection (b) of this Section 5.05 shall also be accompanied by a certificate
signed by a Financial Officer of the Company confirming compliance with the requirements set forth
in the definition of “Significant Subsidiary” and in the last sentence of the immediately preceding
paragraph, attaching a revised form of Schedule 3.02 showing all additions to and removals from the
Significant Subsidiaries since the date of the most recently delivered form of Schedule 3.02 (or
confirming that there have been no changes from such most recently delivered form of Schedule
3.02). If the Company is no longer required to file Form 10-Q and 10-K Reports with the SEC, the
Company will nevertheless furnish to the Lenders at the time herein above set forth all the
financial and other information that would have comprised such filings.



          Information required to be delivered pursuant to this Section shall be deemed to have been
delivered on the date on which the Company provides notice to the Lenders that such information has
been posted on the Company’s website on the Internet at http://www.kelloggs.com or at the
appropriate Company designated website at http://www.sec.gov or
http://intralinks.com; provided that the Company shall deliver paper copies of the
information referred to in this Section after the date delivery is required thereunder to any
Lender which requests such delivery within 5 Business Days after such request.



          SECTION 5.06. Books and Records; Inspection Rights. The Company will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which in all material respects
full, true and correct entries are made of all dealings and transactions in relation to its
business and activities as consistent with good business practices in the judgment of the Company.
The Company will, and will cause each of its Subsidiaries to, permit any representatives designated
by the Administrative Agent or any Lender, 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









 



36



condition with its independent accountants (upon reasonable notice to the Company and with its
officers permitted to be present at such times) and its officers, all at such reasonable times and
as often as reasonably requested.



          SECTION 5.07. Compliance with Laws. The Company will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of the Food and Drug
Administration and each other Governmental Authority applicable to it or its property, including
all Environmental Laws, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.



ARTICLE VI




Negative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full, the Company covenants and
agrees with the Lenders as to itself and its subsidiaries that:



          SECTION 6.01. Indebtedness. The Company will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist at any time:




     (a) any Indebtedness of the Company secured by any Lien encumbering any asset of the
Company or any Subsidiary (other than Indebtedness of the Company set forth on Schedule
6.01);




     (b) any Indebtedness of any Subsidiary (other than (i) Indebtedness under this
Agreement, (ii) the Indebtedness of any Subsidiary set forth on Schedule 6.01, (iii)
Indebtedness to the Company or any other Wholly Owned Subsidiary and (iv) Indebtedness of
any Person that becomes a Subsidiary after the date hereof that existed at the time such
Person became a Subsidiary and was not created in contemplation of or in connection with
such Person becoming a Subsidiary); or




     (c) any Capital Lease Obligation;


if such creation, incurrence, assumption or existence would result in the sum, without duplication,
of (i) the aggregate principal amount of Indebtedness outstanding under clauses (a), (b) and (c)
above, (ii) the aggregate principal amount of outstanding obligations secured by Liens permitted by
Section 6.02(d), (iii) the aggregate amount of the Financed Portions of all outstanding
Securitizations and (iv) the outstanding Attributable Debt in respect of Sale-Leaseback
Transactions permitted by Section 6.03(b) exceeding 15% of Consolidated Total Assets as of the most
recent fiscal quarter end for which financial statements for the Company and its Subsidiaries are
available.




          SECTION 6.02. Liens. The Company will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset









 



37



now owned or hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:




     (a) Permitted Encumbrances and Liens solely for the benefit of the Company or any
Wholly Owned Subsidiary;




     (b) any Lien on any property or asset of the Company or any Subsidiary existing on the
date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to
any other property or asset of the Company or any Subsidiary and (ii) such Lien shall
secure only those obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount thereof;




     (c) any Lien existing on any property or asset prior to the acquisition thereof by the
Company or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall
not apply to any other property or assets of the Company or any Subsidiary 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 Subsidiary, as the case may be and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount thereof; and




     (d) Liens not expressly permitted by clauses (a) through (c) above and
Securitizations; provided that the sum, without duplication, at any time of (i) the
aggregate principal amount of Indebtedness outstanding under Sections 6.01(a), (b) and (c),
(ii) the aggregate principal amount of outstanding obligations secured by Liens permitted
by this clause (d), (iii) the aggregate amount of the Financed Portions of all outstanding
Securitizations and (iv) the outstanding Attributable Debt in respect of Sale-Leaseback
Transactions permitted by Section 6.03(b) shall not exceed 15% of Consolidated Total Assets
as of the most recent fiscal quarter end for which financial statements for the Company and
its Subsidiaries are available.



          SECTION 6.03. Sale and Leaseback Transactions. The Company will not, and will not permit any
of its Subsidiaries to, enter into any Sale-Leaseback Transaction except:




     (a) Sale-Leaseback Transactions existing on the date hereof and set forth on Schedule
6.03; and




     (b) other Sale-Leaseback Transactions; provided that the sum, without duplication, at
any time of (i) the aggregate principal amount of Indebtedness outstanding under Sections
6.01(a), (b) and (c), (ii) the aggregate principal amount of outstanding obligations
secured by Liens permitted by Section 6.02(d),









 



38



(iii) the aggregate amount of the Financed Portions of all outstanding Securitizations
and (iv) the aggregate outstanding Attributable Debt in respect of Sale-Leaseback
Transactions permitted by this clause (b) does not at any time exceed 15% of Consolidated
Total Assets as of the most recent fiscal quarter end for which financial statements for
the Company and its Subsidiaries are available.



          SECTION 6.04. Fundamental Changes. (a) The Company will not merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired and whether directly or
through any merger or consolidation of, or any sale, transfer, lease or other disposition of Equity
Interests in, or the assets of, any Subsidiary), 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 Person may merge into the Company in a transaction in which the Company is the
surviving corporation, (ii) any Person (other than the Company) may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell, transfer,
lease or otherwise dispose of its assets to the Company or to another Subsidiary and (iv) any
Subsidiary may liquidate or dissolve if the Company determines in good faith that such liquidation
or dissolution is in the best interests of the Company and is not materially disadvantageous to the
Lenders.



          (b) The Company will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Company and its
Subsidiaries on the date of execution of this Agreement and businesses reasonably related,
ancillary, similar or supportive thereto.



          SECTION 6.05. Use of Proceeds. The proceeds of the Loans will be used only to provide
liquidity in connection with the Company’s commercial paper program and for other general corporate
purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board, including Regulations
U and X. Following the application of the proceeds of each Loan, not more than 25% of the value of
the assets of the Company and its Subsidiaries which are subject to any arrangement hereunder
whereby the Company’s or any Subsidiary’s right or ability to sell, pledge or otherwise dispose of
assets is in any way restricted will be Margin Stock.



          SECTION 6.06. Interest Expense Coverage Ratio. The Company will not permit the ratio of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense, in each case for any period of four
consecutive fiscal quarters ending on or after the last day of the first fiscal quarter beginning
after the Effective Date, to be less than 4.0 to 1.0.



ARTICLE VII




Events of Default




          If any of the following events (“Events of Default”) shall occur:









 



39



     (a) (i) default in the payment when due of any principal on any Loan when and as the
same shall become due and payable, whether on the date thereof or at a date fixed for
prepayment thereof or otherwise, or (ii) default for a period of five days in the payment
when due of interest on any Loan, or (iii) default for a period of 10 days in the payment
when due of any other sum required to be paid pursuant to this Agreement;




     (b) default by the Company in the observance or performance of any of the covenants
set forth in Sections 5.01 (with respect to the Company’s existence) or 5.05(e) or in
Article VI;




     (c) default by the Company in the observance or performance of any other provision
hereof not mentioned in (a) or (b) above, which is not remedied within 30 days after notice
thereof to the Company by the Administrative Agent or any Lender;




     (d) any representation or warranty made (or deemed made) herein by the Company, or in
any statement or certificate furnished by the Company pursuant hereto or in connection with
any Loan, proves untrue in any material respect as of the date of the issuance or making
(or deemed making) thereof;




     (e) default in the payment when due, after any applicable grace period, of any
Indebtedness or any amount due under any Hedging Agreement the Dollar Equivalent of the
aggregate principal amount of which exceeds $50,000,000 (the “Aggregate Amount”) issued,
assumed or guaranteed by the Company or any Subsidiary (other than Indebtedness owing by
any Subsidiary to the Company or to another Subsidiary); or default or other event under
any indenture, agreement or other instrument under which any such Indebtedness is
outstanding or under any such Hedging Agreement, and such default or event shall result in
the acceleration of the maturity or the required redemption or repurchase of Indebtedness,
or the early termination of and a required payment under such Hedging Agreement, exceeding
in the aggregate such Aggregate Amount;




     (f) any “reportable event” (as defined in ERISA) which constitutes grounds for the
termination of any Plan by the PBGC, or for the appointment by an appropriate court of a
trustee to administer or liquidate any Plan, or could reasonably be expected to result in a
Material Adverse Effect, shall have occurred and be continuing 30 days after written notice
to such effect shall have been given to the Company by the Administrative Agent; or any
Plan shall be terminated by the PBGC; or a trustee shall be appointed to administer any
Plan; or the PBGC shall institute proceedings to administer or terminate any Plan; and in
the case of any such event the aggregate amount of unfunded liabilities under any affected
Plan shall exceed (either singly or in the aggregate in the case of any such liability
arising under more than one Plan) $50,000,000; or the Company or any of its Subsidiaries or
any member of the Controlled Group of any of them shall withdraw (completely or partially)
from any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) and the aggregate
amount of the liability of the









 



40



Company and its Subsidiaries to such plan under Title IV of ERISA shall exceed (either
singly or in the aggregate in the case of any such liability arising under more than one
such plan) $50,000,000;




     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Company or
any Significant Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any Significant Subsidiary
or for a substantial part of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;




     (h) the Company or any Significant 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 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 clause (h) of this Article,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any Significant 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;




     (i) the Company or any Significant Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;




     (j) one or more judgments for the payment of money in an aggregate amount in excess of
$75,000,000 (except to the extent covered by insurance as to which the insurer has
acknowledged such coverage in writing) shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain undischarged for a period
of 45 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 assets of
the Company or any Subsidiary to enforce any such judgment;




     (k) a Change in Control shall occur; or




     (l) an event of default under the Existing Credit Agreement shall occur and be
continuing;


then, and in every such event (other than an event with respect to the Company described in clause
(g) or (h) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders








 



41


shall, by notice to the Company, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the Company accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; and in case of any event with
respect to the Company described in clause (g) or (h) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Company accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company.




ARTICLE VIII




The Agent




          In order to expedite the transactions contemplated by this Agreement, JPMCB is hereby
appointed to act as Administrative Agent on behalf of the Lenders. Each of the Lenders hereby
irrevocably 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 of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.



          Any bank 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 such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not such Administrative Agent hereunder.



          The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. 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, (b) shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the
Loan Documents, shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Company or any Subsidiary that is communicated to or
obtained by the bank serving as 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 with the consent
or at the request of the Required Lenders (or









 



42



such other number or percentage of the Lenders as shall be necessary under the circumstances
as provided in Section 9.02) or in the absence of its own bad faith, gross negligence or wilful
misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the Company or a Lender,
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 any Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt
of items expressly required to be delivered to the 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 believed by it to be genuine and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Company), 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.



          The Administrative Agent may perform any and all its duties and exercise its rights and powers
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 its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
and the provisions of Section 9.03 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 the Administrative Agent.



          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the
Company. Upon any such resignation, the Required Lenders shall have the right (in consultation
with, and with the consent of, the Company, which shall not be unreasonably withheld) to appoint a
successor. If no successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may (in consultation with, and (unless an
Event of Default has occurred and is continuing pursuant to Article VII), with the consent of the
Company, which shall not unreasonably withhold such consent and which shall, if the retiring
Administrative Agent shall so request, designate and approve a successor Administrative Agent) on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or









 



43



an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After an Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for
the benefit of such retiring 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 while it was acting
as Administrative Agent.



          Each Lender acknowledges that 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 Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender 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, any related agreement or any document furnished
hereunder or thereunder.



          The institutions named as Syndication Agent in the heading of this Agreement shall not, in
their capacities as such, have any duties or responsibilities of any kind under this Agreement.



ARTICLE IX




Miscellaneous




          SECTION 9.01. Notices. Except in the case of notices and other communications expressly
permitted to be given by telephone, 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 telecopy, as follows:




     (a) if to the Company, to it at One Kellogg Square, P.O. Box 3599, Battle Creek, MI
49016-3599, Attention of each of the Treasurer and the General Counsel (Telecopy No. (269)
565-1217);




     (b) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency
Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002, Attention of Cherry
Arnaez (Telecopy No. (713) 750-2782), with a copy to JPMorgan Chase Bank, N.A., 270 Park
Avenue, 4th Floor, New York 10017, Attention of Barbara Marks (Telecopy No. (212)
270-6337); and









 



44



     (c) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.


Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt.




          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, any
Lender in exercising any right or power hereunder or under any other Loan Document 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 Administrative Agent and the Lenders hereunder and under any other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by the Company 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. Without limiting the generality of the foregoing, the making of a
Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative
Agent or any Lender may have had notice or knowledge of such Default at the time.



          (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except pursuant to an agreement or agreements in writing entered
into by the Company and the Required Lenders or by the Company and the Administrative Agent with
the written consent of the Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable to any Lender
hereunder, without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of each Lender affected
thereby, (iv) waive or change (x) Section 2.15(b) or (c) or any other provision providing for the
pro rata nature of sharing payments among the Lenders in a manner that would alter the pro rata
sharing of payments required thereby or (y) Section 2.02 or any other provision providing for the
pro rata nature of disbursements by the Lenders, in a manner that would alter the requirement that
such disbursements be made pro rata, in each case without the written consent of each Lender
affected thereby, (v) waive or change Section 2.06(b) or (c) in a manner that would alter the pro
rata reduction of the Commitments required thereby, without the written consent of each Lender
affected thereby, or (vi) waive or change any of the provisions of this Section or the definition
of “Required Lenders” or any other provision of any Loan Document specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or make any
determination or









 



45



grant any consent hereunder, without the written consent of each Lender; provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the Administrative Agent.
Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by the Company, the Required Lenders and the Administrative Agent if (i) by
the terms of such agreement the Commitment of each Lender not consenting to the amendment provided
for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such
amendment becomes effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Loan made by it and all other amounts owing to it or
accrued for its account under this Agreement.



          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Company shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of one outside counsel for the
Administrative Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any amendments, modifications
or waivers (requested by or for the benefit of the Company) of the provisions hereof (whether or
not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent or any Lender, in connection
with the enforcement or protection of its rights in connection with the Loan Documents, including
its rights under this Section, or in connection with the Loans made, including all such reasonable
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans.



          (b) The Company shall indemnify the Administrative Agent and each Lender, and each Related
Party of any of the foregoing Persons involved directly or indirectly in the Transactions (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (other than Excluded Taxes),
including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan,
(iii) any actual or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related
in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto (and
whether brought by a third party or by the Company or any Affiliate of the Company, it being
understood that nothing herein shall relieve any Lender of liability for a breach of its agreements
contained herein); provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses









 



46

(A) do not result in actual out-of-pocket loss or expense by such Indemnitee or (B) result
from the bad faith, wilful misconduct or gross negligence of such Indemnitee or the breach by such
Indemnitee of its agreements set forth in the Loan Documents.




          (c) To the extent that the Company fails to pay any amount required to be paid by it to the
Administrative Agent under paragraph (a) or (b) of this Section each Lender severally agrees to pay
to the Administrative Agent such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided
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 in its capacity as
such.



          (d) To the extent permitted by applicable law, the Company shall not assert, and each hereby
waives, 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 or any agreement or instrument contemplated
hereby, the Transactions or any Loan or the use of the proceeds thereof.



          (e) All amounts due under this Section shall be payable promptly after written demand
therefor setting forth the amount and the nature of the expense or claim, as applicable.



          SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Company without such consent 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 and, to the extent
expressly contemplated hereby, the Related Parties of the Administrative Agent) any legal or
equitable right, remedy or claim under or by reason of this Agreement.



          (b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that (i) the Administrative Agent and, except in the case of an
assignment to a Lender or an Affiliate of a Lender, the Company must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld), (ii) except in the
case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be
less than $5,000,000 unless each of the Company and the Administrative Agent otherwise consent,
(iii) each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, (iv) the parties to









 



47



each assignment shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
and provided further that any consent of the Company otherwise required under this paragraph shall
not be required if an Event of Default under Article VII has occurred and is continuing. Subject
to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender’s 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 2.12, 2.13, 2.14 and
9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this paragraph 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 paragraph (e) of
this Section.



          (c) The Administrative Agent, acting for this purpose as an agent of the Company, shall
maintain at one of its offices in the City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be conclusive, and the Company,
the Administrative Agent and the Lenders may 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,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Company and any Lender, at any reasonable time and from time to time upon reasonable prior notice.



          (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.



          (e) Any Lender may, without the consent of the Company or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged,









 



48

(ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Company, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. 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 the Loan Documents and to approve any amendment, modification or waiver of any
provision of the Loan Documents; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Company agrees that each Participant shall be entitled to the
benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.15(c) as though it were a
Lender.




          (f) A Participant shall not be entitled to receive any greater payment under Section 2.12 or
2.14 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Company’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.14 unless the Company is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Company, to comply with Section 2.14(e) as though it were a Lender.



          (g) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.



          Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Bank”) may
grant to a special purpose funding vehicle (an “SPC”) of such Granting Bank, identified as such in
writing from time to time by the Granting Bank to the Administrative Agent and the Company, the
option to provide to the Company all or any part of any Loan that such Granting Bank would
otherwise be obligated to make to the Company pursuant to Section 2.01; provided that (i) nothing
herein shall constitute a commitment to make any Loan by any SPC and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank
shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
shall be deemed to utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan were made by the Granting Bank. Each party hereto hereby agrees that no SPC shall be liable
for any payment under this Agreement for which a Lender would otherwise be liable, for so long as,
and to the extent, the related Granting









 



49



Bank makes such payment. In furtherance of the foregoing, each party hereto hereby agrees
that, prior to the date that is one year and one day after the payment in full of all outstanding
senior indebtedness of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or similar proceedings under the laws of the United States or any State
thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.04, any
SPC may (i) with notice to, but without the prior written consent of, the Company and the
Administrative Agent and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to its Granting Bank or to any financial institutions (if consented to by
the Company and Administrative Agent) providing liquidity and/or credit facilities to or for the
account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued
by such SPC to fund such Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans (but not relating to the Company, except with the Company’s consent) to any
rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC.



          SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by
the Company herein, in the other Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.12, 2.13, 2.14 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.



          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement, the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent 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 4.01, 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 which, when taken together, bear the
signature of each of the other parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this









 



50



Agreement by telecopy or other electronic transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.



          SECTION 9.07. Severability. Any provision of any Loan Document 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 of such Loan Document; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.



          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing,
each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such Lender or Affiliate to
or for the credit or the account of the Company (other than payroll accounts and trust accounts)
against any of and all the obligations of the Company now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement. The rights of each Lender under this Section are in addition to and
shall not limit other rights and remedies (including other rights of setoff) which such Lender may
have.



          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.



          (b) The Company hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court 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, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
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 any other Loan
Document shall affect any right that any Administrative Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan Document against the
Company or its properties in the courts of any jurisdiction.



          (c) The Company hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, 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









 



51



fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.



          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party hereto or thereto to serve process in any other manner permitted by
law.



          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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, 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 PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 9.11. Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.



          SECTION 9.12. Confidentiality. (a) Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except that Information may
be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (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), (ii) to the extent requested by any regulatory authority,
(iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal
process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section, to (A) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or
(B) any actual or prospective counterparty to any swap or derivative transaction relating to the
Company and their obligations, or any advisor of any such counterparty, (vii) with the consent of
the Company or (viii) to the extent such Information (A) becomes publicly available other than as a
result of a breach of this Section or (B) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than the Company.









 



52

For the purposes of this Section, “Information” means all information received from the
Company relating to the Company or their business, other than any such information that is
available to the Administrative Agent, or any Lender on a nonconfidential basis prior to disclosure
by the Company; provided that, in the case of information received from the Company after the date
hereof, such information is identified at the time of delivery as confidential. 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 a prudent Person engaged in
the same business or following customary procedures for such business would accord to its own
confidential information.




          (b) Each Lender acknowledges that information furnished to it pursuant to this Agreement may
include material non-public information concerning the Company and the Subsidiaries or the
Company’s securities, and confirms that it has developed compliance procedures regarding the use of
material non-public information and that it will handle such material non-public information in
accordance with those procedures and applicable law, including Federal and state securities laws.



          (c) All information, including requests for waivers and amendments, furnished by the Company
or the Administrative Agent pursuant to, or in the course of administering, this Agreement will be
syndicate-level information, which may contain material non-public information about the Company
and the Subsidiaries or the Company’s securities. Accordingly, each Lender represents to the
Company and the Administrative Agent that it has identified in its Administrative Questionnaire a
credit contact who may receive information that may contain material non-public information in
accordance with its compliance procedures and applicable law, including Federal and state
securities laws, and such credit contact shall be bound by such Lender’s confidentiality
obligations hereunder.



          SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if
at any time the interest rate applicable to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such Lender.



          SECTION 9.14. USA Patriot Act. Each Lender hereby notifies the Company that pursuant to the
requirements of the USA Patriot Act, it is required to









 



53



obtain, verify and record information that identifies the Company, which information includes
the name and address of the Company and other information that will allow such Lender to identify
the Company in accordance with its requirements.



          SECTION 9.15. No Fiduciary Relationship. The Company, on behalf of itself and its
subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby or
by the other Loan Documents and any communications in connection therewith, the Company, their
subsidiaries and their Affiliates, on the one hand, and the Administrative Agent, the Lenders and
their Affiliates, on the other hand, will have a business relationship that does not create, by
implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lenders
or their Affiliates, and no such duty will be deemed to have arisen in connection with any such
transaction or communications.



[Signature Pages To Follow]










 



 


          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.



	 	 	 	 	 
	 	KELLOGG COMPANY,

 	 
	 	By:  	/s/ Gary H. Pilnick
 	 
	 	 	Name:  	Gary H. Pilnick 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Administrative

Agent and as Lender,

 	 
	 	By:  	/s/ Barbara R. Marks
 	 
	 	 	Name:  	Barbara R. Marks 	 
	 	 	Title:  	Vice President